CA - Buffett Harvests Tax Losses While Letting Winners Run And So Should You
2024-02-22 12:59:39 ET
Summary
- Selling losing stocks and letting winners ride is a successful investment strategy.
- Selling losers in November and evaluating them after 30 days can be a disciplined approach.
- Selling losers is easy and can help offset capital gains and earned income on IRS forms.
Are you trapped by your past success? My suspicion is that many successful investors are. My own basic principle for selling stocks goes back to an adage which I first heard in the 1950s: sell your losers and let your winners ride. There are two principles behind this adage. Principle number one is that you save on taxes, an outcome which doesn't need to be explained. Principle number two involves admitting that so far your purchase decision has been wrong. That's W R O N G wrong. Don't bother with making excuses. Just admit it before a small mistake becomes a large mistake. Most investors would do well to follow these two principles with persistent discipline....
Buffett Harvests Tax Losses While Letting Winners Run And So Should You