reallocate without a big tax bill

Reallocate Your Portfolio without a Big Tax Bill – Video

Reallocate Your Portfolio without a Big Tax Bill

Are you worried about the stock market but don’t want to sell because you’d pay huge taxes? Today I discuss 5 ways to reallocate a stock heavy portfolio without triggering a serious capital gains tax bill.

A conversation with a client inspired this quick video Idea. And it’s timely. You may be heavily in stocks and are worried about a large market correction.

Here’s what you can do to “reallocate” your portfolio more conservatively with LOW tax consequences:

  1. If you have cash (i.e. money market type funds) in your portfolio right now, don’t buy any new shares with it! This is an obvious one.
  2. if you are adding to your account on a regular/systematic basis, add to cash not to stocks.
  3. If you have losers, consider dumping them.
  4. Reallocate inside a retirement account (e.g. 401k, IRA) where you can sell stocks without tax consequences.
  5. Trim slightly fund positions that have gained well above expected return – for example if you own a tech fund and it has far outperformed your other US stocks, foreign stock fund etc (chances are they will revert down to a more measured course anyway). This will generate some taxes but it could make sense considering.

I did not talk about strategies for RSUs, options, NUA and other tactics. But you can find those discussed in some articles I’ve written here:……

Thanks for dropping by!

Related Topic: The New W4 conundrum – WTH!