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Re: Time to take capital gains?
Old 01-20-2007, 09:41 AM   #21
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Re: Time to take capital gains?

Unless you made some (ahem) suboptimal trading decisions in 2000-2002 and are sitting on a pile of long term capital loss carryforwards. (moi??!)
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Re: Time to take capital gains?
Old 01-20-2007, 09:57 AM   #22
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Re: Time to take capital gains?

Quote:
Originally Posted by ESRBob
...suboptimal trading decisions...
Yet another phrase I have decided to make my own. Of course I would prefer to use it more often in regard to someone else's returns rather than mine.
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Re: Time to take capital gains?
Old 01-20-2007, 11:11 AM   #23
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Re: Time to take capital gains?

Quote:
Originally Posted by ESRBob
Unless you made some (ahem) suboptimal trading decisions in 2000-2002 and are sitting on a pile of long term capital loss carryforwards. (moi??!)
"Sorry"... already wiped those out with subsequent gains!
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Re: Time to take capital gains?
Old 01-20-2007, 11:23 AM   #24
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Re: Time to take capital gains?

So either you didn't make nearly enough dumb decisions in the trough years, or you're trading too much in the good years?

One thing about the mutual fund buy & hold, annual rebalance thing is that it reduces realizing capital gains, but I've never seen a study that could quantify that vis-a-vis an individual stock buy-and-sell approach. Anybody seen any?

In the absence of any studies, it might be interesting for Nords or any other active stock and bond traders here to calculate what percent turnover they have over the course of the year -- the total asset sales divided by the value of the portfolio 12/31/06. I'll do the same with my mutual fund annual rebalance approach (I should be doing it within a week or two) and we can see how they compare. In both cases we need to make sure we count dividends, capital gains and other distributions as part of that turnover.

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Re: Time to take capital gains?
Old 01-20-2007, 02:57 PM   #25
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Re: Time to take capital gains?

Quote:
Originally Posted by ESRBob
So either you didn't make nearly enough dumb decisions in the trough years, or you're trading too much in the good years?
I enjoyed the '90s runup in mutual funds and didn't start trading stocks until Dec 2000 with a slug of QQQQs at $61/share. Luckily I was skittish, used tight sell stops, and put a lot of money into Apple in 2001.

Quote:
Originally Posted by ESRBob
In the absence of any studies, it might be interesting for Nords or any other active stock and bond traders here to calculate what percent turnover they have over the course of the year -- the total asset sales divided by the value of the portfolio 12/31/06.
Qualitatively I'd say my turnover is a fraction of the styles I was experimenting with during 2001-2002. I started out like a hyperactive bunny but I've slowed way down.

As for the numbers, gimme a few weeks to dig through a couple other projects first.
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Re: Time to take capital gains?
Old 01-20-2007, 04:08 PM   #26
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Re: Time to take capital gains?

On first bash through my rebalancing, it looks like the following for me:

Taxable Interest and nonqual Divs, net rents and biz income 1.8% of portfolio

LTCG Distributions from funds 1.5% of portfolio

LTCG generated from selling funds during rebalancing 1.1% of portfolio
(assumes 30% of sale amount is taxable as LTCG- haven't done the actual math yet, but we do sell winners during rebalancing so these gains will be there and taxable)

Total: 4.4% of portfolio is taxable -- some at full income rates, some at preferred rates, and much/most of it sheltered.
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Re: Time to take capital gains?
Old 01-20-2007, 05:28 PM   #27
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Re: Time to take capital gains?

Quote:
Originally Posted by ESRBob
Unless you made some (ahem) suboptimal trading decisions in 2000-2002 and are sitting on a pile of long term capital loss carryforwards. (moi??!)
I used up all my LT loss carryovers, but i still have $65k in short term losses to use.

Thought the nasdaq was a decent buy at 3000 on the way down and then thought it was a real bargain at 2000. When it hit 1200 I realized my error and sold when it bounced back up to 2000.

I sure have enjoyed having all of my gains wiped out, and an extra $3000 (or whatever the hell it is) scratched from ordinary income every year.

But I'd rather have the money. Or be paying something a little higher than a couple of percentage points in taxes. Err..maybe not the latter...
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