younginvestor2013
Recycles dryer sheets
- Joined
- Feb 6, 2013
- Messages
- 226
I understand that, at its core, this question is basically a market timing question, but I'll ask it any way.
If you thought you might buy a home in the next year or two (or sooner), and the funds you needed for the downpayment and closing costs were invested in the stock market right now, would you go ahead and sell whatever $ amount you'd need to lock in gains? And let those funds sit in a savings account?
Like many others, my brokerage account has seen some very nice gains, up 22% since last November, and has almost earned more in unrealized gains than I have at my W2 job.
I'm not positive that I will in-fact buy a house, but it is a possibility.
The downsides that I see on doing this are:
1) I don't buy the house, the market improves in 2018, and I buy in at higher values
2) Obvious tax hit - although they are all long term gains
If I don't buy the house and the market goes down, I could always re-invest the funds at lower valued prices. Of course I would have paid taxes on the gains, but those taxes would likely have to be paid at some point so that would have been more of a then vs. now scenario.
Also, if the market tanks and I then decide to liquidate to buy a house, I'd be in a much less favorable position.
Thoughts? What am I missing?
Not really looking for any criticisms on how I don't know if I'd buy a house or not. I'm 28 and still figuring things out in life
If you thought you might buy a home in the next year or two (or sooner), and the funds you needed for the downpayment and closing costs were invested in the stock market right now, would you go ahead and sell whatever $ amount you'd need to lock in gains? And let those funds sit in a savings account?
Like many others, my brokerage account has seen some very nice gains, up 22% since last November, and has almost earned more in unrealized gains than I have at my W2 job.
I'm not positive that I will in-fact buy a house, but it is a possibility.
The downsides that I see on doing this are:
1) I don't buy the house, the market improves in 2018, and I buy in at higher values
2) Obvious tax hit - although they are all long term gains
If I don't buy the house and the market goes down, I could always re-invest the funds at lower valued prices. Of course I would have paid taxes on the gains, but those taxes would likely have to be paid at some point so that would have been more of a then vs. now scenario.
Also, if the market tanks and I then decide to liquidate to buy a house, I'd be in a much less favorable position.
Thoughts? What am I missing?
Not really looking for any criticisms on how I don't know if I'd buy a house or not. I'm 28 and still figuring things out in life