Stock Markets Exposed

How much stock should I sell at a loss?

I have invested in a stock that has lost value over the past 3 years. If I sell I will lose about $10,000.00. Besides my wages I have a money market fund that has earned $2,800 during 2006. Wages 82,000.00 Should I sell all or part of the stock for tax savings? Thanks

Public Comments

1. you need to research how much of a tax loss you can take - my recommendation is that you do sell all and invest in something better (utilities, reits, or blue chips) I think the limit is$3000 per year however you can carry forward the remainder and take losses the next several years.
2. stocks are a gamble in themselves and there is no way of speculating a gaurenteed answer. The best way of earning a reasonable return on any investment would be diversifcation. Mutual funds today offer a steady return with a diversified portfolio. Maybe you can look at some of the investment firms that offer a good range of mutual funds along with investment advice
3. If you sell now, you can use the 10k loss to offset other capital gains. For example if you have 6k in capital gains (appreciation in the value of the holding), you can completely offset those gains with 6k of capital losses. Then, 3k of capital losses can be used to offset your income (such as the money market), and the remaining 1k can be carried over to the following year. As far as whether or not to sell the stock, typically people sell if over 10% of the value of the holding has been lost.