Market Volatility: Should you sell a stock just because it’s dropped in value?

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  • There’s been a lot of volatility in the markets these last few weeks. Should everyone be looking to sell their stocks now that they have dropped in value?
  • Is there any reason not to sell?
  • Are there tax advantages to selling now? How can people prepare for tax season?

Selling isn’t always the best option. For example, spoke to a couple about wanting to sell stock and realizing they are getting a good dividend from it so they should hold on to it, because if they sell now they would receive less than what they paid for it and wouldn’t be able to replace the dividend income as easily

Sometimes selling is a good option if you want to do tax harvesting. Tax harvesting is when you match up your winners and losers and sell off the losers, which allows for a tax break.

Be cautious with whatever you decide to do, especially in this volatile market, as things can be complicated depending on your circumstances. It’s always best to speak with a professional and it might be a good idea to get a second opinion to help you gain additional insight into what options you may have available, and what might be more beneficial to you in both the short and long-term. Give me a call if you have any questions. I would be happy to help you evaluate what options you may have available to you.

Mark Stratis is a Certified Financial Planner, and he has been working with individuals and small businesses in the insurance, employee benefits, financial and investment planning areas since 1979. He is co-author of Money Talks: Life Lessons to Help You Plan Now, Save Wisely, and Retire Well.