Ask Yourself These 3 Questions Before Selling a Stock at a Profit
Your goal as an investor may be to buy quality stocks and eventually see them gain value. But what if you're currently sitting on a stock that's gained a lot? You may be tempted to take your money and run. But before you do, ask yourself these important questions.
When you sell a stock at a higher price than what you paid for it, you trigger taxes on your capital gains. But the amount of those taxes will vary depending on how long you held your investment.
Stocks held for at least a year and a day get bumped into the long-term capital gains category, which means a smaller tax burden for you to bear. But stocks held for a year or less are subject to short-term capital gains, the rate of which is higher and mimics ordinary income tax rates. That could result in more of a financial hit.
Source Fool.com
