| | | I think those "mostly in cash" and trading here and there for "entertainment" grossly under perform just buying a US index fund over the long term due to taxes if in taxable accounts.
So, Yes I am mostly in cash. I don't sweat the sitting and waiting. Tis better than taking a serious hit and waiting.
I recall taking so many profits in 2000 where 75% of my income was the taxable capital gains on my tech stocks that I'd bought to diversify my HP company stock (another tech stock) position. I generated the cash to buy these by selling the "matching shares" as soon as I took possession (hold 2 shares for 2 yrs then get a third) and was taxed on the income at full value, I used the cash from selling the matching shares to buy other tech stocks when the markets corrected... So by 2000 I had this huge (relative to my former salary) position in tech stocks where I was at the AMT limit plus 9% CA taxes... so it if I sold, paid the taxes of over 30% on my gains (mostly between 10 and 20x) then waited for the price to drop... I'd need a 50% gain to get back to even with just holding and hoping to eventually have those shares pay a dividend.
Now almost ALL the tech stocks I had large positions in back in 2000, AMAT, LRCX, INTC & MSFT, pay a rather nice dividend, especially compared to what I paid for them between 1993 and 1998 after major declines... For example, I'm holding some LRCX in a taxable account that I paid $3.33 per share for and it pays $4.40 a year in dividends! Hard to beat that, especially when dividends are taxed at a favorable rate at the Federal level.
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