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|Subject: ||RE: S&P Buy Signal|
Off the Grid/Blowing Rock.Master/Any other professionals,
I've often followed a similiar path to Flagpole, consistent investing ($1700 per month) into 5-6 different mutual funds. I feel I'm doing well for my age, as I have $81k in mutual funds at age 25, however, am curious as to your strategies.
My thoughts were that if you were always buying and selling to time the market, then you'd have to pay capital gains taxes on each of those transactions. If you buy at 100, sell at 115 over say 2 months, wouldn't you have to pay taxes on that at your ordinary income tax rate (potentially 25-35 depending on income levles)? Then it goes back down to 110 and you buy again and sell at 120, you pay higher short term taxes again. Now say I buy at 100 and sell 10 years later at 140, i just pay long term capital gains taxes (15%) one time.
Am I correct to think that over time, you're just burning up your gains through continually paying higher taxes and more often on your gains. Jut trying to understand a bit better.
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