With market high, should I sell some stock and pay off car loan?

Curious Investor wrote:

Investment Advisor wrote:

As a poster above said, do some math. Calculate and compare your remaining interest payments versus your capital gains tax obligation. If that comparison says to leave your stocks alone, do so but hedge your situation by setting up a trailing stop to sell your stock if it falls by X%.

And what would that be? Percentage wise?

Cute theoretical plan, that is so cute it would most likely backfire.

Ghost of Igloi wrote:

Investment Advisor wrote:

As a poster above said, do some math. Calculate and compare your remaining interest payments versus your capital gains tax obligation. If that comparison says to leave your stocks alone, do so but hedge your situation by setting up a trailing stop to sell your stock if it falls by X%.

Wrong. For one the so called "Investment Advisor" does not know how a tailing stop works. The stop could blow thru the stop price and sell at a price far below what was expected. It is best to evaluate the position against historic measures which in most cases would tell you to take your gain.

What is a "tailing stop"? I've never heard of it.

Trailing Stop, I miss typed, the intention is to move the stop as the price increases. A stop loss order will execute at any price under the stop. So, if the stop is set at $60, and the stock opens up at $50, you are out $50 or under, depending on the position in the order book.

Lol. I know what a trailing stop is. "Miss typed" is funny too.

The chances of blowing through a stop are next to nothing. You crack me up.

Jiminy wrote:

Lol. I know what a trailing stop is. "Miss typed" is funny too.

The chances of blowing through a stop are next to nothing. You crack me up.

No you do not have enough experience to make that judgement. You will learn the hard way. LOL yourself sap.

Lol @ you projecting your inadequacies onto me. It's obvy I know more about this than u.

Ghost of Igloi wrote:

Curious Investor wrote:

And what would that be? Percentage wise?

Cute theoretical plan, that is so cute it would most likely backfire.

Huh? I wasn't trying to be cute. Not like I was trying to pick a date.

No you are but another person who thinks he is a market genius. A Bull Market does it you know. We you will learn rather quickly you are a fool, and you will have less money for it.

Ghost of Igloi wrote:

No you are but another person who thinks he is a market genius. A Bull Market does it you know. We you will learn rather quickly you are a fool, and you will have less money for it.

Idiot...incoherent and idiotic. Congrats.

Curious Investor wrote:

Investment Advisor wrote:

As a poster above said, do some math. Calculate and compare your remaining interest payments versus your capital gains tax obligation. If that comparison says to leave your stocks alone, do so but hedge your situation by setting up a trailing stop to sell your stock if it falls by X%.

And what would that be? Percentage wise?

That's another (ongoing) calculation. You'd need to decide how far the stock would have to fall to make holding it a bad investment versus paying off the loan. It's an ongoing calculation for a percentage-based trailing stop since the value of the stock constantly changes.

A similar option is to use a dollar-based stop order. For example, if a stock value of $50 is the point where there is no advantage to either position (keeping the stock vs. paying off the loan), then you could set a stop limit order at something like $55 to ensure a profit and still being able to pay off the loan. Of course, you'd also want to calculate any fees and taxes and include them in your limit price determination.

Good luck.

Ghost of Igloi wrote:

No you are but another person who thinks he is a market genius. A Bull Market does it you know. We you will learn rather quickly you are a fool, and you will have less money for it.

And then lies about the losses.

OP if you want to lower your debt, work on the mortgage. If the car is actually 0.9 then definitely pay down the mortgage some.

I'm not opposed to using sale proceeds to do this. Just work out the tax effects and pay down accordingly. Less expensive debt is the goal, then less debt after that.

If you want to de-risk, move some money into short term bond funds, or something like it.

Price stops are not a bad idea. But, then you get into things you can't control. That is okay for some, too complicated for others.

Do whatever you want. $9500 either way is not going to make a difference unless you bet on some stock that would blow up.

A world on fire wrote:

Ghost, yes I agree that many stocks are overvalued... but, with global markets in turmoil, that money is leaving and seeking shelter elsewhere. Can we see an actual continuation of market climb? Also, what about bond issues? Is that not another issue that capital will flee, and ultimately end up in stocks?

I'm curious to hear an answer to this. Ghost of Igloi, investment advisor?

London Bridge wrote:

A world on fire wrote:

Ghost, yes I agree that many stocks are overvalued... but, with global markets in turmoil, that money is leaving and seeking shelter elsewhere. Can we see an actual continuation of market climb? Also, what about bond issues? Is that not another issue that capital will flee, and ultimately end up in stocks?

I'm curious to hear an answer to this. Ghost of Igloi, investment advisor?

My view, stocks and bonds are both overvalued. The difference, I can hold a 10 Year Treasury and get a 2.2% return, which I believe will be better than stocks. I am not advocating that, just making a comparison. In regards to whether the market continues to climb, I don't have an answer for you. I will say that the more overvalued the stock market becomes, just increases the severity of mean reversion. One interesting thing to note, the Fed has been raising interest rates with the belief the economy is improving, yet the 10 Year Treasury has dropped from 2.6% to 2.2%, and yet the market hits new highs. Something is amiss.

Igy

London Bridge wrote:

A world on fire wrote:

Ghost, yes I agree that many stocks are overvalued... but, with global markets in turmoil, that money is leaving and seeking shelter elsewhere. Can we see an actual continuation of market climb? Also, what about bond issues? Is that not another issue that capital will flee, and ultimately end up in stocks?

I'm curious to hear an answer to this. Ghost of Igloi, investment advisor?

I agree with this assessment. Right now, stocks are the only game in town. Bonds are tanking and the stock markets continue to set new records. The dollar's value is falling leaving foreign investors clamoring for US stocks. Tech companies are up over 20% for the year so far. Earnings are up suggesting valuations will come down.

No one knows how long this will last, but it has been 9 years so far. Chicken Little has been screaming "the sky is falling" for years, but he's consistently been wrong. Of course, by this time tomorrow he could be right. No one knows.

Investment Advisor wrote:

London Bridge wrote:

I'm curious to hear an answer to this. Ghost of Igloi, investment advisor?

I agree with this assessment. Right now, stocks are the only game in town. Bonds are tanking and the stock markets continue to set new records. The dollar's value is falling leaving foreign investors clamoring for US stocks. Tech companies are up over 20% for the year so far. Earnings are up suggesting valuations will come down.

No one knows how long this will last, but it has been 9 years so far. Chicken Little has been screaming "the sky is falling" for years, but he's consistently been wrong. Of course, by this time tomorrow he could be right. No one knows.

The so-called "Investment Advisor" is an idiot. Bonds are not tanking with the TLT up 5.5% on the year. You would be bet to ignore this fool.

Actually bonds are indeed tanking.

http://www.businessinsider.com/bond-market-update-may-2017-jobs-report-2017-6

Bond yields are the lowest they've been in months. Someone's an idiot, but it's not investment advisor.

Gimpy wrote:

Actually bonds are indeed tanking.

And? What happens to bond prices when yields go down?