Supposing you require $20,000 for a heart operation?

You own 1,000 shares of Google Inc., which you bought at IPO for $20/share; now worth $40/share. Should you sell HALF of those shares, considering that you are reaping the profit of your investment? Or should you sell ALL $20,000 of the stock you own in Ford Motor co, even though those shares may possibly be worth more in the future?

Which would you sell?

Answer:
Accepting the prices in the example, you need to sell more Google because, after capital gains taxes are taken out, you won't have $20,000 any more. You don't mention your cost basis for Ford, but if it's a loss, you get a (small) tax advantage and thus do not have to sell $20,000 of stock to get that much benefit.

Generally, if you own company A and company B and the tax differences are trivial, then it doesn't matter which you sell because either could go up in the future. The stock doesn't know you own it, or what price you paid for it.

The answers post by the user, for information only, FunQA.com does not guarantee the right.



More Questions and Answers:
  • Which of the following is a determinant of supply in the market for car rentals?
  • Which will be more important in the future, Gas or food? Which will ultimately be more expensive?
  • What fraction of the world’s population enjoys sanitation standards better than ancient Rome’s?
  • Is the demand for following elastic or inelastic and why: textbooks, milk, gas, pop,?
  • Economists and politicians: Should we impose a tariff on corporations who use 'imported' labor?
  • Unemployment question?
  • What is the most important investment our American society can make to ensure future prosperity?
  • What is the relationship between population size and economic health?
  • Incentives? Nonmonetary and Monetary?