3 Reasons Not to Sell Stocks in a Downturn
As of the date of this writing, it looks like S&P 500 stocks have finally entered a bear market, or reached levels 20% below their previous highs. While this is unnerving for even the most stoic investor -- and especially so if you're in or entering retirement -- there are many good reasons to leave your portfolio alone to the extent you can.
Let's look at three of the best reasons to avoid selling stocks during a stock market downturn.
Stocks held for longer than a year are eligible for long-term capital gains tax rates, which are significantly more favorable than their short-term counterparts. If you sell stocks after they've lost value, you'll reset their holding periods when you reenter the market, meaning you'll have to wait an additional year to again qualify for long-term treatment.
Source Fool.com
