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time horizon

By Terry Savage on August 14, 2019 | Investments

We are in our late 80’s with a +- 950K in the market, and agree the current “bull” market is near an end, where do we move our holdings, that are not replaceable ?

Terry Says

I’m glad you have been so successful in investing — but you still didn’t tell me your time horizon!  Yes, you have lived to a nice old age, and unless you are about to become very extravagant, you are unlikely to spend it all in your lifetime.

But were you planning to leave it to your children or a worthy cause?  They might have a longer investment horizon.  And that’s where taxes come into play.

If the money is held OUTSIDE a retirement account, your heirs won’t pay any taxes (assuming your total estate is under roughly $22 million).  But if you sell while you are alive, you’ll pay capital gains taxes on long term gains — at a rate likely to be 20 percent.  That might impact your decision to sell.

But if you’re going to have a heart attack in the next bear market because you lose money — and everyone will when the next bear comes — then consider the alternatives now.  You won’t earn much on money in the bank or Treasury bills– but you won’t lose anything!  Here’s a link to a recent column on How to Buy Treasury Bills.

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