The theme this week on the Retirement Quick Tips Podcast is: Nowhere to Hide. It’s been a rough year, with threats of a deepening recession and continued, sticky inflation dominating the minds of most investors. So this week, I’m talking about how you can navigate an economic and investing climate where it seems like there’s nowhere to hide. 

Today’s topic is sell this, not that. 

Now is the ideal time to review your investment holdings and rid yourself of the investments that are of poor quality. 

I have a client who owns a mutual fund in a taxable account. He’s owned this mutual fund for over a decade, and it has a sizable taxable gain. If he sells it, he’s going to pay the taxes on that gain, which he’s not too excited about. 

Even though the fund has made him money, it’s a terrible investment with lackluster future prospects. The fees are high, the management style of the fund is questionable and inconsistent with this client’s goals, and it consistently underperforms its peers. The only saving grace here is that at least I didn’t pick this fund for him, and it was something he bought along time ago. 

So we’ve been gradually selling some of this fund over the last couple years to spread out the taxes. 2022 is a great opportunity for us to sell the rest and move on. The fund is beat up this year, so his gains and tax consequences have been significantly reduced. 

Once we sell it, we can reinvest it in a better quality investment with better future growth prospects, lower fees, etc. 

The point here is that while it’s very unwise to sell your stock portfolio in a down market and hide everything under the mattress, you don’t want to confuse the “don’t sell” advice and apply that to everything you own in your portfolio. Markets like this expose the garbage that was previously hiding in your portfolio, so it’s a good time to sell and move to quality investments when you can start smelling the trash. 

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the Retirement Quick Tips podcast.  

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance