My car is starting to show “signs of aging” and I’m actively on the hunt for some new wheels. I’ll certainly be getting something used so I don’t get zapped with massive depreciation in the first few years. The link indicates that most cars depreciate 15-20% per year, I’ve heard even higher rates from other sources. I’m shooting for something around $10K, 80ish thousand miles. At 20% depreciation I’d be looking at the value decreasing $2000 a year or $165/month. Never a great feeling, but I’d rather lose 2K per year to depreciation on a decent used car than 20% on a new car costing ~30K (which would equate to roughly $500/month in decpreciation).
Unfortunately, I’m in the middle of a real estate transaction right now so taking out a car loan isn’t the best idea. I don’t want to throw off my debt to income ratio too much. The best bet is to pay with cash I think. My cash is mostly tied up in a cash account with Scottrade, its almost fully invested in individual stocks (with a little of it in a index fund). Now, to liquidate part of my holdings, I have to decide what stocks to sell.
Omniture (OMTR), Taser (TASR) and Western Digital (WDC) have all treated me well and I think they are still great companies to hold on to. By selling those, I’d be on the hook for capital gains at the end of the year and I’d rather avoid that since I believe they are still good investments.
Titanium Metals (TIE) and Heely’s (HLYS) are the two losers that I have in my portfolio. I think I’m going to take the “cut the losers, let the winners run” approach and unload TIE and HLYS. I’ll show a loss on my taxes for those transactions, will actually get out of those two companies that I, honestly, know too little about to have any great confidence in over the coming years, and it’ll allow me to keep my winners and avoid paying taxes on the gains (for now anyway).
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