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Financial Planning / Tax Strategies


Subject:  Re: Fiscal cliff and dividend paying stocks Date:  12/22/2012  9:28 AM
Author:  TMFPMarti Number:  117208 of 127753

It seems to me letting the tax rate on dividends increase would discourage investment in dividend paying stocks. These value stocks have been a part of my portfolio for years but now I'm seriously starting to think of selling all shares in all stocks, hang onto the cash until after tax season then reinvest elsewhere.

I smell tax-phobia, a leading cause of letting the tax tail wag the investment dog. I don't know your definition of "for years," but in the grand scheme of things dividends have received special tax treatment for but the blink of an eye.

My recommended analysis of holdings remains "Does this investment still meet the criteria I used to buy it?" If yes, keep it. If no, dump it and look elsewhere (which can include sitting on cash).

Oh, and all that stuff you're hearing about what may happen. The more certain the person is, the less (s)he knows.

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