What's up Grandma's guys here. So yes to Tony you saw is true and I want to be completely transparent because it's that time of the year to start cashing out of the stock market again now I know what you're thinking. but Grant you said that you would always Buy and Hold selling stocks when they're down only locks in your losses. But to that I Gotta say I followed this exact same strategy a year ago and I wound up selling off a chunk of my portfolio at the peak of the market right before some of the stocks fell 40 to 70 percent.

In fact, you could literally go back a year ago and see exactly which stocks that I was about to sell and why. So this time I'd like to give everyone else another heads up in terms of why I'm doing this, which stocks I'm about to sell, and how you could use the Zone strategy for your own portfolio. Because contrary to what you might think, there is a method to the madness that could wind up saving a lot of money and you only have another few weeks left to do this. Although before we start, if you find this video helpful, it would mean a lot to me if you crashed that like button or subscribed.

If you haven't done that already, it's totally free. It takes you just a split second. and as a thank you, here's a picture of a cat dressed up as sushi. so thank you guys so much! and also a big thank you to Wealthfront for sponsoring this video, but more on that later.

All right now before we go to which stocks they'll be selling and why it's important that I explain a bit of the back story because once you understand this, a lot is going to begin to make sense. See some of you know. throughout the last few years, I've been investing heavily into the stock market as a way to diversify away from Real Estate Prior to then, I had pretty much all of my money tied up in several rental properties throughout. Los Angeles and it got to a point where I realized that adding all of my eggs in one basket in one state in one County was not a smart idea if I wanted to take a balanced approach to Building Wealth long term.

So in early 2020, I began diverting a lot of my attention to stocks. So that way I'd have something else to fall back on that didn't require me to fix leaky toilets at 2AM Okay, for the record, I've never actually done that and I don't know why everyone thinks landlords do this or have to fix leaky toilets in the middle of the night. but I digress. Over these last few years, I built up a sizable portfolio that encompasses 20 individual stocks and 80 index funds spread throughout the S P 500, the total stock market, and the international market.

But something happened. A few of those individual stocks did incredibly well since 2020 and are up 100 to 300 percent While others got completely destroyed. So over the last two years I've been selling off chunks of my portfolio at the end of every single year and then redeploying that money elsewhere. And this year is absolutely no exception because it's been bad to start.

Before we talk about the losses, let's talk about which my stocks did incredibly well and the first was en Phase energy up 116. This is a company that I began buying in June of 2020 back when it was forty five dollars a share and since then I've continued adding on any time I felt it was undervalued I Think it's pretty safe to say that I never expected them to do this well with the share price currently above 300, but because of that, this single stock became too large of an individual position and so I've been selling off chunks of of it over the last 30 days. The second, we have foured up 106 percent. This was a stock that I began buying at the very beginning of the pandemic between four to seven dollars a share and I'm not gonna lie I just really, really like the company, you know I never really talked about this before, but back in high school 2005 2006 I took all the money I had saved up at the time and I had my dad open up a stock account for me with Scottrade back when that was a thing I bought all these books on how to read Candlestick charts I started browsing all the penny stock forums and really, through dumb luck I doubled my money in a few months and I thought I was a genius but I was actually an idiot and through a series of bad trades, I wound up losing almost everything and I walked away entirely from the site.

but in 2009 when everything had crashed, I logged back onto the account to see that I had a few hundred dollars left and so I put it all in Ford stock when it was around two dollars a share by literally doing just that. within a few years, I was able to recoup all of my losses and actually make a profit from the entire experience. which I'm incredibly lucky to say that So when I saw a similar crash happen in 2020, I took the same approach and I allocated a small part of my portfolio to forward and it did better than I ever expected. The third we have American Express up 68 This is a company that I began buying back in May of 2020 back when they were 86 dollars a share because I thought to myself, they have a great product I use them all the time, Virtual payments are not going away and they have so many different avenues that they could pivot if people don't want to spend 550 for one of their Platinum cards.

Since then, they've continued to do well and I still enjoy using their products on an almost daily basis. Four, we have: Simon Property Group up 64 This is another company that I bought back in 2020 when they were 50 to 70 dollars a share because first of all, commercial real estate's not going anywhere. and second, after their drop, they were paying a 15 dividend which was unheard of Far East So I bought it even though the stock is down 30 from the peak as mortgage rates increased, I still hold them as a hedge against all the other real estate that I own and fifth house. How we not mentioned this one has, he won percent.

Now here's the thing. Up until the beginning of the year, Tesla was my largest holding by far. I started buying the stock in early 2019 when I bought my Tesla Model 3 and I continued adding on to that position which soon became my best investment ever. At the peak, I was up almost 2 000 percent for my initial buy-in but in March of this year, I sold off my first chunk to buy an original 2010 Tesla Roadster and then again in April I sold off the majority of it because I was skeptical about the performance going into our recession as of now, I currently hold 450 shares although this is a small sliver of what it used to be.

and I guess on the bright side, I could still get exposure to them through the S P 500 and there were plenty of other stocks here that could be worth mentioning. but I know you guys don't want to hear that you want to hear about the losses. So uh, here's what you came for coming in at number five: Ally Financial down 50 It's no surprise ever since I started my Channel about six years ago I have been a huge proponent for their savings account I Think their free services are fantastic and they're one of the largest providers of Automotive loans in the United States but they're also one of the largest Automotive lenders in the United States When the car industry is in shambles, their stock has taken quite the hit now. Thankfully, this stock only encompassed one-fifth of one percent of my entire stock portfolio, so it's not a huge deal to be down 50 percent, but still, it stings, and in hindsight, it was probably never worth fifty dollars a share to begin with.

After that, though, we got number four Fisker down 53 This was a company that was originally founded in 2007 and they came out with the Fisker Karma that was meant to be a direct competitor against Tesla. However, unfortunately, the car was plagued with issues and would sometimes just burst into flames. so the company was eventually shut down and then in 2012, they were repurchased and rebranded as Fisker Automotive. And then they began selling cars again for me.

I Saw this one as a highly speculative investment that could either do really well or crash completely. and you know where this one is going now. I Think it's important to mention for context that I invested less than half a percent of my entire portfolio here, so it's not like I went to full YOLO But losing money is never fun and this is probably one of the ones I'll have to cut my losses on for reasons I'll discuss shortly. Number three, though, we also got Facebook also known as Meta down 56.

this one saw a complete implosion throughout the year and I had no idea just how bad things would get until they just kept getting worse. But Mark Zuckerberg somehow managed to ruin a good thing and now I'm down 50 000 of my investment again. my individual stocks are a relatively small part of my portfolio compared to everything else, but this one was frustrating. Number two: we have rocket companies also down 56 percent.

Now, for those unaware, this company does everything from home loans, auto loans Insurance solar they bought for sale by Owner.com and they also bought True Bill, which is now rebranded as Rocket Money. For a while, their business did incredibly well, but as interest rates increased through, business declined and now they're trading under ten dollars a share. In hindsight, the writing was probably on the wall when when the FED started their quantitative tightening. but lesson learned: I should have taken profits way sooner.

And finally, number one, my worst performing stock of all time goes to Snapchat down 82 percent. Listen: I have no excuses here I gambled and I was an idiot I invested twenty thousand dollars into Snapchat once they began falling from their Peak and I Thought to myself, this is just an overreaction to a bad economic environment. Online ads are not going to go anywhere and this is meant to be a long-term hold. but uh, I was wrong.

The company just had misstep after misstep and now here we are again back under ten dollars a share. Like I said, this was meant to be a Gamble and I paid the price. but at least we could turn lemons into lemonade because I've got a snap discover show for anyone who wants to follow me there and maybe Snapchat will eventually turn around anyway. Now, with the market having rebounded slightly from the recent bottom, it's making a lot more sense again to sell off a portion of my portfolio.

and for all of you watching, there is a very, very good reason why. Although before we go into that is, most of you are probably aware, a lot of this recent downturn is fueled by the Federal Reserve rapidly increasing their interest rates. and while this could absolutely hamper growth, there is one benefit that's positively worth discussing. And that's all thanks to the sponsor of this portion of the video.

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In addition to all of that, they also offer you free financial planning tools which could help you calculate whether or not you're saving enough for your future goals like buying a house. So if you're interested, the link is down below in the description to get started today And now with that said, let's get back to the video. Alright, so in terms of why now could be a good time to sell, it all comes down to a term called Tax Loss Harvesting. Now, even though I've talked about this before, it's worth repeating because for those who aren't familiar with how this works, it could end up saving a lot of money.

And it all begins here. Paxos Harvesting is a strategy that allows you to sell stocks that have lost money to offset the tax you would owe on the stocks that have made money. So here's a really simple example. Let's just say that I invested ten thousand dollars into Ford stock that's now worth fifteen thousand dollars and I invested ten thousand dollars into Facebook stock that's now worth five thousand dollars.

Ordinarily, if I were to sell that Ford stock for a profit, I'd have to pay taxes on the 5000 dollars worth of gains that could be anywhere from 10 to 50 percent depending on the tax bracket. But according to the IRS you could offset those taxes entirely by selling another stock for a loss. And if you do this correctly, you could wipe out all of the taxes you otherwise would have had to pay. This means that any year where stocks are down I would be in a really strong positions to sell off the losing stocks at a loss to offset the taxes, I would have vowed on the stocks that have made money.

In this case, there's very little downside, because at the very least, I could increase my cost basis and at the very most, I made a tax-free profit. This is also an incredibly common tax strategy that a lot of investors utilize at the end of every year. And if you have gains or losses that you don't mind trimming, then now could be a really good opportunity to do exactly that. Not to mention, if you have more losses than you do profits, then congratulations, You're able to deduct that off your ordinary income up to three thousand dollars a year, with the rest being deducted from future years.

Of course, if all this sounds incredible, well it can be. But there are rules that you have to follow and things that you must avoid if you want to do this correctly. Rule number one, you do not talk about Fight Club First rule of Fight Club Okay, no, just kidding. The most well-known rule is What's called the wash sale.

This is what happens when you sell a stock for a loss, use that loss to offset a tax, and then you go and immediately buy back in that exact same stock that you sold within a 30-day window. The IRS does not allow that because otherwise everyone would just continually sell off their losing stocks as soon as they could, and then continually claim the exact same credit as often as possible. So that is a big No-No However, there's nothing that says you can't immediately go and buy a different stock right afterwards, even if they're kind of similar. It's also completely okay to buy back the stock you sold for a profit immediately to increase your tax basis.

This is allowed, and it's only the losses that have to comply with the 30-day window. Now, the second rule is that losses must first offset the same type of profit. See, anytime you invest in stocks, you're either taxed as long-term capital gains if you've held the investment for more than a year, or short-term capital gains if you held it for under a year. Because of that, Any short-term losses will first be applied to any short-term profits.

and in any long-term losses will first be applied to long-term profits. of course. Remember, despite what you might see on Wall Street bets, it's never the goal to lose money, and it never makes Financial sense to be at a loss on stocks. but at least tax laws.

harvesting makes the best of a bad situation. And now that we're closing in on the end of the year, now is the time to take advantage of these opportunities. So that way you don't have to pay more tax than you have to. The other aspect that's worth considering is that if you're holding on to individual stocks, you should ask yourself if you add the cash option to take the value of your investment right now.

would you be putting that money back into those stocks? If the answer is no and you're only holding on to them because you want them to go up in price, then those might be good opportunities for taxes harvesting assuming you have profits to offset. If not, and you have no losses whatsoever, then you've defied the odds or invested in Berkshire Hathaway So you could completely ignore the rest of this video. But for everybody else, I at least hope that you take this into consideration and look into it a little bit further to see if it might be right for you. again.

for myself, this still reflects a relatively small part of my portfolio and the vast majority of my money just gets funneled into index funds. But I'm still holding on to a small basket of stocks to see if I could outperform a stock picking monkey. And so far, the monkey is winning. So with that, City Guys thank you so much for watching and also a big thank you to Wealthfront for sponsoring an earlier portion of the video.

As always, also feel free to add me on Instagram And don't forget that you can get a free stock when you sign up at Public.com Graham Down Below in the description with the code gram that could be worth anywhere from three dollars all the way up to a thousand dollars and you make a deposit. More information is down below. Enjoy! Thank you so much And until next time.