It is, and I won't even try and argue against that. However, short term capital gains are taxed at the same rate as my ordinary income. In the worst case, when I make money my tax situation is no worse than if I made the money working. That's good enough for me to just not spend the CPU cycles. Yeah, yeah, in some situations I'm leaving money on the table. I don't care because I'd rather spend the limited cycles I have for investing in finding the next good pick, not tax avoidance. At the very best, I can save 28% on taxes. Spending my time finding good companies, however, can do much better than that (see: TSLA, AAPL in the 2000s, et. al.). I'm also lazy, and find tax stuff boring in comparison to evaluating whether now is a good time to get into Lending Club.
Another way to look at it is with an eye toward always preserving capital. IOW, if I'm getting taxed I'm making money (and therefore not losing it). However, I could screw around with some tax avoidance scheme and end up losing money. I'd rather break even or slightly below than lose money; live to trade another day. So most of the time I set an 8% trailing stop and call it a day, let the machines worry about it.
This isn't investment advice, and even if it were there are a lot of unspoken assumptions that I haven't outlined. It's probably not even the smartest way to maximize gains. But for me, personally, it's the right combination of not overthinking it, not spending time obsessing over my portfolio, and still making positive returns. And last time I looked it up, I've had two negative years in the last sixteen. So it works for me (though at my age I need to start looking less at the TSLA's and more at those sexy, sexy bonds).
This is true, but if you are making money and getting tax, but if you are also losing money and not reducing taxes (because you are trading a lot and getting gains taxed some years but not saving on taxes in down years), you will hurt yourself.
Yes, but I want to sell off to diversify the kinds of chips I'm holding. At the moment, the tech stocks I'm holding on to as a result of work are doing quite well, but I'd like to insulate myself from risk anyways.
(Most of them are naturally short-term, but even LEAPS I thought were taxed as STCG.)
Reminds me of a stock options seminar I went to, presented by an actual Fidelity options trader. The question came up along the lines of "so something something, what would the tax implications be?" His answer was something that I remember to this day, and remind myself when I'm worried about "something something capital gains": "I'm the worst person in the world to ask about investment taxes. If I'm getting taxed, then I'm making money, and that's as much thought as I give it."
I couldn't even tell you the capital gains rates at this moment. If I need to get out of a position, I get out. And to quote the above professional options trader, if I take a tax hit then I made money. If I try to avoid the tax hit by holding on for a few more months to avoid short term capital gains, I might very well lose money in the interim. So I just don't pay any attention anymore and settle up with the government come April.