cgh1999 said:
"Trading Account" question. Most of the chatter in this thread is about trading and short/medium term plays. It's been a fantastic source of new names, new strategies, etc. my question- what is the breakdown of your portfolio in regards to Taxable/Non Taxable; Trading / long term investment
Taxable (60%)
Non Taxable (40%)
Trading - preference has always been 10% of taxable as I had historically considered this a little like "gambling". Thanks to this thread, it's grown to 15%. (Balance of portfolio has grown, but not as quickly)
I think I understand your question, but am not positive.
Historically, I have had about 50% of invested assets in non-taxable retirement funds, 45% in after-tax, and 5% after-tax that I allocate for trading (hedging/speculation). I have invested the retirement portfolio fairly conservatively, the after-tax moderately aggressive, and anything goes in the fun account.
This year has made me revisit this a bit, due to the over-performance of the speculative portion (up over 100% this year in the small account). The problem is that I have a relative boatload of short-term gains that will have a decent-sized tax bill.
I am now trying to migrate most of my speculative or
hedging plays when I have an associated long position into the retirement portfolio. I am talking things like risky biotechs, penny stocks, recent IPOs, covered calls on appreciated positions, etc. This way, I will avoid the tax impact of shorter-term swing trades. Of course, my favorite speculative trade - buying a simple naked call - will have to continue to be in the fun account. I'll have to watch my overall risk portfolio to make sure it's not out of whack, but I think this may produce better results.
