Sometimes in life we encounter situations which leaves us rethinking our strategy. This recently happened to me and I decided to change the way that I was doing some of my investing. Up until now I had all of my holdings in a individual account with my broker but I have decided to go ahead and open myself a Roth IRA account. Now even though I absolutely love this company, I decided to sell my shares of the company so that I can open a new position in my brokerage account.
Currently I only owned 10 shares of Realty Income Corporation which I bought for $46.02 per share. My selling price was $51.69, so I actually acquired some short term capital gains in the process of doing this but I think it will be more advantageous for me in the future to have my holding in this company positioned in my Roth IRA account. Since Realty Income Corp is a REIT and produces Non-Qualified Dividends it will be better for me to hold it in the Roth account because of the Tax Shelter created by the Roth IRA.
With the sell of these shares it will free up some cash in my individual account that I can put to work by investing in some other company. Although I realize this may have hurt my total returns before taxes over the long term…. with the tax advantages factored in, I believe it will actually help me produce better total returns after taxes.
Please feel free to leave me a comment and to let me know what you think of this decision.