How to Sell Loss-Making Stocks to Switch to Other Stocks
- 1). Find a copy of your brokerage statement from the months you purchased the losing stocks. Review the prices you paid for the stocks to figure your potential loss. If you have online access to your account, your broker might already have this information recorded. Go to the accounts page on the broker website and review your holdings. Check to see if your unrealized gain and loss are listed on the form.
- 2). Review the list of stocks that show an unrealized loss. Ask yourself if you would purchase the stock today at the current selling price. If the answer is yes, you might want to hang on to the stock in hopes of a recovery in the share price. If you would not purchase the stock today, it is probably best to cut your losses and use the money to find a more suitable investment. Another issue to consider in selling a losing stock is whether your loss will be short-term or long-term, which can affect your tax position.
- 3). Log on to your brokerage account and go to the trading menu. Enter the ticker symbols of the stocks you wish to sell, along with the number of shares. Review the details of your trade and click "Confirm" to send your order for processing.
- 4). Print a copy of the confirmation page from the sale and keep it with your tax documents. You will need this documentation to verify your capital loss at tax time.
- 5). Choose the stocks or other investments you wish to purchase. If you plan to invest through the same broker, go to the trading menu and choose the stocks or mutual funds you want to buy. If the investments are with other firms, transfer the cash from your stock sale to your bank (if your broker account is not tax-deferred), then use the money to make your investment.
- 6). Keep a copy of your purchase confirmation with your tax records. You will need this documentation when you sell the investment down the road, hopefully at a profit.
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