By Bruce Mushial
Summer is here and you are going on vacation.
Your neighbors will watch your house. Your brother is taking
you to the airport. The dog is going to the kennel. But what
are you going to do with your stocks while you're on vacation?
If you're a day trader you probably sell everything at the
close of each trading day so there's no problem. But, if you're
like most investors, there is at least a portion of your portfolio
you are holding long-term. What precautions can you take
with your stocks before you go on vacation? You could
sell everything, but the tax consequences could be horrendous.
You could do nothing and take your chances, but the losses
could be significant. Here are a few ways to help your stocks
perform well while you're away. You can place trailing stops.
By placing stop sell orders 5 percent below current stock
prices the stocks will be sold if the market declines 5 percent
or more while you are away. What percentage you choose is
up to the individual investor. Keep the tax consequences
in mind or you may prematurely sell a stock held for 11 months
when it would have been better to hold it 12 months and pay
the long term capital gains tax rather than the higher tax
on a short term gain. Another option is to ask a friend
or relative to watch your stocks while you're away. When we
go away we frequently ask neighbors or a relative to pick-up
our mail and feed our pet. Why not have them keep an eye on
our stocks. You can return the favor when they go on vacation.
Leave a cell phone number or pager number with them so they
can let you know if things get crazy. You don't need to tell
them how much of each stock you own or the value of each holding,
just the names and symbols of your major stocks. Another way
to keep track of your stocks is to update your cell phone
or pager. Many of the newest cell phones and alphanumeric
pagers offer comprehensive quote and market information. If
you don't have one of these newer units, maybe it is time
to replace your current phone or pager before your next trip.
Another method is to simply stay in touch using your brokerage
firm's 800 numbers. Most full-service and even discount brokers
have 800 number services from every state. You can call customer
service or use an automated touch-tone service to check stock
quotes, account balances, and even place trades. Make sure
the 800 numbers you take with you are good in the places you
will be traveling. Some 800 numbers are only good inside or
outside your home state and some can only be dialed from certain
states. Call customer service and get the right numbers. If
you are traveling to Hawaii, Alaska, or Canada make sure you
have the numbers that work in these areas. These phone numbers
are likely going to be different from the regular 800 numbers
used in the contiguous 48 states. You could always just pick
up a Wall Street Journal at your hotel, but this information
is going to be at least a day old. Happy vacation.