【Account floating profit is a dream, only delivery profit counts】
Recently, there has been increasing discussion about overseas investment returns. A common misconception is that many people think it is calculated based on the floating profit of the total account assets at the end of the year. In fact, it is not; the core is to look at 'delivery profit and loss', which is the actual profit you receive after selling.
This can be understood as follows: as long as the assets are still in the account, no matter how much you have made on paper, it is still just 'paper wealth' and does not generate current tax liability. Only when you press the 'sell' button and convert the assets into cash does this portion of profit get officially recorded.
This leads to an important annual planning idea. If you achieve a profit through selling during the year but then use this cash to buy new stocks or assets before the end of the year (before December 31), from the perspective of annual settlement, this cash becomes 'goods' again. In this way, the realized profit for the year can be 'offset' by the newly purchased assets, thereby reasonably deferring tax liability to the future.
Therefore, for investors, when reviewing at the end of the year, one should not only look at the total asset amount but should also carefully account for the entire year's 'sell' records. This directly relates to your annual tax arrangements.
At the end of the year, will you adjust your positions for tax planning? How do you balance this operation with a long-term holding strategy?
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This does not constitute investment advice.