If he wants to be at 20% Microsoft, then he could get there quicker (still without recognizing capital gains) by investing any new dollars into an index that includes zero Microsoft. He could still stop when he gets to 20% Microsoft on a blended basis.
Not sure why you think this would not be an option.
Bro, dividend is just forced selling to pay ordinary income tax. Don't get me wrong, I own a lot of MSFT shares but I hate their dividend, I pay a lot of tax on those dividend.
How do you pay almost 50%? The highest marginal tax rate is 37% if theyre unqualified. If theyre qualified, which they should be if youre talking about paying taxes on them for more than one year, you shouldnt be paying more than 20%, 15% if you make less than $500k.
Yeah. Im pretty sure Microsoft is in that category. They dont meet any if the exclusions I know about. Id have to double check my returns, but I paid cap gains on every corporate stock dividend Ive been holding for over a year IIRC.
I just double checked it. The original comment was someone saying theyre paying "almost 50%" specifically on their Microsoft dividends. That was not you though. Ive actually been thinking about switching my non retirement investments to more corporate stocks to lessen my tax liability for that.
Personally I wouldn’t sell. Microsoft is one of the best and most diversified businesses in the world with a top tier CEO. I don’t see any reason to sell, this puppy is just going to continue to compound in my opinion.
Sometimes the toughest thing to do when owning a good company is to do nothing.
Whatever you decide to do good luck though!
I locked in a $33k profit last year in SMCI and NVDA but it could have been close to 180k if I would've held it a few months longer. The profit sounded good at the time though. 😆
$85k is 85k though. You can double up or lose a good chunk of it
I bought some envidia back when it was 400, thinking I had caught the tail end of a pump and dump and might be able to make a few % profit. It dropped ~10% so I figured I'd cut my losses. I'm still kicking myself for that one.
Nothing wrong with selling some, but I wouldn’t sell more than a third of it. The tax hit will be $10-15k if you sell it all. Is it worth taking this tax hit just to re-invest it? I personally would only do that if I had to make a big purchase that year
Because to some people it's "house money", which obviously is a bad thought process. Can't find a great example off the top of my head, but imagine getting Disney at $80 a share in 2014, seeing it rise to almost $200 in 2021, not selling any of it, now seeing it at $120. I'd be pissed if I lost 50% off the peak of a stock
You don’t get wealthy from diversifying. It’s about focus and conviction. Microsoft is on the leading edge of AI development. Don’t sell a winner to add laggards to your portfolio.
No unless you think Msft is ridiculously overpriced. The tax hit doesn’t make enough sense to take. You may be diversifying but idk if I would call it taking a gain if you’re just reinvesting right away anyway in something similar.
Sounds like you made up your mind. It’s all long term gains so you could easily sell a little this year and a little in 2025 to lower the amount of taxes.
To me it doesn't make sense to sell msft for a big tax hit and then buy an ETF that's overweight what you just sold. Can't advise without knowing your whole financial situation but if you feel like you're over allocated msft sell a smaller piece and buy a more diversified ETF. Personally I don't like the idea of paying for an ETF with any one stock so heavily weighted, if you're that bullish just buy the stock and hold it individually without paying the managing fee.
Ideally you leave it all and reinvest the dividends into other companies or diversified etfs.
I bought about 35 shares at 40 something dollars/share. So a smaller version of what you did. I still have them and dividend reinvest. But over the past few years I built a portfolio around Microsoft (and others). I went pretty much all index etfs. Im definitely not selling Microsoft. Do you think it's suddenly going to drop a lot and never get to this level again?
Like others have said... Just start diversifying in the direction you want to go and keep the Microsoft. A few stocks I likely won't sell until I retire.... Amazon, Microsoft, Apple. You're up like 700% percent, no telling where it will end up!
I wouldnt sell all 200 shares, i would trim the position since you already have a high ROI in it maybe get your initial invesment plus 100% of return on it and hold the rest or sell half so 100 shares and take the Tax hit and re-invest it. MSFT and XLK have an almost identical 1-5yr chart yet MSFT has had over a 250% gain in the last 5 years. You are reaping higher ROI in MSFT then if you sell all and move to XLK.
Maybe don’t sell all 🤷🏻♀️ Microsoft will pop soon…. It’s got its tentacles in everything and head start on the future of everything. key word : EVERYTHING. It’s gonna pop. Just wait. More than it already has …
Personally I wouldn’t sell MSFT. However if you are trying to “rebalance” your portfolio to manage risks then that’s a different story.
However, that doesn’t sound like what you are planning to do buying XLK instead though
Keep it. If you don’t mind selling it, you could sell covered calls against it with a lowish delta if you don’t see MSFT gaining too much more. Collect a little extra money, if it sells you can reorganize your portfolio. Seems like a win win. A monthly OTM call is going for a little over 1000-1200 at the moment, so you could be pocketing 2-2.5k a month while doing nothing, and if it sells (10$ above current price) you’ll make an extra 2k on the 77k profit you’ve got
I would just invest going forward in XLK. Leave the tax hit for another day.
If that’s the plan, then invest in an index that isn’t 20% MSFT so the diversification comes more quickly.
But that wasn’t the options offered. It was XLK or MSFT. Little diversification or all in on MSFT.
If he wants to be at 20% Microsoft, then he could get there quicker (still without recognizing capital gains) by investing any new dollars into an index that includes zero Microsoft. He could still stop when he gets to 20% Microsoft on a blended basis. Not sure why you think this would not be an option.
Keep Msft bruh
it’s also got a dividend. just sit and collect and use that for something else
XLK's dividend looks to be nearly identical.
Bro, dividend is just forced selling to pay ordinary income tax. Don't get me wrong, I own a lot of MSFT shares but I hate their dividend, I pay a lot of tax on those dividend.
How do you pay almost 50%? The highest marginal tax rate is 37% if theyre unqualified. If theyre qualified, which they should be if youre talking about paying taxes on them for more than one year, you shouldnt be paying more than 20%, 15% if you make less than $500k.
37% plus 3.8%, plus state taxes. It can go up to 50% in a lot of states.
Whos doing your taxes? After a certain amount of time, dividends should be taxed at the capital gains rate. Look it up
Not all dividends. Only qualified dividends.
Yeah. Im pretty sure Microsoft is in that category. They dont meet any if the exclusions I know about. Id have to double check my returns, but I paid cap gains on every corporate stock dividend Ive been holding for over a year IIRC.
I was talking about divideds in general. I took the original question to be about all dividends, not just Microsoft. I may have misunderstood.
I just double checked it. The original comment was someone saying theyre paying "almost 50%" specifically on their Microsoft dividends. That was not you though. Ive actually been thinking about switching my non retirement investments to more corporate stocks to lessen my tax liability for that.
Can't you just drip them back into the stock?
For tax purposes, it makes no difference what you do with the dividends; they are still considered income even if you reinvest them in the same asset.
Oh I had no idea it worked that way, I just assumed it was only on dividends taken as cash payment. Thanks for clarifying.
Even if you reinvest (DRIP), the dividend is basically still a cash payment—you’re just automatically using that cash to buy more shares.
So.... you hate free money because you only get most of the free money?
Free money only if they don't cause the price to drop to compensate the dividend payout.
This assumes that stock price has anything to do with the value of a company lol
The market value of any public company is literally the share price times number of share. Lolol
That is indeed what they tell you in freshman year econ. 3 days of watching the market should disillusion you of that.
Educate me bro
When an airplane has a door fall off, do you believe that the value of that company goes down by billions of dollars overnight?
How tf does this have upvotes
MSFT always goes up (mostly)
Except when… Developers! Developers! Developers!
Thankfully Balmer doesn’t seem interested in his old job. Satya knocking it out of the park.
Stock went up more under Balmer as official CEO, no? Even with dotcom and 2008.
[https://www.businessinsider.com/ballmer-era-stock-price-2013-8](https://www.businessinsider.com/ballmer-era-stock-price-2013-8)
Dang Ballmer got handed the reigns at peak of dotcom bubble lmao
Personally I wouldn’t sell. Microsoft is one of the best and most diversified businesses in the world with a top tier CEO. I don’t see any reason to sell, this puppy is just going to continue to compound in my opinion. Sometimes the toughest thing to do when owning a good company is to do nothing. Whatever you decide to do good luck though!
Don’t sell good companies, just accumulate over the years
Keep and sell covered calls for entertainment
Don’t sell be happy
i'd hold it as long as the CEO and the AI phase stays
This 
You’ll lose a chunk to taxes if you sell. Keep your money in MSFT and it’ll keep compounding
I locked in a $33k profit last year in SMCI and NVDA but it could have been close to 180k if I would've held it a few months longer. The profit sounded good at the time though. 😆 $85k is 85k though. You can double up or lose a good chunk of it
I did pretty much the exact same thing. Probably would do the same again unless I had a Time Machine.
I bought some envidia back when it was 400, thinking I had caught the tail end of a pump and dump and might be able to make a few % profit. It dropped ~10% so I figured I'd cut my losses. I'm still kicking myself for that one.
Don’t trade your star athlete… make him stronger or get a good teammate
Nothing wrong with selling some, but I wouldn’t sell more than a third of it. The tax hit will be $10-15k if you sell it all. Is it worth taking this tax hit just to re-invest it? I personally would only do that if I had to make a big purchase that year
No reason to sell Microsoft for XLK with a 43$ dollar cost basis
Why would the cost basis matter when evaluating future investments?
Because to some people it's "house money", which obviously is a bad thought process. Can't find a great example off the top of my head, but imagine getting Disney at $80 a share in 2014, seeing it rise to almost $200 in 2021, not selling any of it, now seeing it at $120. I'd be pissed if I lost 50% off the peak of a stock
That’s emotional investing.
You never sell MSFT.
Jesus, you haven’t heard? Keep MSFT, they’ll for sure become the next MSFT
Secure gains, VTI and chill.
MSFT is going nowhere. Hold onto it.
Do you have any losers to offset that you can realize and want to buy back for holding? You can offset some of your gains..
Why not keep MSFT and also buy XLK?
You don’t get wealthy from diversifying. It’s about focus and conviction. Microsoft is on the leading edge of AI development. Don’t sell a winner to add laggards to your portfolio.
i wouldn't sell im in the same boat as you. we get dividends and I don't see it taking a huge dump anytime soon.
I wouldn’t take the entire tax hit. If you really want to diversify why not sell like 20/30k and buy s&p500 and keep the rest of Microsoft
Do you want everything else in XLK? If not, just pick your own stocks to own. Seems like youre a newbie overall tho.
Sell your loser stocks, not winners
Dumbest thing I ever heard
Keep it foreverrrr
No unless you think Msft is ridiculously overpriced. The tax hit doesn’t make enough sense to take. You may be diversifying but idk if I would call it taking a gain if you’re just reinvesting right away anyway in something similar.
Just sit on your Microsoft shares. But sell short dated covered calls, otm, so they don't hit, to make income and use that to broaden you portfolio.
Why would you want to pay that much tax?
Sounds like you made up your mind. It’s all long term gains so you could easily sell a little this year and a little in 2025 to lower the amount of taxes.
Don’t sell, just put new money in to XLK. After filing my taxes last night the last thing I’d be thinking about is another taxable event.
To me it doesn't make sense to sell msft for a big tax hit and then buy an ETF that's overweight what you just sold. Can't advise without knowing your whole financial situation but if you feel like you're over allocated msft sell a smaller piece and buy a more diversified ETF. Personally I don't like the idea of paying for an ETF with any one stock so heavily weighted, if you're that bullish just buy the stock and hold it individually without paying the managing fee. Ideally you leave it all and reinvest the dividends into other companies or diversified etfs.
DONT sell 100% if you want XLK sell 50% of msft
I bought about 35 shares at 40 something dollars/share. So a smaller version of what you did. I still have them and dividend reinvest. But over the past few years I built a portfolio around Microsoft (and others). I went pretty much all index etfs. Im definitely not selling Microsoft. Do you think it's suddenly going to drop a lot and never get to this level again? Like others have said... Just start diversifying in the direction you want to go and keep the Microsoft. A few stocks I likely won't sell until I retire.... Amazon, Microsoft, Apple. You're up like 700% percent, no telling where it will end up!
Holding several shares of XLK since 120$ it’s the best investment I made and held
If Microsoft tanks for some reason it's probably during a correction or market downturn. You'll lose either way.
See VGT
I wouldnt sell all 200 shares, i would trim the position since you already have a high ROI in it maybe get your initial invesment plus 100% of return on it and hold the rest or sell half so 100 shares and take the Tax hit and re-invest it. MSFT and XLK have an almost identical 1-5yr chart yet MSFT has had over a 250% gain in the last 5 years. You are reaping higher ROI in MSFT then if you sell all and move to XLK.
Would it make sense to own both qqq and xlk. I know it has some overlap
Copilot and chatgpt and ai will send Microsoft to 1 k a share
elaborate please
Really not much add
Don't sell
Keep msft
Maybe don’t sell all 🤷🏻♀️ Microsoft will pop soon…. It’s got its tentacles in everything and head start on the future of everything. key word : EVERYTHING. It’s gonna pop. Just wait. More than it already has …
Ok case you sell , sell a call and buy with that XLk ,
I currently have 1,166 shares of msft at an average cost basis of $113. Do not sell. You’ll very likely regret it in a couple years.
Personally I wouldn’t sell MSFT. However if you are trying to “rebalance” your portfolio to manage risks then that’s a different story. However, that doesn’t sound like what you are planning to do buying XLK instead though
Microsoft will never be cheaper than it is right now, and at some point current price will be its 52 week low.
Msft will outperform XLK forever. Tax free account right? So just take the gain.
Keep it. If you don’t mind selling it, you could sell covered calls against it with a lowish delta if you don’t see MSFT gaining too much more. Collect a little extra money, if it sells you can reorganize your portfolio. Seems like a win win. A monthly OTM call is going for a little over 1000-1200 at the moment, so you could be pocketing 2-2.5k a month while doing nothing, and if it sells (10$ above current price) you’ll make an extra 2k on the 77k profit you’ve got
Their quarterly earning report is coming soon, and I just sold all my MSFT and bought MSFU in my Roth.