Sell Now, Buy Later Calculator - Coping With Falling Stock Prices
When a stock that you own moves to the price downside, you can hold it and ride out the price drop. Or you can sell the stock to protect your profits or control losses and, at a later date, buy the stock at a lower price using the proceeds from the earlier sale. Which strategy is best in terms of making money depends on how low the stock goes and how much it recovers in the future. And you must consider transaction costs such as commissions and taxes on gains.
The Sell Now, Buy Later Calculator assumes that you own a given number of shares at the beginning of the analysis. You'll need to specify the price at which and number of years from now that you'll buy shares. And you'll need to specify the price and number of years from now that the value of each of the following three investment strategies will be computed.
- Sell no shares now and buy no shares later - hold initial shares and collect dividends if stock pays them.
- Sell all shares now and buy no shares later- liquidate all shares and collect interest on cash proceeds.
- Sell all shares now and buy shares later - sell all shares and buy shares later at a specified price with proceeds from sale. Collect interest on cash proceeds until the stock purchase. Collect dividends if stock pays them after the stock purchase.
To get a quick feel for the calculator, click on the Calculate Returns button using the default input values. In a few seconds the results will be displayed on a new page. After looking at the results, you'll be ready to enter your own input.