MrFireStation posted: " In investing, it is often better to be lucky than right. I was very lucky with some predictions that I made this exact week last year and doubly lucky that the market didn't behave the way I thought it would! Simply put, I predicted that Biden wou"
In investing, it is often better to be lucky than right. I was very lucky with some predictions that I made this exact week last year and doubly lucky that the market didn't behave the way I thought it would!
Simply put, I predicted that Biden would win the Presidency, that there was a good chance the Democrats would take Congress, and they would work together to raise taxes on folks like me. I was dead on.
My prediction caused me to accelerate exercising a big chunk of MegaCorp stock options. I figured that if correct, it meant a stock market dip and a big tax bill to pay. I was dead wrong on this prediction. Lucky me.
Instead of declining, the stock market (S&P 500) shot up an amazing +28% in the last year, but MegaCorp fell about 7%. I was lucky to sell those leveraged MegaCorp stock options - and reinvest them in an S&P 500 fund. My original plan was to keep extra cash, but I was already sitting on enough. I timed the MegaCorp sale & S&P purchase perfectly and still took advantage of the lower 2020 tax rates.
Now that I'm ahead, I need to get clever about when to realize the gains on the S&P 500 fund appreciation. The money is invested for the long term, so I guess I can wait for power (and tax rates) to shift again in Washington DC. I'm smart enough to wait if they are dumb enough to keep changing the rates up & down!
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