Money Management

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The stock market can be volatile in the short term. That’s not a big deal when you’re early in your career and can afford more risk. But when you’re nearing retirement, the idea of a bear market is a lot scarier since your money has less time to recover.Alert: highest cash back card we’ve seen now has 0% intro APR into 2026
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to read our full review for free and apply in just 2 minutes. So if you’re about to retire, should you cash out all the stocks in your brokerage account? Not so fast.Why you shouldn’t sell all your stocks before retiringYou typically don’t want to sell off all your stocks ahead of retirement. You’ll still need your investment portfolio to generate returns that are high enough to keep pace with inflation over what could be a 20- or 30-year retirement. Otherwise, you risk running out of money. Stocks are a lot more likely than bonds and cash equivalents, like certificates of deposit (CDs), to produce inflation-beating returns.But you do want to take a look at your asset allocation and possibly shift to more conservative investments. For example, if you’ve invested primarily in stocks most of your life, you may decide to keep 60% of your portfolio invested in stocks while investing the remaining 40% in U.S. Treasuries and other low-risk investments. You could hire a financial advisor if you want a personalized strategy. But if you don’t want to hire someone, click here to review our top robo-advisors. A robo-advisor uses algorithms to suggest a portfolio based on your age, goals, and risk tolerance, and gradually rebalance your money over time. Many robo-advisors also offer a hybrid model that includes some access to a human financial advisor.An alternative to cashing out of the stock marketMany financial advisors recommend retirees use something called the bucket strategy to manage investment risk in retirement. Basically, you separate your investments into three different “buckets” based on your time horizon. Here’s how it works.Bucket No. 1The first bucket consists of cash and cash equivalents, like cash and low-risk investments like money market funds and CDs. You’d want to keep enough in Bucket No. 1 for at least a couple of years of short-term needs. For example, this bucket might consist of six months’ worth of savings in a high-yield savings account for emergencies, plus two years’ worth of expenses invested in CDs.Bucket No. 2The second bucket contains medium-risk investments and is intended for your needs several years into the future. You could invest this bucket in high-quality bonds and some low-risk stocks, such as those that consistently pay dividends.Bucket No. 3The third bucket consists of high-risk investments, primarily stocks. Money in this bucket is reserved for long-term needs, often eight to 10 years into the future. This bucket provides the potential growth your portfolio needs for a retirement that could easily stretch several decades. But because you have money for your short-term needs invested in lower-risk assets, the money in this bucket has time to recover if the stock market tanks.The worst time to sell stocksWhether you’re getting close to retirement or plan on working for another couple of decades, make sure you take a look at your asset allocation from time to time and rebalance as necessary. You’ll want to do this when the stock market is healthy. The worst thing you can do is decide to rebalance in a panic after a rough spell in the market when your money hasn’t had a chance to rebound.Investing in stocks carries risk, but NOT investing in stocks also comes with the risk that your money will lose purchasing power over time. Stocks have a place in most investors’ portfolios, even in retirement.Alert: highest cash back card we’ve seen now has 0% intro APR into 2026
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to read our full review for free and apply in just 2 minutes. We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.”}]] [[{“value”:”

The stock market can be volatile in the short term. That’s not a big deal when you’re early in your career and can afford more risk. But when you’re nearing retirement, the idea of a bear market is a lot scarier since your money has less time to recover.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

So if you’re about to retire, should you cash out all the stocks in your brokerage account? Not so fast.

Why you shouldn’t sell all your stocks before retiring

You typically don’t want to sell off all your stocks ahead of retirement. You’ll still need your investment portfolio to generate returns that are high enough to keep pace with inflation over what could be a 20- or 30-year retirement. Otherwise, you risk running out of money. Stocks are a lot more likely than bonds and cash equivalents, like certificates of deposit (CDs), to produce inflation-beating returns.

But you do want to take a look at your asset allocation and possibly shift to more conservative investments. For example, if you’ve invested primarily in stocks most of your life, you may decide to keep 60% of your portfolio invested in stocks while investing the remaining 40% in U.S. Treasuries and other low-risk investments.

You could hire a financial advisor if you want a personalized strategy. But if you don’t want to hire someone, click here to review our top robo-advisors.

A robo-advisor uses algorithms to suggest a portfolio based on your age, goals, and risk tolerance, and gradually rebalance your money over time. Many robo-advisors also offer a hybrid model that includes some access to a human financial advisor.

An alternative to cashing out of the stock market

Many financial advisors recommend retirees use something called the bucket strategy to manage investment risk in retirement. Basically, you separate your investments into three different “buckets” based on your time horizon. Here’s how it works.

Bucket No. 1

The first bucket consists of cash and cash equivalents, like cash and low-risk investments like money market funds and CDs. You’d want to keep enough in Bucket No. 1 for at least a couple of years of short-term needs. For example, this bucket might consist of six months’ worth of savings in a high-yield savings account for emergencies, plus two years’ worth of expenses invested in CDs.

Bucket No. 2

The second bucket contains medium-risk investments and is intended for your needs several years into the future. You could invest this bucket in high-quality bonds and some low-risk stocks, such as those that consistently pay dividends.

Bucket No. 3

The third bucket consists of high-risk investments, primarily stocks. Money in this bucket is reserved for long-term needs, often eight to 10 years into the future.

This bucket provides the potential growth your portfolio needs for a retirement that could easily stretch several decades. But because you have money for your short-term needs invested in lower-risk assets, the money in this bucket has time to recover if the stock market tanks.

The worst time to sell stocks

Whether you’re getting close to retirement or plan on working for another couple of decades, make sure you take a look at your asset allocation from time to time and rebalance as necessary. You’ll want to do this when the stock market is healthy. The worst thing you can do is decide to rebalance in a panic after a rough spell in the market when your money hasn’t had a chance to rebound.

Investing in stocks carries risk, but NOT investing in stocks also comes with the risk that your money will lose purchasing power over time. Stocks have a place in most investors’ portfolios, even in retirement.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

“}]] Read More 

[[{“value”:”Image source: Getty Images
If you feel like your auto insurance payments have become far more expensive in recent years, you aren’t alone. In many cases, drivers are paying insurance premiums that are 50% greater (or more) than they paid just a couple of years ago.Alert: highest cash back card we’ve seen now has 0% intro APR into 2026
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to read our full review for free and apply in just 2 minutes. With that in mind, here’s how much the average American pays for auto insurance, why it’s become so much more expensive, and how you might be able to save money.Are you paying too much for auto insurance? Click here for our updated list of the best auto insurance companies, where you can compare quotes quickly and easily.The average American’s auto insurance billTo be sure, the average auto insurance premium somewhat depends on who you’re asking. However, according to Motley Fool Money’s own research, the average driver pays $3,017 per year for car insurance.Of course, this can vary dramatically based on what type of vehicle you own, your age and marital status, the amount of coverage you select, and other factors. It can also be heavily dependent on what state you live in. And some insurance companies tend to be cheaper than others, although there’s no way to know what your lowest auto insurance premium could be unless you get personalized quotes.Why has insurance become so expensive?This is significantly more than the average driver was paying just a couple of years ago. In fact, according to Insurify, the cost of the average auto insurance policy increased by 24% in 2023, and is expected to rise by another 22% by the end of this year. In certain states, the 2024 increase could be 50% or more.It might seem logical to blame it on inflation, and that’s certainly a part of it. From 2020 to 2022, the average cost of a new vehicle increased by 19% and repair costs increased by a similar percentage, so it makes sense that this would be factored into insurance prices.However, it isn’t only inflation that is responsible. An increasing frequency of damaging weather events in recent years has led to more frequent and costly claims. And because of the high-dollar nature of auto insurance claims, more people are choosing to involve lawyers in the process, leading to higher average settlement costs for insurance companies.Take the time to shop aroundYou’ve probably seen those Geico commercials that claim “15 minutes can save you 15% or more on your car insurance.” And while I’m not necessarily saying that Geico is going to be the most affordable insurance company for you, there’s some great advice in that line.One of the biggest personal finance mistakes people make is failing to shop around for big-ticket items simply because they assume “it’s all the same.” Mortgages are a good example, as are auto loans.Auto insurance is no exception. While you don’t need to constantly get new auto insurance quotes, it’s a good idea to do so at least once every few years. It doesn’t take too long to obtain a handful of quotes, and the time it does take could be well justified if you can save hundreds of dollars over a year, which isn’t uncommon.And if your auto insurance rates recently increased, now is as good a time as any to make sure you aren’t paying too much.Alert: highest cash back card we’ve seen now has 0% intro APR into 2026
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to read our full review for free and apply in just 2 minutes. We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.”}]] [[{“value”:”

If you feel like your auto insurance payments have become far more expensive in recent years, you aren’t alone. In many cases, drivers are paying insurance premiums that are 50% greater (or more) than they paid just a couple of years ago.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

With that in mind, here’s how much the average American pays for auto insurance, why it’s become so much more expensive, and how you might be able to save money.

Are you paying too much for auto insurance? Click here for our updated list of the best auto insurance companies, where you can compare quotes quickly and easily.

The average American’s auto insurance bill

To be sure, the average auto insurance premium somewhat depends on who you’re asking. However, according to Motley Fool Money’s own research, the average driver pays $3,017 per year for car insurance.

Of course, this can vary dramatically based on what type of vehicle you own, your age and marital status, the amount of coverage you select, and other factors. It can also be heavily dependent on what state you live in. And some insurance companies tend to be cheaper than others, although there’s no way to know what your lowest auto insurance premium could be unless you get personalized quotes.

Why has insurance become so expensive?

This is significantly more than the average driver was paying just a couple of years ago. In fact, according to Insurify, the cost of the average auto insurance policy increased by 24% in 2023, and is expected to rise by another 22% by the end of this year. In certain states, the 2024 increase could be 50% or more.

It might seem logical to blame it on inflation, and that’s certainly a part of it. From 2020 to 2022, the average cost of a new vehicle increased by 19% and repair costs increased by a similar percentage, so it makes sense that this would be factored into insurance prices.

However, it isn’t only inflation that is responsible. An increasing frequency of damaging weather events in recent years has led to more frequent and costly claims. And because of the high-dollar nature of auto insurance claims, more people are choosing to involve lawyers in the process, leading to higher average settlement costs for insurance companies.

Take the time to shop around

You’ve probably seen those Geico commercials that claim “15 minutes can save you 15% or more on your car insurance.” And while I’m not necessarily saying that Geico is going to be the most affordable insurance company for you, there’s some great advice in that line.

One of the biggest personal finance mistakes people make is failing to shop around for big-ticket items simply because they assume “it’s all the same.” Mortgages are a good example, as are auto loans.

Auto insurance is no exception. While you don’t need to constantly get new auto insurance quotes, it’s a good idea to do so at least once every few years. It doesn’t take too long to obtain a handful of quotes, and the time it does take could be well justified if you can save hundreds of dollars over a year, which isn’t uncommon.

And if your auto insurance rates recently increased, now is as good a time as any to make sure you aren’t paying too much.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

“}]] Read More 

[[{“value”:”Image source: Getty Images
Stocks go up, and stocks go down. The S&P 500 index (which is what most Americans are talking about when they say “the stock market”) can gain or lose a lot of value in a single year, month, or day. But if you’re trying to decide if now is the best time to buy stocks, you might be falling into a trap that can cost you money.Alert: highest cash back card we’ve seen now has 0% intro APR into 2026
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to read our full review for free and apply in just 2 minutes. A big stock market downturn or a big run-up in stock prices can make some investors nervous. People might be tempted to sell stocks, stop buying stocks, or pause their retirement account contributions in hopes of something that’s known as “timing the market.”Let’s look at what timing the market means, why you shouldn’t use this risky investment strategy — and what you should do with your money instead.Why people fall into the trap of trying to time the marketIf you’re asking, “Is now a good time to buy stocks?” It’s often the wrong question. This type of question means investors are trying to make a risky bet based on what they think will happen to stock prices in the near future.Two powerful feelings tend to drive people’s desire to time the market:Greed: Stocks recently went down, and so stocks feel “cheap.” People think, “Now is a good time to buy more stocks.”Fear: Stocks recently went up, and so stocks feel “expensive.” People think, “Prices probably won’t keep going up, so I should sell stocks, or stop buying stocks.” (Or: stocks recently went down, so people worry that stocks will crash — and they panic-sell their stocks.)Here’s the problem: no one knows what’s going to happen next in the stock market. Sometimes, in a bear market, stocks go down… and keep going down for a long time. Sometimes, in a bull market, stocks go up… and just keep surging upwards. Trying to time the market is usually a mistake, because of the unpredictability of the stock market.Stock prices are determined by a wide range of complex economic factors and business decisions beyond any individual’s control. The market is constantly in motion based on millions of decisions by people controlling trillions of dollars. Even Wall Street professionals cannot reliably time the market.One way to avoid the stress of trying to time the market is to use a robo-advisor platform. Robo-advisors make it easier for you to automatically invest and grow your money for the future, based on your goals, age, and how much investment risk you’re comfortable taking.Click here to learn more about our curated picks for the best robo-advisors — offered by top-rated brokerages with a wide range of investment choices and low fees.Timing the market: Lock in losses, miss out on gainsTiming the stock market is not some clever parlor game for investment gurus; it causes real people to lose real money. If you’re trying to time the market, you run the risk of:Locking in investment losses by selling stocks at the wrong time.Missing out on investment gains by being on the sidelines right before the stock market goes up even higher.Sometimes stocks veer wildly back and forth, within one month or even one week. As of Nov. 24, 2024, the S&P 500 index is up 25.86% year to date. If you’d put $1,000 into an S&P 500 index ETF on Jan. 1, 2024, it would be worth about $1,258 today. But to get those gains, you have to hold on to your investments. Timing the market can cause people to overreact to every little short-term up or down.For example, the S&P 500 saw some big downturns in 2024:July 31-Aug. 5: -6.08%April 11-April 19: -4.46%Aug. 30-Sept. 6: -4.25%If you panicked and sold stocks right after any of those drawdowns, you would have lost money for the rest of the year.On any given day, even when the S&P 500 index reaches all-time highs, no one really knows if stocks are truly cheap or expensive. Your personal fear or greed won’t necessarily be correct or get rewarded. Even if you believe that any one company’s stock, or the entire S&P 500 index of America’s 500 largest publicly traded companies, is “cheap” or “overpriced” right now, the market will decide.What to do instead of timing the marketTry not to worry about the day-to-day fluctuations of the stock market. Just stick with your long-term investment plan. Financial advisor Ben Carlson recently published a chart showing that, based on the past 31 years of S&P 500 index returns, the index almost always goes up in the long run.If you have a long-term time horizon, such as investing for a retirement that’s decades away, there is no such thing as a “bad time” to buy stocks. Instead of asking, “Is today the right time to buy stocks?” Ask yourself: “How many years do I have for this money to grow?”Don’t try to time the market by waiting until stocks go down to reach “the right price.” Instead, keep using your 401(k), IRA, or other investment accounts to buy stocks each payday.Bottom lineIf you’re investing for retirement, hopefully, you still have many years of earning, saving, and investment growth ahead of you. If you’re a long-term investor, buying stocks with S&P 500 index ETFs is often the right choice, even if the stock market just recently went up or down.Alert: highest cash back card we’ve seen now has 0% intro APR into 2026
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to read our full review for free and apply in just 2 minutes. We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.”}]] [[{“value”:”

Stocks go up, and stocks go down. The S&P 500 index (which is what most Americans are talking about when they say “the stock market”) can gain or lose a lot of value in a single year, month, or day. But if you’re trying to decide if now is the best time to buy stocks, you might be falling into a trap that can cost you money.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

A big stock market downturn or a big run-up in stock prices can make some investors nervous. People might be tempted to sell stocks, stop buying stocks, or pause their retirement account contributions in hopes of something that’s known as “timing the market.”

Let’s look at what timing the market means, why you shouldn’t use this risky investment strategy — and what you should do with your money instead.

Why people fall into the trap of trying to time the market

If you’re asking, “Is now a good time to buy stocks?” It’s often the wrong question. This type of question means investors are trying to make a risky bet based on what they think will happen to stock prices in the near future.

Two powerful feelings tend to drive people’s desire to time the market:

• Greed: Stocks recently went down, and so stocks feel “cheap.” People think, “Now is a good time to buy more stocks.”
• Fear: Stocks recently went up, and so stocks feel “expensive.” People think, “Prices probably won’t keep going up, so I should sell stocks, or stop buying stocks.” (Or: stocks recently went down, so people worry that stocks will crash — and they panic-sell their stocks.)

Here’s the problem: no one knows what’s going to happen next in the stock market. Sometimes, in a bear market, stocks go down… and keep going down for a long time. Sometimes, in a bull market, stocks go up… and just keep surging upwards. Trying to time the market is usually a mistake, because of the unpredictability of the stock market.

Stock prices are determined by a wide range of complex economic factors and business decisions beyond any individual’s control. The market is constantly in motion based on millions of decisions by people controlling trillions of dollars. Even Wall Street professionals cannot reliably time the market.

One way to avoid the stress of trying to time the market is to use a robo-advisor platform. Robo-advisors make it easier for you to automatically invest and grow your money for the future, based on your goals, age, and how much investment risk you’re comfortable taking.

Click here to learn more about our curated picks for the best robo-advisors — offered by top-rated brokerages with a wide range of investment choices and low fees.

Timing the market: Lock in losses, miss out on gains

Timing the stock market is not some clever parlor game for investment gurus; it causes real people to lose real money. If you’re trying to time the market, you run the risk of:

• Locking in investment losses by selling stocks at the wrong time.
• Missing out on investment gains by being on the sidelines right before the stock market goes up even higher.

Sometimes stocks veer wildly back and forth, within one month or even one week. As of Nov. 24, 2024, the S&P 500 index is up 25.86% year to date. If you’d put $1,000 into an S&P 500 index ETF on Jan. 1, 2024, it would be worth about $1,258 today. But to get those gains, you have to hold on to your investments. Timing the market can cause people to overreact to every little short-term up or down.

For example, the S&P 500 saw some big downturns in 2024:

• July 31-Aug. 5: -6.08%
• April 11-April 19: -4.46%
• Aug. 30-Sept. 6: -4.25%

If you panicked and sold stocks right after any of those drawdowns, you would have lost money for the rest of the year.

On any given day, even when the S&P 500 index reaches all-time highs, no one really knows if stocks are truly cheap or expensive. Your personal fear or greed won’t necessarily be correct or get rewarded. Even if you believe that any one company’s stock, or the entire S&P 500 index of America’s 500 largest publicly traded companies, is “cheap” or “overpriced” right now, the market will decide.

What to do instead of timing the market

Try not to worry about the day-to-day fluctuations of the stock market. Just stick with your long-term investment plan. Financial advisor Ben Carlson recently published a chart showing that, based on the past 31 years of S&P 500 index returns, the index almost always goes up in the long run.

If you have a long-term time horizon, such as investing for a retirement that’s decades away, there is no such thing as a “bad time” to buy stocks. Instead of asking, “Is today the right time to buy stocks?” Ask yourself: “How many years do I have for this money to grow?”

Don’t try to time the market by waiting until stocks go down to reach “the right price.” Instead, keep using your 401(k), IRA, or other investment accounts to buy stocks each payday.

Bottom line

If you’re investing for retirement, hopefully, you still have many years of earning, saving, and investment growth ahead of you. If you’re a long-term investor, buying stocks with S&P 500 index ETFs is often the right choice, even if the stock market just recently went up or down.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

“}]] Read More 

[[{“value”:”Image source: Getty Images
The holiday season is upon us. Time for jingling bells and twinkling lights, and lots of merry and bright shenanigans. But if we’re not careful, it’s also a great time to ruin our credit.Alert: highest cash back card we’ve seen now has 0% intro APR into 2026
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to read our full review for free and apply in just 2 minutes. Oh yes, dear reader, the yuletide may be fabulous, but it doesn’t get that way for free — and a whopping 55% of consumers have admitted to overspending on gifts for others, according to Experian data.Since almost 6 in 10 of those overspenders are using credit cards to do so, it’s time we have a little chat about how you can most effectively ruin your credit this holiday season. After all, we might as well go big or go home, right?Here are four things to not do this holiday season if you want to have good credit in January.1. OverspendingAs mentioned above, over half of holiday shoppers have admitted to overspending during the holiday season, a situation that is not ideal. I know, I’ve done it myself. But if you want to keep your credit solid, you have to have some discipline and know where to draw the line.I’d advise setting up a specific holiday budget, and not let yourself get carried away with making magic this year. Check out budgeting apps like the ones we recommend here to find one that fits the bill. And hey, if you like using it for holiday spending, consider using it the rest of the year, too.When you overspend, you don’t have as much for emergencies and even necessities, depending on just how over you went. This can make making payments harder, which will hurt your credit in ways big and small.2. Maxing out your credit cardsIt should go without saying that maxing out your credit cards is not great, but we all tell ourselves a lot of lies this time of year. We’re just going to buy this one big-ticket item and then pay it off quickly, or we’ll never find a deal this good again, so we might as well jump on it before it’s too late.I am as guilty of this as anybody, so I am not judging you, but if we’re going to maintain the progress on our credit that we’ve worked so hard for this year, we’ve got to keep an eye on how we manage our credit, even in December. Maxing out your credit card, even for a month, can hit your credit score hard, and if you carry a balance of more than 30% of your credit line for any significant amount of time, you’re going to feel it.3. Using your emergency fund for fun moneyWe have to remember that our emergency fund is a sacred space all year long, not just until the holidays or our birthday comes around. That fund is there for the rough times, to make sure that we can still buy what we need and pay our payments on time, so we can continue to build our credit.Missing even one payment can hurt badly and stay on our credit reports for up to 10 years — it’s even worse if that one late payment turns into several, and a default is around the corner. What you should do next year is continue to add to your emergency fund, but also build yourself a fun money account. Even a small contribution can build over time.One thing I do to build up my fun money account, no joking, is that I take the money I save with my preferred cash back app and use that for party time. It’s technically money I’d not have otherwise, and not money I’m really missing. Check out this list of our favorite cash back apps to get started earning your own fun money.4. Not preparing for utility bill spikesThis might seem totally unrelated, but a funny thing happens this time of year — it gets real cold in the Northern Hemisphere. With all this cold weather comes an increase in energy usage, and huge spikes in utility bills, some that can truly break you if you’re not prepared.Some utility companies allow you to pay an average monthly payment for your utilities all year long, which can really help even out the dramatic hump going into the winter (and in the heat of the summer). Call your company and see what it offers for customers.Spending all your extra money on a sudden utility spike means you’re going to end up not putting money back for emergencies or paying extra payments on your credit cards, or worse — putting those utility bills with those credit cards, driving up your credit utilization over time. None of this ends well, so be prepared, because ’tis also the season for high utility bills.Festively ruining your credit this season isn’t inevitableAlthough there are a remarkable number of pitfalls to avoid this season, you don’t have to fall into them if you’re very careful with how and what you spend your money on. I know it’s less fun to budget for holiday spending and not just use your credit card with your heart, but your financial life will thank you for not crashing it for Kris Kringle.Alert: highest cash back card we’ve seen now has 0% intro APR into 2026
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to read our full review for free and apply in just 2 minutes. We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.”}]] [[{“value”:”

The holiday season is upon us. Time for jingling bells and twinkling lights, and lots of merry and bright shenanigans. But if we’re not careful, it’s also a great time to ruin our credit.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

Oh yes, dear reader, the yuletide may be fabulous, but it doesn’t get that way for free — and a whopping 55% of consumers have admitted to overspending on gifts for others, according to Experian data.

Since almost 6 in 10 of those overspenders are using credit cards to do so, it’s time we have a little chat about how you can most effectively ruin your credit this holiday season. After all, we might as well go big or go home, right?

Here are four things to not do this holiday season if you want to have good credit in January.

1. Overspending

As mentioned above, over half of holiday shoppers have admitted to overspending during the holiday season, a situation that is not ideal. I know, I’ve done it myself. But if you want to keep your credit solid, you have to have some discipline and know where to draw the line.

I’d advise setting up a specific holiday budget, and not let yourself get carried away with making magic this year. Check out budgeting apps like the ones we recommend here to find one that fits the bill. And hey, if you like using it for holiday spending, consider using it the rest of the year, too.

When you overspend, you don’t have as much for emergencies and even necessities, depending on just how over you went. This can make making payments harder, which will hurt your credit in ways big and small.

2. Maxing out your credit cards

It should go without saying that maxing out your credit cards is not great, but we all tell ourselves a lot of lies this time of year. We’re just going to buy this one big-ticket item and then pay it off quickly, or we’ll never find a deal this good again, so we might as well jump on it before it’s too late.

I am as guilty of this as anybody, so I am not judging you, but if we’re going to maintain the progress on our credit that we’ve worked so hard for this year, we’ve got to keep an eye on how we manage our credit, even in December. Maxing out your credit card, even for a month, can hit your credit score hard, and if you carry a balance of more than 30% of your credit line for any significant amount of time, you’re going to feel it.

3. Using your emergency fund for fun money

We have to remember that our emergency fund is a sacred space all year long, not just until the holidays or our birthday comes around. That fund is there for the rough times, to make sure that we can still buy what we need and pay our payments on time, so we can continue to build our credit.

Missing even one payment can hurt badly and stay on our credit reports for up to 10 years — it’s even worse if that one late payment turns into several, and a default is around the corner. What you should do next year is continue to add to your emergency fund, but also build yourself a fun money account. Even a small contribution can build over time.

One thing I do to build up my fun money account, no joking, is that I take the money I save with my preferred cash back app and use that for party time. It’s technically money I’d not have otherwise, and not money I’m really missing. Check out this list of our favorite cash back apps to get started earning your own fun money.

4. Not preparing for utility bill spikes

This might seem totally unrelated, but a funny thing happens this time of year — it gets real cold in the Northern Hemisphere. With all this cold weather comes an increase in energy usage, and huge spikes in utility bills, some that can truly break you if you’re not prepared.

Some utility companies allow you to pay an average monthly payment for your utilities all year long, which can really help even out the dramatic hump going into the winter (and in the heat of the summer). Call your company and see what it offers for customers.

Spending all your extra money on a sudden utility spike means you’re going to end up not putting money back for emergencies or paying extra payments on your credit cards, or worse — putting those utility bills with those credit cards, driving up your credit utilization over time. None of this ends well, so be prepared, because ’tis also the season for high utility bills.

Festively ruining your credit this season isn’t inevitable

Although there are a remarkable number of pitfalls to avoid this season, you don’t have to fall into them if you’re very careful with how and what you spend your money on. I know it’s less fun to budget for holiday spending and not just use your credit card with your heart, but your financial life will thank you for not crashing it for Kris Kringle.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

“}]] Read More 

[[{“value”:”Image source: Getty Images
Average auto insurance costs went up by 22% in 2024, and 23% in 2023. No, that’s not a typo: Americans have endured two years in a row of 20% (or more) increases in their auto insurance premiums. Where will this end? Many people might feel like auto insurance costs will just keep skyrocketing forever, for reasons beyond their control.Alert: highest cash back card we’ve seen now has 0% intro APR into 2026
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to read our full review for free and apply in just 2 minutes. The fact is, auto insurance rates go up for lots of complex nationwide reasons — the overall higher price of cars, the rising cost of car repairs, more frequent car crashes, and more severe natural disasters like hurricanes and wildfires that destroy vehicles. All of these problems cause higher losses for car insurance companies.Some people’s auto insurance also gets more expensive because of speeding tickets or accident history. But auto insurance rates also go up for a few other surprisingly personal reasons — which are mostly beyond any drivers’ control.Before we dig into the details — anyone who wants to cut to the chase and find cheaper car insurance can start right now. Click here to learn more about the best cheap car insurance companies — and see how these award-winning auto insurers can help drivers save money.Now let’s look at why auto insurance rates keep going up — and how drivers can take matters into their own hands to try to get cheaper car insurance in 2025.1. Driver’s credit scoreMany drivers might not realize this, but even for people who have a clean driving record, having problems on your credit history can drive up the cost of car insurance. Car insurance for drivers with poor credit costs more than twice as much, on average, as car insurance for people with excellent credit.Here’s data on average monthly car insurance costs from 2023, based on Motley Fool Money research:Average cost for drivers with good credit: $162Average cost for drivers with poor credit: $345Poor credit can cost drivers an extra 53% on auto insurance. People who have had previous financial trouble can expect to be treated as higher-risk borrowers by banks. Unfortunately, poor credit also causes drivers to be treated as higher-risk customers by auto insurance companies.2. Driver’s ageAnother big reason why car insurance is expensive is the age of the driver. Young people are less experienced behind the wheel. They sometimes are still learning to avoid risky situations, control their impulses, put down their phones, and tamp down their road rage. For all these reasons, younger drivers are rated by auto insurance companies as higher risk than older drivers.Research from 2023 found these national average car insurance rates for drivers at different ages:Age 18: $5,988 per yearAge 35: $2,195 per yearAge 65: $1,979 per yearThe cost of car insurance for teen drivers can be a massive expense. Consider how little an 18-year-old might earn at their part-time job, and it might not be worth buying a car for a teenager if the car insurance alone costs almost $500 per month. Fewer teenagers nowadays are getting driver’s licenses, compared to previous generations. Maybe the high cost of teen car insurance is part of the reason why.3. Driver’s sexMen tend to get into more severe and fatal car crashes than women. Research from the Insurance Institute for Highway Safety found that, from 1975 to 2019, men died in car crashes twice as often as women, and as of 2019, 71% of all car crash deaths were men.But even if men are more likely to die in car crashes, there seems to be a better balance of the total frequency and costliness of car crashes involving men and women as drivers. Gender equality is not yet a reality when looking at the wage gap in the workplace, but it’s getting closer in the world of auto insurance. Men pay slightly higher auto insurance rates than women, but only about $2.16 more per month, on average.4. Driver’s state of residenceEven drivers with great credit scores, a clean driving history, and a “safe” age might still get hit by high insurance costs just for living in the wrong state. The cost of car insurance fluctuates wildly from one state to another.The highest-cost state for car insurance in 2023 was Michigan, with an average annual car insurance premium of $5,766. That’s almost twice the national average of $3,017, and much more expensive than Michigan’s neighboring states of Wisconsin ($2,346), Ohio ($2,238) and Indiana ($2,065).Why does car insurance cost so much more in different states? Each state has its own little car insurance market, with its own state-level laws and policies that affect insurance prices. Some states make it harder for drivers to buy affordable minimum liability-only insurance policies. Different states might have higher accident rates, higher incidence of natural disasters, and higher costs of lawsuits.Is it ever worth moving to another state because the car insurance costs are too high? For most people, probably not. But if present trends continue, some people in states like Michigan might start to feel like their car insurance costs almost as much as their monthly housing payment.Bottom linePeople who are feeling burned out on car insurance costs should take matters into their own hands and shop around for price quotes. The best car insurance companies might offer a better deal compared to the driver’s current insurance policy.Alert: highest cash back card we’ve seen now has 0% intro APR into 2026
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to read our full review for free and apply in just 2 minutes. We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.”}]] [[{“value”:”

Average auto insurance costs went up by 22% in 2024, and 23% in 2023. No, that’s not a typo: Americans have endured two years in a row of 20% (or more) increases in their auto insurance premiums. Where will this end? Many people might feel like auto insurance costs will just keep skyrocketing forever, for reasons beyond their control.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

The fact is, auto insurance rates go up for lots of complex nationwide reasons — the overall higher price of cars, the rising cost of car repairs, more frequent car crashes, and more severe natural disasters like hurricanes and wildfires that destroy vehicles. All of these problems cause higher losses for car insurance companies.

Some people’s auto insurance also gets more expensive because of speeding tickets or accident history. But auto insurance rates also go up for a few other surprisingly personal reasons — which are mostly beyond any drivers’ control.

Before we dig into the details — anyone who wants to cut to the chase and find cheaper car insurance can start right now. Click here to learn more about the best cheap car insurance companies — and see how these award-winning auto insurers can help drivers save money.

Now let’s look at why auto insurance rates keep going up — and how drivers can take matters into their own hands to try to get cheaper car insurance in 2025.

1. Driver’s credit score

Many drivers might not realize this, but even for people who have a clean driving record, having problems on your credit history can drive up the cost of car insurance. Car insurance for drivers with poor credit costs more than twice as much, on average, as car insurance for people with excellent credit.

Here’s data on average monthly car insurance costs from 2023, based on Motley Fool Money research:

• Average cost for drivers with good credit: $162
• Average cost for drivers with poor credit: $345

Poor credit can cost drivers an extra 53% on auto insurance. People who have had previous financial trouble can expect to be treated as higher-risk borrowers by banks. Unfortunately, poor credit also causes drivers to be treated as higher-risk customers by auto insurance companies.

2. Driver’s age

Another big reason why car insurance is expensive is the age of the driver. Young people are less experienced behind the wheel. They sometimes are still learning to avoid risky situations, control their impulses, put down their phones, and tamp down their road rage. For all these reasons, younger drivers are rated by auto insurance companies as higher risk than older drivers.

Research from 2023 found these national average car insurance rates for drivers at different ages:

• Age 18: $5,988 per year
• Age 35: $2,195 per year
• Age 65: $1,979 per year

The cost of car insurance for teen drivers can be a massive expense. Consider how little an 18-year-old might earn at their part-time job, and it might not be worth buying a car for a teenager if the car insurance alone costs almost $500 per month. Fewer teenagers nowadays are getting driver’s licenses, compared to previous generations. Maybe the high cost of teen car insurance is part of the reason why.

3. Driver’s sex

Men tend to get into more severe and fatal car crashes than women. Research from the Insurance Institute for Highway Safety found that, from 1975 to 2019, men died in car crashes twice as often as women, and as of 2019, 71% of all car crash deaths were men.

But even if men are more likely to die in car crashes, there seems to be a better balance of the total frequency and costliness of car crashes involving men and women as drivers. Gender equality is not yet a reality when looking at the wage gap in the workplace, but it’s getting closer in the world of auto insurance. Men pay slightly higher auto insurance rates than women, but only about $2.16 more per month, on average.

4. Driver’s state of residence

Even drivers with great credit scores, a clean driving history, and a “safe” age might still get hit by high insurance costs just for living in the wrong state. The cost of car insurance fluctuates wildly from one state to another.

The highest-cost state for car insurance in 2023 was Michigan, with an average annual car insurance premium of $5,766. That’s almost twice the national average of $3,017, and much more expensive than Michigan’s neighboring states of Wisconsin ($2,346), Ohio ($2,238) and Indiana ($2,065).

Why does car insurance cost so much more in different states? Each state has its own little car insurance market, with its own state-level laws and policies that affect insurance prices. Some states make it harder for drivers to buy affordable minimum liability-only insurance policies. Different states might have higher accident rates, higher incidence of natural disasters, and higher costs of lawsuits.

Is it ever worth moving to another state because the car insurance costs are too high? For most people, probably not. But if present trends continue, some people in states like Michigan might start to feel like their car insurance costs almost as much as their monthly housing payment.

Bottom line

People who are feeling burned out on car insurance costs should take matters into their own hands and shop around for price quotes. The best car insurance companies might offer a better deal compared to the driver’s current insurance policy.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

“}]] Read More 

[[{“value”:”Image source: Getty Images
For me, it’s much easier to buy a stock than sell one. Not least because there’s a lot of FOMO involved in selling. When I sell an investment that’s performed well, I worry I’m missing out on bigger future gains. If I cut my losses on something that’s lost money, I’m left with an annoying doubt I should have waited longer.Alert: highest cash back card we’ve seen now has 0% intro APR into 2026
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to read our full review for free and apply in just 2 minutes. If you’re looking to sell some of the stocks in your brokerage account, first answer the following questions to help you avoid seller’s remorse.1. Why do you want to sell?It’s easy to let emotions drive your actions when investing. Especially at times of volatility when it looks like the value of your nest egg is plummeting. If you want to sell purely because the price has gone up or down, reconsider.As a long-term investor, it’s important not to make decisions based on price action alone. That isn’t to say you should never sell — just that it’s good to take a beat and avoid knee-jerk trading. Perhaps you need the money. Or you’ve lost confidence in the company. Or you’ve found an asset you think will perform much better. Those are all good reasons to switch things up.Click here to learn more about how the best brokerages make it easy to buy and sell stocks. Not only can you find stock brokers that charge zero commissions on many trades, but some will also offer access to expert research and charting tools.2. Does your investment thesis still hold?I’ve learned the hard way that I always need to put my “why” in writing when buying stocks. It makes a huge difference when deciding whether to hold or sell. For example, let’s say you invest in a cybersecurity company. It has a strong position in the market, invests heavily in research and development, and you trust the management team.But there’s a glitch in the technology. Several big clients pull their business. The CEO quits. Suddenly, your investment thesis doesn’t seem so valid. You sell.What about a different scenario? The company reacts quickly to remedy the glitch and doesn’t lose many major clients. It improves its software. The share price falls but you think your rationale still makes sense. You hold.3. Is your portfolio still in line with your investment goals?If you’re a buy-and-hold investor, it’s tempting to leave your investments untouched for years. But a portfolio is a dynamic beast — and so are your needs. It’s a good idea to check in with your investments roughly every six to 12 months.Think about whether your goals have changed. Perhaps your risk tolerance isn’t what it was. Maybe your life circumstances have changed and you’re now planning on getting married, having kids, or buying a house. Or not doing any of those things. As your life focus shifts, you might also need to tweak your portfolio.Equally, you’ll likely want to reduce risk as your retirement gets closer. You’d potentially increase your holdings of safer assets like bonds and lower your exposure to riskier assets like stocks as you get older. A diversified portfolio that’s suitable for your level of risk tolerance is central to successful investing.On the other side, perhaps your investment goals and strategy remain the same, but the value of your assets has shifted. Maybe you had some AI-focused stocks that performed exceptionally well and your portfolio is now overly weighted toward tech. You might rebalance things to reduce your exposure. Some investors also use robo-advisors to keep things balanced.4. What are the tax implications of selling?Generally, if you sell a stock for a profit, you’ll have to pay tax on the gains. Exactly how much depends on what type of account you use, what you’re selling, and how long you’ve held the investment. If you sell stocks at a loss, you may be able to use that to offset any gains.One big exception to this is if you’re using a tax-advantaged account such as an IRA or Roth IRA. Before you sell, work out how it might impact your tax bill — and if necessary get financial advice on how to best manage it.Every investor needs to learn when to sellIt takes discipline to hold on to stocks during the rough times, though it helps if you have a clear investment rationale to lean on. That can help you know if it’s a short-term issue that will pass or a bigger problem that will damage your investment’s long-term potential.As with most things in life, there’s rarely a definitive right or wrong. We have to make the best decisions we can based on our circumstances and the information we have.Alert: highest cash back card we’ve seen now has 0% intro APR into 2026
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to read our full review for free and apply in just 2 minutes. We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.”}]] [[{“value”:”

For me, it’s much easier to buy a stock than sell one. Not least because there’s a lot of FOMO involved in selling. When I sell an investment that’s performed well, I worry I’m missing out on bigger future gains. If I cut my losses on something that’s lost money, I’m left with an annoying doubt I should have waited longer.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

If you’re looking to sell some of the stocks in your brokerage account, first answer the following questions to help you avoid seller’s remorse.

1. Why do you want to sell?

It’s easy to let emotions drive your actions when investing. Especially at times of volatility when it looks like the value of your nest egg is plummeting. If you want to sell purely because the price has gone up or down, reconsider.

As a long-term investor, it’s important not to make decisions based on price action alone. That isn’t to say you should never sell — just that it’s good to take a beat and avoid knee-jerk trading. Perhaps you need the money. Or you’ve lost confidence in the company. Or you’ve found an asset you think will perform much better. Those are all good reasons to switch things up.

Click here to learn more about how the best brokerages make it easy to buy and sell stocks. Not only can you find stock brokers that charge zero commissions on many trades, but some will also offer access to expert research and charting tools.

2. Does your investment thesis still hold?

I’ve learned the hard way that I always need to put my “why” in writing when buying stocks. It makes a huge difference when deciding whether to hold or sell. For example, let’s say you invest in a cybersecurity company. It has a strong position in the market, invests heavily in research and development, and you trust the management team.

But there’s a glitch in the technology. Several big clients pull their business. The CEO quits. Suddenly, your investment thesis doesn’t seem so valid. You sell.

What about a different scenario? The company reacts quickly to remedy the glitch and doesn’t lose many major clients. It improves its software. The share price falls but you think your rationale still makes sense. You hold.

3. Is your portfolio still in line with your investment goals?

If you’re a buy-and-hold investor, it’s tempting to leave your investments untouched for years. But a portfolio is a dynamic beast — and so are your needs. It’s a good idea to check in with your investments roughly every six to 12 months.

Think about whether your goals have changed. Perhaps your risk tolerance isn’t what it was. Maybe your life circumstances have changed and you’re now planning on getting married, having kids, or buying a house. Or not doing any of those things. As your life focus shifts, you might also need to tweak your portfolio.

Equally, you’ll likely want to reduce risk as your retirement gets closer. You’d potentially increase your holdings of safer assets like bonds and lower your exposure to riskier assets like stocks as you get older. A diversified portfolio that’s suitable for your level of risk tolerance is central to successful investing.

On the other side, perhaps your investment goals and strategy remain the same, but the value of your assets has shifted. Maybe you had some AI-focused stocks that performed exceptionally well and your portfolio is now overly weighted toward tech. You might rebalance things to reduce your exposure. Some investors also use robo-advisors to keep things balanced.

4. What are the tax implications of selling?

Generally, if you sell a stock for a profit, you’ll have to pay tax on the gains. Exactly how much depends on what type of account you use, what you’re selling, and how long you’ve held the investment. If you sell stocks at a loss, you may be able to use that to offset any gains.

One big exception to this is if you’re using a tax-advantaged account such as an IRA or Roth IRA. Before you sell, work out how it might impact your tax bill — and if necessary get financial advice on how to best manage it.

Every investor needs to learn when to sell

It takes discipline to hold on to stocks during the rough times, though it helps if you have a clear investment rationale to lean on. That can help you know if it’s a short-term issue that will pass or a bigger problem that will damage your investment’s long-term potential.

As with most things in life, there’s rarely a definitive right or wrong. We have to make the best decisions we can based on our circumstances and the information we have.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

“}]] Read More