The way you’ll liquidate your stock holdings will depend on how you purchased them and manage them. For example, did you use an online trading platform, work with a stockbroker or get a paper certificate as a gift? No matter how you’re holding your stock, you should be able to liquidate stocks in a same-day (and possibly much faster) timeframe to take advantage of your goals.
Record Your Transaction History
As you invest in future months and years, you’ll want to be able to refer to the performance of the individual investments you’ve purchased. For that reason, make sure you have a record of when you purchased your stocks, the price you paid, the number of shares, any dividends they paid, your sale price, any commissions or fees you paid and your tax liability.
Read More: What Does Hold Stock Mean?
Call Your Broker
If you purchased your shares using a stockbroker or other financial professional, call her to let her know you want to sell your stocks. Be prepared for her to ask why, how this decision fits into your goals and what you want to do with the cash you’ll have.
You can ask her to sell when/if the stock gets to a certain price, tell her to sell it immediately or ask her to sell it after the first of the year to move any tax liability you incur to the next year. You can discuss the commission you’ll pay and what your tax implications might be.
Ask if the company has liquidation specialists who can help you determine if you need to do anything special with your trade. For example, if you own a large block of shares in a small company and you attempt to sell them all at once, you might spook other shareholders who then start selling, causing the price to drop sharply.
Sell Your Shares Online
If you’ve purchased your shares using an online trading platform or one of the various stock apps available, log in to your account and follow the steps for selling your shares. Many platforms offer a toll-free number if you need help making a trade.
You can choose to sell your shares immediately, set a share price that triggers the sale or set a date and time to sell the stocks. You will probably need to pay a fee or commission for the trade, based on the platform you use.
You don’t have to sell all your shares in one trade. If you want to keep an eye on share prices and not commit to dumping all of your shares at once, you can sell blocks of stock. For example, if you have 1,000 shares of a stock, you might sell a block of 250 shares one day or week, 250 more shares a few days later, then the final 500 shares at once.
Read More: The Difference Between Stakes, Shares and Stocks
Call the Company
Companies often do stock buybacks. Call the company that has issued the stock, ask if they are buying back stock, what their purchase price is and how you would conduct the transaction. Depending on the company’s reason for the buyback, you might be able to get a higher price than the current market price per share.
Calculate Your Tax Liability
Make sure you save enough of the money you have leftover after your stock sale to pay any capital gains tax you might have. If you’re not sure, contact a tax advisor to review your sale, gains and potential income tax liability. Based on your income this year and projected income next year, selling one year vs. the other might reduce your tax liability more.
- You must pay taxes on any capital gains (profits) from the sale of your stocks.
Steve Milano has written more than 1,000 pieces of personal finance and frugal living articles for dozens of websites, including Motley Fool, Zacks, Bankrate, Quickbooks, SmartyCents, Knew Money, Don't Waste Your Money and Credit Card Ideas, as well as his own websites.