This is probably a dumb question but I am pretty new to stocks in general and trying to wrap my head around capital gains tax and how to maybe offset it.
For almost six years, I've been splitting my retirement contributions into 401k and our company stock employee purchase program assuming the discount would offset poor performance of the stock (spoiler, it did not).
I am no longer buying into the EPP and moved that contribution to my 401k, but now I need to figure out what to do with my company stock.
I want to move the bulk of it into an index fund and keep a small portion available to try out single stocks. Not looking to gamble with day trading but would maybe like some flexibility if I wanted to sell riskier positions, I am aware of the higher tax rate on short term capital gains and would ideally hold on to anything for more than a year.
I have about $7,000 in unrealized losses. Does it make sense to hold on to some to sell in the future and offset capital gains taxes? Or should I dump it all and move it to index funds like I mentioned. The stock does pay dividends but I don't think they are keeping up with the value loss so far. I also realistically don't see it dropping any more if at all.
Just seems like a waste to lose all the negative offset if I were to have any capital gains tax to cover. I realize on paper holding it is opportunity loss as well though so I'm not sure that logic is sound.
The stock is MMM if that matters.
Edit: bonus question, for the index funds, should I go with something safe like s&p500 or are there others that would be good? I can afford a little bit of risk as my 401k is funded pretty well already.
