Top of the Morning: Raising cash - Sell or borrow?
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If I have a tax bill coming due soon, should I sell investments to raise cash - potentially realizing taxes and missing out on gains - or should I borrow and pay interest on the loan so that I can keep the portfolio invested? Dan Scansaroli, Head of Global Investment Management M
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4 itemsTop of the Morning: Raising cash - Sell or borrow?
The desk emphasizes the trade-off between selling investments to settle tax obligations and borrowing to maintain investment positions, as highlighted by the UBS commentary. This decision not only involves calculating explicit costs like loan interest but also recognizing opportunity costs linked to potential investment gains. Per the full note [source], this dilemma is especially pertinent during tax season, suggesting that market sentiment might be driven by liquidity concerns related to investment behavior. Traders should monitor how such decisions may prompt underlying shifts in risk appetite or liquidity demand across asset classes.