You likely hope the investments you hold will rise in value. Still, you have to be
aware of how capital gains in the value of your investments can trigger a tax bill when you sell the investment. Capital gains are generally the profits you realize when you sell an investment for more than you paid for it, where as capital losses are generally the losses you realize when you sell an investment for less than you paid for it.
When you have a capital gain, you may have to pay capital gains taxes. These tax rates can depend on how long you held the asset. Generally, if you hold an asset for more than a year it’s considered a long-term holding, while investments you sold in a year or less are considered short-term. Generally, the tax rate is higher on a short-term holding.