Jim Cramer's Investing Rule #2: It's OK to Pay Taxes

Action Alerts Plus portfolio manager and TheStreet's founder Jim Cramer reminds investors that it is OK to pay taxes as he explains the second rule of his 25 Rules of Investing. Watch the video above to learn why you have to come to terms with the Tax Man.
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No one likes to pay taxes, says Jim Cramer, as he explains in his Investing Rule #2.

"But I have long ago made my peace with the tax man," says Cramer.

Cramer has made mistakes and learned from them over his 30+ years of investing. And so he created a list of 25 Rules for Investing that can help you avoid the novice pitfalls that even he fell into on occasion.

Rule 2: It's OK to Pay the Taxes

Too many investors sit on gains because they don't want to take profits and owe taxes.  But you can only push your luck for so long and he uses Macy's (M) - Get Report as an example in the video above.

Folks held onto the stock for too long, trying to avoid the tax hit, only to watch the stock crumble and their gains disappear.

So don't be afraid to pay capital gains tax.  It just means you made money!

But watch the Rule #2 above for more on why you should "stop fearing the tax man; start fearing the loss man."

We'll roll one-rule-a-day for the next 25 days!

Sign up and watch Jim Cramer's 25 Rules For Investing here!