The Economy

[J Francho]

LMAO.....good one!

[Siebert Outdoors]

Odd, I'm in it to make money, if I have to pay taxes, so be it.

This is one thing I've never understood. Why can you write off a loss in the market. Its no ones fault but yours for gambling. If I lose in a casino can I write that off? LOL

To me, pay tax on what you make(income tax). If you lose that sucks.

[tyrius.]

OK, I don't understand......why sell low? I learned to buy low and sell high. Selling at a loss doesn't make sense to me. When a stock slips below what I bought in at, I generally buy more of it. To me, that's an opportunity, not a reason to panic and get out. Maybe I'm weird?

If you think that the stock is going to drop further then you can sell everything you have and buy it all back, plus more, at a lower price.

Better be sure that it's going to keep dropping though.

[tyrius.]

If I lose in a casino can I write that off? LOL

To the extent that you have taxable gains then yes you can "write them off". It's not really a write off though. You use the losses to offset the gains that you have from other stocks. The net of the gains and losses is the amount that you're taxed. If your losses are greater than your gains though you don't get to take a credit.

[Root beer]

Tyrius beat me to it. You can indeed write off casino loss. It's a little tricky. By the way, stock market isn't gambling, the derivative market on the other hand is gambling. It how the money flows that distinguish one another. In gambling, both side already has wealth it simply exchanges hand. In the stock market you put in money in hope that money yields a return or create wealth that wasn't there before, particularly with IPOs. Dividends are return of profits and capitals that wasn't there before. That's how I interpret the difference between gambling and investing.

The other reason for allowing loss on capital assets is because government is encouraging investing. They are thinking "hey, if you made a poor decision in investments, we will allow you to deduct a certain amount each year from your taxable income."

[roadwarrior]

Capitulation...

http://www.investopedia.com/terms/c/capitulation.asp#axzz1VQqasUBo

This NEVER occurs going into a recession.

http://money.cnn.com/video/news/2011/08/18/n_gross_pimco_recession.cnnmoney/?source=cnn_bin

http://www.msnbc.msn.com/id/44187526/ns/business/

[Bassn Blvd]

I lost just over 12k since June 30th, 2011.

[NorcalBassin]

My 403b portfolio looks like a terrifying roller coaster ride.

[SirSnookalot]

^^^ I feel your pain.

[Glenn]

You guys need to stop micromanaging your portfolios.

[Root beer]

Two words: Put Options.

[Bassn Blvd]

You guys need to stop micromanaging your portfolios.

Perhaps if I micromanaged my portfolio, I wouldn't have lost $12,400 in a month month and a half.

Question is, how far do I let it go before I freeze it?

[tyrius.]

Perhaps if I micromanaged my portfolio, I wouldn't have lost $12,400 in a month month and a half.

Question is, how far do I let it go before I freeze it?

If you haven't sold then you haven't lost anything. It's too difficult to pick the peaks and valleys so actively trading these big swings will likely result in a worse outcome then just not worrying about the short term changes.

I'm no stock expert though so take my advice with a grain of salt.

[Glenn]

Don't worry about the short-term swings. They're meaningless in the grand scheme of things. All they are is simply headline fodder.

[RoLo]

OK, I don't understand......why sell low? I learned to buy low and sell high. Selling at a loss doesn't make sense to me. When a stock slips below what I bought in at, I generally buy more of it. To me, that's an opportunity, not a reason to panic and get out. Maybe I'm weird?

Price moves in trends, and trends tend to persist.

All trends eventually reverse, but trend reversals

are easier to identify than calling Tops & Bottoms.

Cheap prices typically get cheaper, while high prices typically get higher (e.g. gold).

Words like "High" & "Low" cannot be used without the benefit of hindsight.

I don't think "Buying Down" is weird, but I do think it's dangerous.

In my opinion, “Buying Down” is a form of denial, rather than admit he was wrong,

the investor opts for another roll of the dice.

The “Buy & Hold” approach has ran out of gas on many occasions. If you bought-down

on the heels of the Great Depression, you’d have spent the next 20 years buying down.

You’d either have run out of capital or died waiting. On September 16, 1929,

the S&P-500 Index topped out at $31.90. It didn’t bottom out until June 14, 1949

when the S&P 500 closed at $13.60. The reward for holding steadfast

through that 20-year holding period was a Net Loss of –57.4%.

Going forward, the stock market didn’t reach breakeven until Sep 22, 1954,

when it closed at $32, twenty five years later.

That could never happen again?

Well, it’s already happened again and the venue was Japan.

On December 29, 1989 the Nikkei-225 closed at $38,916.

Today, over 20 years later the Nikkei-225 closed at 10,450,

down 73% from its 1989 level.

By itself, 'Time' cannot substitute for poor timing, because 'Time' is a double-edge sword,

it can heal the wound or intensify the wound. Ironically, the flaws in long-term investing

are most conspicuous over the long term.

Roger

[roadwarrior]

Be careful...The bond market is pricing in a depression...

2yr .02

10yr 1.99

30yr 3.33

http://www.bloomberg.com/markets/rates-bonds/government-bonds/us/