Thursday, November 17, 2011

Tax Loss Selling Approaches

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I am watching for the effect of tax loss selling this year.  Since the markets have been down since May, it will likely have more of an effect than last year when the markets were strongly higher.  It could significantly dampen any year end rally as it has the effect of depressing prices during the month of December.

Dale also talks about reasons other than tax loss selling for removing stocks from our portfolios.  I sell if the stock breaks the upward trend, especially after it has met my price target.  My price target is based on the earnings per share times the price/earnings ratio that is consistent with the rate the company is growing.  Of course, downward revisions in the earnings estimates could also be a reason for selling.  

What do you use for a sell strategy?  You do have one, right?

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