Another solution to the dead money problem that my AIM partner has used sucessfully several times is as follows.
Sell 50% of the shares (or most recent IW percentage) to raise the necessary cash to resume trading. Adjust PC in Newport to the NEW value of the shares after the sale.
Remember, we have dug ourselves into what may well turn out to be a VERY deep hole, one that takes perhaps YEARS, if ever, to get out of.
Tax losses are sometimes nice to have. Granted $3,000 to offset other income is nearly as ridiculous as $2,000 limits for an IRA. Still, the excess over $3,000 can be carried forward to future years.
This is a more drastic solution than the one that TomV proposed. The issue I have with Tom's proposal is that there is no provision to buy more shares if prices continue to fall. Tom's solution will shorten the waiting time to a sale, but not as much as ours will. The question we must answer before taking either Tom's solution or this one, is how realistic is it that we will see a 20% rise in price to trigger a trade? In many cases, we are afflicted with wishful thinking, believing that the future is MUCH brighter than it actual will be.
This exercise has only been carried out in retirement accounts, so we have not had the benefit of the taxable income reduction.
Robert |
