SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Non-Tech : The Woodshed
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: nspolar who wrote (3890)4/13/2004 9:21:20 PM
From: Little Joe  Read Replies (1) of 60926
 
Received a blurb in my email today and since it is very interesting I thought I would share it.

<The "Income Tax Bounce" is when the market drastically reacts to massive selling then repurchasing of stocks along with new retirement money being put to work. It's a bounce... Like a rubber ball, first the markets head down then they bounce back up. How high up is anybody's guess.

What causes this?

How about tens of millions of investors who need to raise the cash to make a tax payment on April 15th... That money is pulled out of their investment accounts. That means the stock market and other wealth repositories will be drained of a significant percent of cash.

Also the indecision and general mental strife that goes along with writing that big check tends to keep people away from the markets. Volume goes down and what volume there is tends to be selling, so, in general, stocks go down right through the April 15th deadline.

Then... As investors recover from the tax payment cash drain and even some find they pulled out more money than they needed, investors wade back into the market and stocks start to recover.

"Smart investors who understand the "Income Tax Bounce" can jump in at the right time and pick up stocks a near bargain prices,use options to hedge the investment, and possibly make a profit.>

Little joe
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2026 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News