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Strategies & Market Trends : Guidance and Visibility -- Ignore unavailable to you. Want to Upgrade?

To: X Y Zebra who wrote (75386)	9/29/2002 10:11:37 PM
From: SusieQ1065	Read Replies (1) \| Respond to of 208838

The talking heads were discussing tax loss selling on Friday. This is an October event because most funds have October year ends. They will add up their winners and losers and decide how much they can sell for a profit to offset the tax loss. In a perfect world they would sell a stock for a profit that had a good run and they felt had topped to offset losses on investments that failed and they sold for a loss. This minimizes the overall taxable event and prevents huge tax loss carry forwards. The problem this year is lack of winners. Who are they going to sell? While this may be a problem on the surface there may be more winners than you think. Looking at a six-year chart as an example MMM was only $70, PG in the $40s, MO $20, JNJ $30, MSFT $25, Dell $10, AMGN $15, BGEN $20, ERTS $20, EBAY $20, ESRX $10, INTU $15, IBM $35, UTX $30, WMT $20, HD $15, QCOM $6. In fund years these prices were last week. With the fertile field of winners there should be lots of selling to offset losers. Unfortunately the majority of these stocks are key components to the major indexes. This means the Dow/Nasdaq may be very susceptible to October tax selling. It is one thing for the mutual funds to tell you they lost 25% more of your money and another thing to realize that it will take years to benefit from those losses on your taxes. Funds trying to escape more investor flight will be trying to mitigate those losses as much as possible. Will there be tax loss selling in October? You can bet on it! ~Optioninvestor.com