Posted on Nov 30, 2014 in
FOCUS ON FINANCE
Presented by the Hardee Investment Group and RBC Wealth Management –
The annual autumn sale has begun in earnest. Typically, the sale is set up by the three worst months of the year – August through October. Some of the largest declines in the stock market have started in August and ended in October. For an investor, these times can be very unsettling as statement values go down. Fear can cause investors to make poor decisions. Bargains (low prices) generally occur when fear drives prices down.
Fortunately, the next six months are some of the better for stock appreciation. What’s our game plan? First, don’t let declining statement values color your judgement. Use this period to buy the themes: 1) Commodity users – not commodity producers, 2) growth over value and 3) the rebirth of industrial America.
Secondly, begin minimizing your tax bill by taking losses to offset gains. We’ve had several companies bought out this year and will have taxable gains. We start this process beginning mid-November by harvesting losses, which leads to our third point.
Third, the last bargain period of the year occurs from mid-December through year-end. Some of our better buys have occurred at this time of the year and is why I’ve never taken this period off. This is when many investors do their tax loss selling. As stated above, we do ours around Thanksgiving. The year-end tax selling depresses stock prices that are already down as investors sell losers. This tax-induced selling ends December 31st. Once the selling pressure abates, these same stocks can have some very good bounces in January.
The fall can be an unsettling time of year. Learn to take advantage of it for your benefit. “Buying low and selling high” is not as easy as it sounds. For four decades, we’ve been students of market tendencies. We’ll use these techniques to benefit our clients.
We know you have a choice when selecting your financial advisor, but does your financial advisor select tactics and strategies that are in your best interest? Find out what that feels like with the Hardee Investment Group. We look forward to serving you and your family, always keeping in mind to do what’s in the client’s best interest.
This article provided by H. H. “Will” Hardee, AWM of the Hardee Investment Group and a Financial Advisor and Senior Vice President at RBC Wealth Management in Houston, and was prepared by or in cooperation with RBC Wealth Management. The information included in this article is not intended to be used as the primary basis for making investment decisions nor should it be construed as a recommendation to buy or sell any specific security. RBC Wealth Management does not endorse this organization or publication. Consult your investment professional for additional information and guidance. RBC Wealth Management does not provide tax or legal advice. RBC Wealth Management, a division of RBC Capital Markets Corporation, Member NYSE/FINRA/SIPC.
