After Xmas rally ... better time to rebalance?

[NW-Bound]

Quote:

Originally Posted by Lsbcal Well that other investor is clearly on the wrong side of my trade.

I wish I could say that about my trading counterpart in my recent equity trades. Whatever I bought from him recently tanked. Darn!

On the other hand, I cleaned out the other side of my option trades. All of the covered call options I sold to him ended up worthless.

Sadly for me, my total gain on the options is only 1/6 of the total loss on the stocks.

By the way, I think the other side of my option trades is a computer belonging to a market maker(s). It constantly adjusts the option pricing to follow the stock current value, using Black-Scholes model or something such.

PS. Well, it's probably the same computer that sold me stocks, while buying the options from me. Net, it still wins. Darn!

[audreyh1]

Quote:

Originally Posted by LOL! Tax loss harvesting seems to be all the rage over at bogleheads.org, but the two major transactions are Total US Stock Market exchanged to S&P500 or vice versa and Total International Stock Market exchanged to FTSE All-world ex-US stock market or vice versa. That is, there is zero net selling of equities from tax loss harvesting and thus no applied down pressure. As for post Xmas market behavior, no one can predict the future, except I will predict that in the US at some point a federal budget bill will be signed by a president.

Quote:

Originally Posted by Lsbcal Since this week was unexpectedly bad (by yours truly expectations), I guess there is more impetus for tax loss harvesting. That is, not just flipping positions but selling and not reinvesting in something else. Sell a winner, and sell a loser too.

It’s true that tax loss harvesting should be net neutral, however I suspect quite a few folks wait for more selling to be done to reinvest, or even choose spot sit out the 30 day wash sale period. The disciplined bogleheads folks are probably a minority.

[Winemaker]

Quote:

Originally Posted by LOL! ...... except I will predict that in the US at some point a federal budget bill will be signed by a president.

This is part of the problem, we keep running on continuing resolutions, hence, the threat of political shutdowns.

[Lsbcal]

If one looks at 2 declines that did not have a recession scenario, it took maybe 3 to 4 months before the market really started climbing back. So maybe I've been too focused on minutiae in the OP. Maybe patience is in order?

Here are some snippets showing the 1962 and 1987 SP500 declines: