How To Talk To Your Kids About Tax Loss Selling

It’s a touchy subject but one that must be had.

“But mom/dad, why did you continue dollar cost averaging on your energy positions?”

“Well, son/daughter, we read way too many articles saying this was the bottom in oil and we got caught holding the bag.  Now we have no more money left.”

The S&P 500 has gone negative again for the year this morning, yet your portfolios are down 5-10% if not greater.  There is no sense in denying it by going on Twitter and telling every one how you are “killing the game” this year.  Instead of buying at 3:30pm and selling at 4pm everyday you decided to bottom pick oil at $50, $40, lower.  You thought the biotech gravy train would never end so I’m sure you’ve also endured sizable losses in that sector as well.  Let’s face it, when it is all said and done, energy and biotech has completely ruined your 2015.  You could have been 60% cash and still be down 10% on the year if you owned just 1 or 2 of these toxic names.

So really the only thing that you need to do at this point is sell your losses to save on taxes.  All of those days you made short term capital gains by buying the 3:30 Ramp can be offset by selling your dog shit energy and biotech holdings.

And this of course is going to continue to weigh on these sectors throughout the remainder of 2015.