Monthly Archive for: ‘August, 2009’

> In my book, Buy and Hold is Dead (AGAIN), the Case for Active Management in Dangerous Markets, I devote an entire chapter to portfolio tax planning. The tax chapter is called, The Tax Tail and the Portfolio Dog. The title refers to an old saying about taxes that basically means that investors shouldn’t let tax considerations outweigh value considerations [...]

>Lately it seems that there’s general agreement that some sort of economic recovery is underway, thanks to the massive doses of financial stimulus that have been unleashed to halt the recession. Now, the debate has shifted to whether or not we will experience a typical post-recession recovery pattern, or whether we will enter a “new normal” of permanently lower levels [...]

> In case you missed it, the Shanghai SE Composite (a capitalization-weighted index that tracks the daily performance of all A and B shares listed on the Shanghai Stock Exchange) entered a bear market in two weeks! From 8/4/09 to 8/19/09, the index fell almost 21% which is the classic measure of a bear market. It has certainly been one [...]

>The mathematics of portfolio declines and recoveries are somewhat counterintuitive. You would think that if your portfolio declines by 50% that you would need the portfolio to rally by 50% to get back to even. But that’s not true at all. The following simple chart shows the relationship between portfolio declines and portfolio recoveries: When you consider how a 50% [...]