It's Your Money, Honey

Selling Stock in a Bad Economy

Dear Money Expert: I heard that the one thing everyone can do to get some kind of gain out of this horrible market is to sell some stock at a loss so that you can reap a tax benefit next year. The same person also said you should immediately reinvest that amount - whether back in the market or other investment fund. My question's are: Do you advise this? How much should you sell? Is there a limit? Where do you think the best place to reinvest is?

Money Expert: It is wise to not take your money out of the market so I do agree that if you are going to sell an asset at a loss that you should quickly reinvest. There is no limit to the dollar amount you can do this with.

For portfolios we make a move (before the negatives hit the market) of transferring 10 percent of our Large company stock exposure to cash. We also sold our commodities positions as well as the emerging market bond positions and put them in cash.

Wishing you prosperity and happiness,
Stacy Francis, Betty's Money Expert