Stock Losses

Watching the stock market fall recently is a bit troubling.

Its not surprising since we have a lot of uncertainty in Washington now and that doesn't bode well for business prospects.

To a large extent stocks are more predictive than reactive, so the current sell off represents fear that the economy is headed to a recession.

It might be, we have the trade wars, the divided Government, the deficit, interest rate increases, but generally the economic picture isn't much different than it has been.

However just the chance of a recession will create selling and once it starts it can build on itself for awhile until either it is confirmed or it isn't.

If we were to actually enter a recession, it might be a stimulus to the market as the future would look better than the present.

One of the issues with large sell offs is that many baby boomers are in or near retirement age, and probably without much thought count on the increases in the stock markets we have seen before this year.

To see the amount in their 401k decrease is unsettling and most no longer have the safety of a defined company pension anymore.

If the loss causes you to move your money into something safe, remember you are only right if the sell off continues.  It might but it also can easily reverse itself.

You can lock in losses just like you can lock in profits.

The latter is a much better option.  Sell high, buy low, if you can.