Be the first to like this
End Of The Year Stock Trading
Interested in profits from end of the year stock trading? Will the threats of a so called Fiscal Cliff, increased tax rates, or general global unrest drive the prices of stocks at year end? Will stock traders simply go home for the holiday season, resulting in a thinly traded market? How about unrest in the Middle East? There are lots of issues that could drive stock prices in end of the year stock trading. Are there any especially profitable day trading strategies for those looking for profits in end of the year stock trading? First of all let us look at taxes and what investors might do.
End of the Year Stock Trading and the Fiscal Cliff
Fiscal Cliff is a political term. It refers to the sum total of possible results of letting Bush era tax cuts expire, cutting Federal spending, and an expanding budget deficit. In fact, it is not really a cliff. If congress and the president cannot come to an agreement of the budget going forward previously enacted tax cuts will expire and a set of gradual but significant budget cuts will come into place. The result of inaction by the government would be another recession with higher unemployment and higher taxes for all. Investors who expect to be paying higher taxes next year may choose to take capital gains this year. Investors who believe that the stock market will suffer in the event of the so called fiscal cliff may exit their stock positions before year end simply to avoid losses. While the world of investors puzzles over the outcome of budget negotiations, traders take advantage of swing in market sentiments and trade to profits in end of the year stock trading.
Mutual Funds, Money Managers, and Hedge Funds
When the end of the year approaches, those who manage other people’s money often seek to improve yearly profits by selling stocks that an otherwise prudent investor would hold on to. Their actions are not based on sound fundamental or technical analysis. Their actions are based on short term self interest. Traders can take advantage of this yearly occurrence by purchasing when these big boys sell and selling after the beginning of the year when the same funds return to the market to buy the stocks that they just sold before the holidays.
The World Does Not Stand Still Because of Holidays in North America
World events often shape the stock market. When civil war rages in the Middle East, China threatens military action in the South China Sea, and the ever present European debt dilemma drags on, smart traders will find opportunities for profits even when many of their peers have gone home for well deserved rest. A virtue of online stock trading is that one can trade stocks, commodities, and currencies as the turkey is thawing or while the cranberry sauce is simmering to perfection.