In December the holiday season of the year influences the stocks market. Similar to your life, the end of the year means tax season and people begin to consider what gains and losses have been made through out the year. The tax ability to use losses to offset capital gains at some point shares are sold will be done. The companies which have not done as well are sold, if you still love them, you can always buy them back in the new year.

The end of the December is also end of the quarter for the mutual fund industry. The companies all need to dress up their portfolios for the marketing process in January and February for tax season. Some companies benefit from having done well, in the price range of success and fund companies buy them to show their investors they own the shares.

The other thing you as an investor need to do is examine your portfolio for two things: one if your investments were correct and the market has agreed with you sending prices higher, do you take profits? When do you sell or do you hold? Part of the answer is does the stock holding constitute an increasing percentage of your total holdings. For example if you owned the FANG stocks and they are now 50% higher, they will constitute for example 30% of your holdings. Looking at your risk tolerance do you want 30% in those stocks or do your look at alternatives. Do your homework before you shift.

If you own mutual funds, some of them will be actively managed or have higher MER than index funds. Since you own them, that was a good decision, but at some point you need to look at the MER or management expense you are paying and the alternatives in the market. After December a portion if the funds are rear backed commissions will be available to sell, you may want to find out how much you can sell and what fees the mutual fund company charges. If you own a mutual fund company it is generally better to sell after December than before because the fund company will distribute its dividends in December. After distribution the price falls. One suggestion if you are considering changing for either lower MER fees is to change the fund from reinvest of interest and dividends to cash in the account. When the amount builds up you can invest in lower MER or individual stocks.

Linking to dividend paying companies, although the reason you buy them is for their dividends, there are normal cycles in the stock market for your to examine the portfolio to ensure the tax system and stock market works for you. Part of your investment strategy is to link into the institutional aspect of the market and make it work for you

There are more questions than answers, till next time – to raising questions.