Silver Linings in the stock market

The director and screenwriter David O. Russell earned eight Oscar nominations for its film Silver Linings Playbook back in 2012, while Jennifer Lawrence took home one of these coveted statuettes.

“If clouds are blocking the sun, there will always be a silver lining that reminds me to keep on trying.”


Finding the positive side, or the strength to move on, in front of adversity talks a lot about someone’s courage.

On the other hand, it may be the perfect chance to put our “plan b” in motion.

The stock market, through history, has shown us that it has been able to reward patient investors. However, this road is far from being a walk on the park.

Sometimes the stock market posts strong drawdowns, testing investors’ faith in the market, and on a couple of occasions even their faith in the global economic model.

What to do this time around?

For investors who enjoy the fortune of having liquidity and a long-time horizon for their investments, they have everything on their side. The occasions in which the market shows adjustments, or enters into bearish territory, are usually ideal to put your money to work.

Investors who maintain a broad time horizon, but lack additional liquidity, may well take advantage of these windows for tax loss harvesting. Incurring in capital gains (selling shares with profits) is considered taxable income. Likewise, selling shares below their purchase price will generate tax losses, which may offset the accrued obligations throughout the fiscal year.

In this sense, there are people who believe that recent declines in the stock market are due to fiscal strategies of a large number of participants at the global level.

Whatever your situation, it is important to keep in mind that one of the best tips is “not to stress but take matters on your own hands”, and as the English collective of comedians Monty Python would sing: “Always Look on the Bright Side of Life”.

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