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Cedar Rapids Gazette (Newspaper) - December 17, 1974, Cedar Rapids, Iowa 4 The Cedar Rapids Gaiette: Tues., Dec. 17, 1974 I he Investor's (guide By Sun Skilsky There is still time left hi 1974 in which to dccido whether you arc going to have Uncle Sam share some of the stock market losses which have been so plentiful this year. Uncle Sam's share of your losses, of course, will depend upon your income tax bracket. It is by using these losses to re- duce your tax bill the one due next April 15 that you can shift some of the loss to Washington. I'm a firm believer in doing so, and therefore want to devote a couple of columns to the idea of "making the best of a bad bargain." I appreciate that taking securities loss- es always involves acute distress. But it is a fact of investment life and there is no way to sweep it under the rug. SHULSKY The novice investor generally shields himself from this unpleasant fact by argu- ing that since he still holds the stock he bought 20 points higher, he has sustained no loss. only a paper That's being as realistic as a bald man, carrying a picture of his high school head of hair, going into the barbership for a shampoo. It just "ain't there any more." If you bought 100 shares at 35 and the stock is now selling at 20, you are NOW out plus commissions, and no amount of wishful thinking can disguise that fact. The loss may be in a stock you should have never bought in the first place. Or it may be in a stock which once made sense but no longer suits your investment needs. Or it may even be a stock you'd like to continue owning, and should. It seems to me there is little argument about taking such losses in tune to reduce your income tax bill. By "in of course, is meant a sale anytime before the close of the stock market on Dec. 31. And a sale it must be. Far too many investors think if they can continue to hold shares which have fallen in price and still claim a tax loss. Not so. You may have bought stock in a "pie-in-the-sky" nursing home, or restaurant or leisure products company when you felt you could afford to take the risk. And it didn't work out. Now is the time to face that fact. Not only can the year-end tax loss maneuver help you reduce the income tax bite but it can serve as a period of much-needed portfolio review, prompted by the fact that if admitting one's mistakes is in itself a virtue, the good to be derived can also spill over in to an actual cash savings. Of course, the loss may be in an investment grade stock which did suit your needs when you bought it and, as a matter of fact, still does. Many fine motor, utility, oil stocks, for example, remain investment grade, still pay generous dividends, even at lower market prices. Even so, if the tax loss can be helpful, consideration should be given to taking that loss now even if you intend to (and, perhaps, should) repurchase the stock after the required 31-day waiting in- terval. Or if, in order to retain an uninterrupted investment, you buy an additional amount of the stock now and sell the shares on which you have a loss 31 days later BUT before Dec. 31. (This maneuver will be discussed Wednesday.) The main point to be made here is that NOW is the time for a candid review of the loss securities you hold. Try to be honest with yourself in answering: Was this stock a mistake in the first place? What really are its chances of ever coming back? Even if I still like the stock and am hopeful, shouldn't I take the tax loss by either buying more stock now and selling out the original block aft- er 31 days or selling now and buying back after 31 days? Has my investment position changed (now retired; in need of current income) so that this stock no longer belongs in my portfolio even though it may recover, in price in the 1980s? It is a custom to adopt constructive resolutions for the New Year. In investing, it is almost obligatory to take a long, hard, realistic look at your portfolio losses now before the year-end in time to recoup some (if the money the stock market has taken away from you in recent months and years Wednesday: Htw to flgire tax Itsses IB seciriUes. Mr. Shulskv welcomes written questions, but he will be oble to provide onswers only through the column. For Information on Dlcoso Include he Gazette. The bidding has been: West North East 17 South 1 INT. 1'ass Pass By Oswald fc James Jaceby There are two ways to handle bad breaks. One is to let them beat you; the other is to guard against them. Frequently you can take care of the matter by paying attention at trick one. You cover West's jack of diamonds with the queen. People have been known to lead away from kings; but this time East produces the king. If NORTH (D) V K972 Q7 4 A J1054 WEST EAST 410654 4AQ83 Vl05 4 J10943 K852 83 SOUTH V AQJ83 i A6 Easl-Wcsl vulnerable West North East Pass Pass Pass Pass Pass Pass Opening South Yen, South, hold: 4 3 A Q 10 8 6 K ,1 4 Q 3 Whal do you do now? Bid four clubs. Your partner appears to be starting a slam try in clubs. TODAY'S QUESTION He continues to four spades. What do you do now? Answer Tomorrow you are careless, you take your ace right away. Later on you lose the club finesse; East puts his partner in with a diamond and West leads a spade. You think, but thought does you no good. East holds both the ace and queen and you wind up one in the soup. Now look how pleasant life is if you do a little thinking at trick one. You note that the king of diamonds has shown up in the wrong hand. It is possi- ble that the same wrong hand holds the ace-queen of spades and king of clubs. Now you let East hold that first trick. He can do anything he wants at this point. The same goes for later on when he takes his king of clubs, but whatever he does he will be helpless to put West on lead. Now you will lose just one spade, not two. SHOP MONDAY TIIKU KHWAY '111 WW. 'ill everyone loves gifts from... A CHRISTMAS SHOPPING TRADITION IN EASTERN IOWA SINCE 1890 Sale! Appliance Gifts specially priced for savings ust in time for Christmas Oster 5-Quart Slow-Fast Cooker a regular 29.95 value 23 Versatile cooker roasts, steams, bakes, stews, deep fries or simmers. Controlled heat fur slow or fast cooking. Buffet styl- ing cook and serve in the same pot. No-stick, no-scour finish with detachable element for completely immersible washing. ARMSTRONG APPLIANCES FOURTH FLOOR Osterizer Blender regularly 28.95, now 21 Versatile 10-speed Osterizer now at special savings for Christmas. Re- ally great for holiday entertaining. Avocado or gold, (model ARMSTRONG SMALL APPLIANCES FOURTH FLOOR Sunbeam Mixmaster model 702-81 now at this special price 28 88 Give her the famous Sunbeam Mixmaster a truly great gift one she'll use so many ways. Now priced for saving, model 702-81 features 2 heat-resistant glass bowls and automatic beater ejector. Removes from stand easily. White only. ARMSTRONG SMALL APPLIANCES-FOURTH FLOOR model 5233 Toastmaster Broiler-Oven usually 27.95, now 24 Deluxe "Flip Over" Oven-Broiler has continuous cleaning feature with automatic thermostat. Sleek porcejain enamel finish. Toastmaster 2-Slice Toaster a usual 18.98 value 13 Exceptional value! Famous toast- master toaster has 2 elements per slot for even browning. Superflex timer toasts just as you prefer. ARMSTRONG SMALL APPLIANCES FOURTH FLOOR West Bend Cook Sets 7-PIECE SET AT VKRY SPECIAL SAVINGS our special low 1-qt. Saucepan Saucepan Dutch Oven 10" Skillet ii (lovers Attractive cookware set has even heating steel core, apple green or nut- meg design on white por- celain exterior. Heat- proof handles. Model 16- B3. West Bend's Electric Frypan 14" usually I She'll love this attractive buffet style frypan by West Bend. High dome lid makes it roomy enough for roasts; automatic heat control. Completely immersible. Teflon in- lenor. Avocado, gold or paprika. ARMSTRONG SMALL APPLIANCES-FOURTH FLOOR
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