Benefitting by booking loss.
It sounds crazy that one can be benefitted by booking loss but believe me that booking loss can sometimes be the right strategy to pursue and if executed correctly then it will be going to benefit you. I was hesitating in booking loss for one of the equity share and hoping for price to recover. I observed that share dive at each market downtrend but do not recover as such when market shows an upward movements. I finally decided to sell that share to get my capital to invest in one of the promising stock that is currently trading low. I hoped that when market will show positive movement then my "promising" stock will show higher gains so it is better to buy it.
Source
So, 2 days back, I sold all my holdings in that boring stock for $388 for which I had paid $413. Then I invested this $388 to buy another stock that have sound fundamentals but was trading low due to current market conditions.
So when today market rallied, I saw my $388 reached to $399 but finally settling for $394. Based on the analyst report, I am expecting it to grow to $415 to $450 in 2-3 months. Since it is the PSU (Public Sector Undertaking) stocks, there is high hopes that government budget provisioning might benefit this PSU. Meanwhile if I hold my "boring" stock then it value will be nominally increase by $1 to $389. At current it look like a good decision to made.
Another factor that helped to take this decision is to save tax also. I already booked profits of more then $24 in this current year. So this $24 will be adjusted on my gains and I will save 15% tax on it that will be around $3.6. So in my current situation , I already gain $3.6 + ($394 - $388) -$1 = $8.8 in 2 days that is 2.2% gain 2 days.
Though percentage gain might look insignificant but I am content in getting out of that bad position and putting my investment in something that look more promising for current and upcoming future.
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