For some peculiar reason , perhaps a socialist envy psychology to punish “speculators” gains on stocks that are held for at least one year pay half the tax of traders who make short term profits. This is the reason that many traders hold their investments for at least a one year time period.
American s with a stock portfolio , who are presently in a loss situation , might well now consider purchasing enough additional stocks to match their original purchases and investments . Wait 31 days as per the tax laws “wash sale” provisions.
As an example say for example that an American owns one hundred shares of stock that bought at 10 dollars has dropped to a value of seven 7 dollars. This investor could purchase an additional 100 shares at the new seven dollar price , wait 31 days and then specify to the broker the sale of the original 100 shares . The net result is that the American investor now still has 100 shares, but could have a valuable tax loss of $ 300 that he could apply against profits elsewhere in the market.
This is both an acceptable accounting and legal maneuver to be discussed with the American investor’s accountant or other financial advisor.
It is most amazing the mentality of those types who attempt to punish forex traders - who they dislike as parasites or locusts. Foreign currency is not only the lifeblood of international trade and commerce but also the lifeblood and most valued of commodities in most third world countries. We in the developed world of the E.U. , and the Nafta countries of Mexico , the US and Canada may take foreign currency and currencies for granted - it is a standard part of our daily lives. We live with Mexican , Argentinian produce int he winter, we may drive European , Japanese or Korean cars. Many of our standard and integral goods now come from China , even if marked “made in the USA”.
Yet the lifeblood of all countries is foreign currency. No country now ( with the exception of North Korea ) is an island. And yet even North Korea depends on its survival at the moment, like it or not , on international handouts , indeed “welfare”. No country will sell to you the goods you want or need on unqualified paper. You need some type of collateral , some recognized good or a good representing that substance of collateral. That good is currency or a basket of foreign currencies. It does not matter that the products needed may be essential for investments for further growth , development of even feeding of a population. It is cash on the barrel so to speak.
Foreign currency and foreign currency trading are as old as mankind itself. I have this , or you have that and I want that. I will trade or promise you this.
Forex trading serves to constantly value those financial assets - what are they worth , what is their current and real valuations. Is the currency of value ? Is it desired ? Is it liquid at the moment ? These are all questions that Forex trading serves to answer and validate
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