In January, amid some scorn, I admitted one of my yearly traditions has been to zero out my stock holdings in eTrade at the end of the calendar year, primarily to simplify that April's tax returns. Not having to span investment holdings over multiple years makes tabulating my profits or loss the following year that much easier, and also gives me a chance come January to start over with stocks I believe are primed for a big year. (See: My Empty Stock Drawer)But as has been mentioned here several times, and in every media you prefer to consume, 2008 has been very, very different, and I just couldn't stomach the idea of selling some of the stocks I own at their near-historic lows this time around. While I certainly could use the write-off, instead of clearing the deck as 2008 comes to a close, I am standing pat. Part of me says it's because I'm sure these stocks will eventually rebound, and another part admits it is pure numbness and potentially the equivalent of being in shock. Maybe instead it's post-traumatic stress syndrome.
Of course, holding on to stocks this low doesn't guarantee they won't go even lower. If you had asked me 30, 60 or 90 days ago about some stocks, I'd have remarked they couldn't possibly dip further. But nobody is an expert when it comes to what we are seeing in the financial markets today, and I don't claim to be one at all. I am even lowering my own expectations.
2008 broke a tradition of the financial markets practically making sense, and we're breaking our own tradition as well. We're either going to have a nice bounce in 2009, or we're going down with the ship.