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Consider Taking Tax Losses Now – Beat The Year-End Bounce Rush

Recent stock market volatility has resulted in portfolio losers. NOW is the time to consider tax-loss selling to beat the year-end bounce rush. There are several questions to ask when considering taking a stock tax loss. With all the volatility in the stock market this year, many investors probably find themselves holding some stocks in which they have sizable losses. By selling those losers and realizing those losses, you can use the losses to offset taxable gains that you may have realized during the year. Most individual investors think about this strategy in December, which means that this tax-loss selling could push the price of some of these stocks even lower. This means that you probably don’t want to be selling your losers then, and may in fact want to consider buying some of these beaten down stocks to take advantage of this tax-generated downward pressure that goes away on January first. I’ll discuss this in more detail in the December issue of my investment newsletter . Moreover, under the U.S. tax code you can buy a stock back 31 days or more after selling and still recognize the loss. (If you sell in 30 days or less, the IRS will not allow the loss). This way you can take the tax loss and still participate if the stock eventually rebounds. When considering taking a tax loss in a particular stock, there are several questions you need to ask yourself: “Do I really want to own this stock anymore?” If not, you should just sell it and move on to other stocks with better gain potential. If you do want to own the stock for the long haul, there are other considerations: “How likely it is to rebound sharply in the next 30 days?” If you think the likelihood is high, you probably should not take the tax loss. Similarly, if you have a sizable position, you need to consider whether there is enough trading volume in the stock to get out and then back in 31 days later without significantly affecting the stock price. If you are concerned about the volume in the stock, it may be better to look elsewhere for your losses. Read more of my most recent investing advice and turnaround stock picks . Share this article with a colleague

Trans-Pacific Partnership Deal: Time For Vietnam ETF?

It looks like time has come for Vietnam to disentangle from the heavy reliance on China as a trading partner. The recently enacted Trans-Pacific Partnership (TPP) trade pact, reached after more than five years of negotiations between the member nations, will make Vietnamese goods reach the global market. TPP is the biggest trade agreement in history aimed at reducing tariffs and setting common trading standards for the 12 Pacific Rim nations, including the U.S., Canada, Japan, Australia, Brunei, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. According to Vu Huy Hoang , Vietnamese Minister of Industry and Trade, TPP will enhance Vietnam’s GDP by $23.5 billion in 2020 and $33.5 billion in 2025. In addition, it will boost the country’s exports by $68 billion in 2025. Currently, TPP member nations represent about 40% of global GDP and 30% of global trade. The deal will open up trading avenues for key export products of Vietnam such as textile, garment, footwear, and seafood in broader market such as the U.S., Japan, and Canada due to their ultra low import tariffs. So far, Vietnam’s trade balance was heavily biased toward China. In the first nine months of the year, China remained the country’s largest trade partner with trade revenues of approximately $50 billion, per Vietnam’s General Statistics Office. However, Vietnam is experiencing weakening demand from China due to its economic slowdown. Therefore, the deal comes at a perfect time. The deal is yet to be ratified by lawmakers in member countries. It is expected to easily pass through Vietnam’s legislature due to its favorable impact on the economy. Vietnam Economy Vietnam’s economy has already been benefiting from low energy costs and very low inflation. Last month, inflation dipped to zero for the first time ever, as per General Statistics Office. Average price gains were less than 1% in contrast to a five-year average of more than 9% till 2014. Lower energy costs led to a 29% rise in new businesses to 68,347 units in the first nine months of the year. Inexpensive labor and devaluation of the Vietnamese dong for the third time in a year by the country’s central bank have also been boosting the country’s exports and attracting foreign investments. Bloomberg data showed that the country’s exports went up 9.6% year over year to $120.7 billion in the first nine months of the year. In the same period, pledged foreign investment soared 53.4% while disbursed foreign investment rose 8.4% from year-ago levels. General Statistics Office estimates revealed that Vietnam’s GDP grew at the fastest pace of 6.3% since 2008 during the first half of the year. The growth is higher than 5.2% in the same period last year and 4.9% in 2013. The government is on track to reach the four-year high GDP growth of 6.2% this year. According to Asian Development Bank, Vietnam is likely to record the fastest growth in 2015 among the five major Southeast Asian countries tracked by the bank. Thanks goes largely to burgeoning private spending, export-led growth and increasing flow of foreign direct investment. Buoyed by the growth potential, World Bank has predicted that Vietnam’s extreme poverty rate (people living under the income level of $1.9 per day) will decrease to only 1% in 2017 from 2.8% in 2012. Moreover, people living under the income level of $3.1 per day are expected to decline to 6.7% in 2017 from 12.3% in 2012. ETF in Focus The TPP deal as well as the recent spate of optimistic economic data definitely turns our attention to the sole ETF focused on Vietnam (nearly 80%), Market Vectors Vietnam ETF (NYSEARCA: VNM ). VNM seeks to match the performance and yield of the Market Vectors Vietnam Index, measuring the performance of stocks listed in the Vietnamese stock index which generate at least 50% of their revenues from within the Vietnamese economy. The ETF holds 32 stocks, mostly from the financial sector (44%), followed by energy (16.3%) and consumer staples (14%). Its top three holdings include Vincom, Bank for Foreign Trade of Vietnam and Saigon Thuong Tin Commercial. The fund has amassed $425 million in assets and trades in a volume of 450,000 shares per day. It charges 76 bps in fees and returned about 8% in the last one month. Original Post