Techcrunch had good coverage of Wikinvest’s launch of embeddable, annotate-able, wiki-able charts.  Wikinvest, which like it sounds, is a wiki focused on building out user-generated company and stock information.  Now, the site has developed charts that can be annotated and embedded into websites and blogs.

If you check out Apple’s chart (sorry wordpress.com doesn’t allow posting of javascript) and click on ‘B’, you’ll see that on June 10th, Apple reported a new iPhone with GPS and 3G capabilities, better battery life and improved audio quality.

Or, on Amgen’s chart, you can click on ‘L’ and see someone’s explanation for a continued slide in the stock price (which he/she attributed to a potential safety risk for Aranesp)

Google Finance has charts that attempt to pair up news events with movements in the stock price.  While it’s a really interesting cause-effect, Google Finance unfortunately doesn’t capture the news or information that is affecting stock price movement.  I attribute this to 2 reasons: 1) Sometimes it’s just impossible to explain price movement (sorry, financial commentators) 2) Google’s news set is in some cases unexplicable weird and picks up stories that seemingly have little impact.

Anyway, these charts powered by wikinvest are interesting for financial bloggers and may ultimately do a good job of providing numerous opinions as to what’s affecting individualk stocks at any given moment.  It would be very interesting for someone to look into the accuracy of wikinvest’s annotated charts and provide some metrics at some point (if this is possible to track).  If anything, these charts improve on Google’s charts (which I happen to like) by overlaying wiki-like UGC on top of stock charts.

Very interesting post over on grownchildren.net (what a great title, btw).  The gist of the post is the importance of having “The Chat” with your kids.  I’m squimish when it comes to discussing adolescence but for some reason, I find financial discussions to be easier.  Not so for most people.

So, it got me thinking about 3 important reasons to discuss finances with kids:

1. logistics: it happens that parents pass away without ever telling children where their assets are located.  In my job as a financial planner, I see this occur with more frequency than you’d expect.  Children spend the time post-mortem looking for and tracking down assets.  Bequeath the assets or give them away but don’t lose them.  Keep your kids in the loop.
2. ethical inheritance: use these discussions to impart your values on your children.  Let them know why you worked so hard all your life.  Explain to them how you manage the work/life conundrum.  These discussions, however awkward, mean a lot to your children, while you’re around and after.  AS Penny mentioned in the article linked to above, it’s also a great forum to explain divergence in inheritances between family members.  I remember my grandfather, OBM, showing me his mother’s will which effectively left nothing to him and all to his siblings because he had done well in business.  He understood what he mother meant by her actions and in fact, respected her for such decisions.
3. wealth transfer: how frequently we see new clients coming into money for the first time in their lives while in their late 50s and 60s.  Their parents lived to a ripe age and left money for their middle-aged children.  Frequently, as we see the baby boomers retire, this requires the children receiving inheritance to learn basic asset management skills and/or shop around for an advisor.  The sooner the children are brought into the circle of trust, the sooner and quicker they can start scaling the knowledge curve required to manage money responsibly.

With the continued weakness in global financial markets there is a good chance that even though the value of your portfolio has dropped, you still maybe able to profit. As the old saying goes, there are only two certainties in life: death and taxes. While no one can say they have solved the certainty of death, there are ways to make your portfolio more tax efficient, and thus help lower your tax bill.

When reviewing prospective client portfolios, especially in the current market environment, every now and then we come upon a stock that is trading at a lower price than it was acquired at. When I advise the client to sell the stock and at least use the loss to offset other gains that have been generated in the portfolio, I am often met with a firm NO! The client says that he believes that the stock will go back up and he wants top wait to sell it. The are two faults with this answer. First, the stock hasn’t been a stellar performer until this point, what is to make you think that it will start going up. Secondly, there may be another way to profit from the poorly performing stock.

Tax-Loss Selling

When one decides to sell the positions at a loss in the portfolio, the term used is tax-loss selling. It’s a process of selling securities at a loss to offset a capital-gains tax liability. It is typically used to limit the recognition of short-term capital gains, which are normally taxed at higher federal income-tax rates than long-term capital gains.

Though they may not realize it, for many investors, tax -loss selling may be the most important way to reduce your tax bill. If done correctly, it can save you money and help you diversify your portfolio in ways you may not have considered.   For example, Let’s say you have a gain in Stock A and you decide to sell it. You will be taxed on that gain in full. But if you have a loss in Stock B and you actualize it by selling, you can use the amount of the loss and offset it against the gain, thus, drastically reducing your taxes owed. You wont be able to recover the whole loss you suffer but it certainly cushions the blow.

Why wait

It’s customary for both professional money managers and investment advisors to wait until the end of the year to start selling their losing stocks. But there are no hard and fast rules as to this. Personally, I like to take advantage of downturns in the market, like we have now, to review clients’ portfolio and advise on taking losses. Keep in mind one of the golden rules of investing, to ride your winners. Some of the most successful investment strategies call for investors to hold on to their good performing stocks and sell the laggards, because chances are there is a good reason that they are lagging. After what we have already mentioned, there is and added value of selling the laggards, you get to use those losses to offset the gains you may have. So not only do you make your portfolio current, by holding only the good positions, but you can benefit financially as well by realizing the losses.

Be Careful

There is a rule in the US, called the Wash-sale rule, where the IRS disallows a loss deduction from the sale of a security if a ‘substantially identical security’ was purchased within 30 days before or after the sale. Let’s say that you bought 100 shares of General Electric March 1st and then sold 100 shares of GE on March 15 at a loss, the loss deduction would not be allowed .The wash-sale rule is designed to prevent investors from making trades for the sole purpose of avoiding taxes.

Speak with The Professionals

It’s important to speak with your accountant before implementing this tax loss strategy. Many times your accountant will work closely with your investment advisor in order to best serve your needs. The accountant will also be knowledgeable about any local tax implications, and can help you plan accordingly.