Selling into a bear market can make sense if it creates a tax windfall. The U.S. Internal Revenue Code Allows you to use your realized losses (Any declines in value that you lock in by selling your shares) to offset up to $3,000 in ordinary income. *

Let’s say you bought 200 shares of Coca-Cola stock January 2000 for $60 a
shares- a total investment of $12,000. By year end 2002, the stock was down to
$44 a share, or $8,800 for you lot – a loss of $3,200.

You could have done what most people do either whine about
your loss or sweep it under the rug and pretended it never happened. Or you
could have taken control. Before 2002
ended, you could have sold all your Coke shares, locking in the $3,200 loss.
Then, after waiting 31 days to comply with IRS rules, you would buy 200 shares