Tuesday, July 24, 2007

Rough day in the market

I have to be honest and admit something: I would be perfectly okay with a market crash right about now. Since I only have a small amount of money invested, it wouldn't really have much of an impact on me, but it would be a great chance to get in low with my next few contributions. I would be sad that I can't put more into my IRA, but at least I have some of that in the AGG bond fund (for that very reason).

AAV has been down fairly significantly in the last few weeks and it fell about 5% more just today! That doesn't bother me because I'm still making a good return on it. When I get my next paycheck I'll pick up a few more shares.

I still think that, long term, AAV is a good investment. Canada is obviously going to play a bigger and bigger role in the world supply of oil and natural gas (for America in particular). AAV gets about 1/3 of their production from oil and the rest from natural gas. As it turns out, natural gas plays an important role in the extraction process of oil from Canada's oil sands, so it seems pretty safe to assume that demand for natural gas in Canada itself is going to go up dramatically in the next decade. Unless they decide to build some nuclear reactors to provide heat for the extraction process... but doesn't it take like 20 years to build a new plant anyway?

Well, I don't think the market is about to crash. Hopefully I'm not jinxing it!


stealthy said...

lol ouch this hurts no matter how little money I have in AAV... gotta hate to see AAV sing this much in one day. I thought you sold your AAV?

Jon said...

I did, but I bought it back when it went under $14. I guess I forgot to write a post about it. But at least I saved some of my profit. :)

GoldnSilver said...

hey, are you guys trading in your IRA or Roth Ira? So there's no [immediate] tax consequences when you sell?

I am just curious.

I own a very small position in QQQQ in my Roth IRA from back in the days of the dot com boom. I didn't/don't want to sell it, because I can't take a loss against it. And it is a very small position... Why I even bought it in the first place is another story. I think I will write a post about it.

Jon said...

I've got a Roth IRA and also a regular (taxable) account. There are lots of things (like what you mentioned) that have different impacts on IRAs vs. non-IRAs, and I never really thought about them before opening my IRA.

For instance, dividends from foreign stocks often have foreign taxes (like the 15% Canadian tax on AAV's dividends), and they are taken out even if you own them in a tax-free account. Furthermore, you can't deduct those foreign taxes if they occur in an IRA, whereas in a regular account you can. Since I read that, I only keep AAV in my regular account.