What the experts say

Know when to fold ’em; Seasonality of housing; Standing up to the airlines

Know when to fold ’em

A buy-and-hold strategy has its virtues, but sometimes the best decision is to “stare defeat in the face,” said John Waggoner in USA Today. “If you own stocks or funds with above-average risk, selling is a better option than holding through catastrophic losses, which can lead to the permanent destruction of wealth.” Besides, if the investments you own are in a taxable account, there can often be a benefit to selling: “You can use your losses to offset any amount of long-term capital gains.” Moreover, any losses you don’t take this year can be carried over to your 2009 tax return. And don’t worry—“if you’re convinced that your loser will someday become a winner, you can buy shares in the company again, though you must wait 30 days.” Buy back those shares any sooner, and the IRS won’t let you use the deduction.

Seasonality of housing

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Everybody knows that home prices surge in the summer and stagnate in the winter, said Tim Harford in Slate.com. But why? If home prices increase in the summer, shouldn’t buyers just wait until winter to go house hunting? According to preliminary research from the London School of Economics, the reason they don’t do so has nothing to do with weather, school, or summer weddings. Rather, because sellers believe that houses fetch more in the summer, they prefer to list them at that time. More houses on the market means that “buyers are more likely to find the exact house they want and so are willing to pay more.” So they, too, wait until summer to move. It becomes a “self-reinforcing process.” If you want a cheaper house, buy in the winter. “But remember, a cheaper house is not necessarily a better deal.”

Standing up to the airlines

Last February, Mitchell Berns was ready to board a Delta flight from Las Vegas to New York when he heard the dreaded phrase, “weather-related cancellation” said Telis Demos in Fortune. Normally, weather delays put fliers at the mercy of the airlines. “Not this time,” Berns determined. After noticing that other planes were still flying, he asked Delta to rebook him on another carrier. The airline balked, so Berns—a securities litigator—paid $938 for a JetBlue flight that departed as scheduled. When he got back to the East Coast, Berns “did what any consumer with $15” can do in New York City: He filed a small-claims suit. Delta didn’t show up at court, and Berns won by default. “Don’t let them bully you with bogus cancellations,” says Berns, who spent a total of four hours on the case. He’d do it again in a heartbeat. “That’s how good it felt.”

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