Ask The Compound How to Recover From a 50% Loss
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Nov 19, 2025 Bill Sweet, CFO at Ritholtz Wealth Management, joins to tackle the aftermath of significant portfolio losses. He shares practical advice on selling stocks without incurring hefty taxes, discusses the merits of Roth 401(k) contributions, and explains tax-aware exit strategies. Bill also compares HELOCs and cash-out refinances for renovations, emphasizing how 401(k)s still offer unparalleled tax benefits. Gain insights on maximizing retirement contributions and explore HSA strategies for tax-advantaged growth!
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Intervene Early With Margin Traders
- If someone is speculating with margin, intervene and get them out before a margin call.
- Hand control to an advisor or put the portfolio on autopilot to stop repeated reckless decisions.
MicroStrategy Margin Disaster Example
- The caller described a brother who YOLO'd into MicroStrategy on margin and is now down 50% with a house purchase looming.
- Ben and Duncan used the example to illustrate intervention needs and how margin amplifies risk.
Big Returns Hide Brutal Drawdowns
- High volatility stocks can still produce huge long-term returns despite repeated deep drawdowns.
- But buying near peaks and adding margin can turn those drawdowns into personal disaster.