Similarly, professionals, such as those who manage mutual funds, are facing a year-end deadline. Whatever they hold in their portfolios will be reported to investors in January. The point of the window-dressing game is to empty the portfolio of stocks that have performed poorly. It's a tawdry deception meant to make managers look smarter than they are. The stock collapse this year means money managers have more losers to dump.
Window dressing can have the same price-depressing affect on the market as tax selling.
Reasons for optimism All this selling, on the other hand, generates a lot of cash. After the first of the year, money could come flooding back into the market. That could cause a jump in demand that would drive prices up again. Now it's down about 24. Now it's about 19.