Tired of sitting on the sidelines watching your investment accounts dwindle? It's time to get in the game.

Tired of sitting on the sidelines watching your investment accounts dwindle? It's time to get in the game. SELL NOW (but not for the reason you might think).

There is a silver lining to all of this gloom and doom, market volatility, and yes, even your market losses. Opportunities like these don't come along very often.

If you own taxable accounts with holdings that have declined to values less than your cost basis, consider selling those securities to capture a tax loss. These losses can be used to offset current and future capital gains tax liability. You can also deduct up to $3,000 of losses against your ordinary income.

Stay in the game
Use the proceeds from your sale to purchase a similar type of security (exchange-traded index funds are an excellent choice) so your investment dollars can participate in a market recovery. With history as our guide, we believe that a recovery will come eventually. And when they do, they tend to be swift.

This investment strategy is called "tax loss harvesting" and is a powerful tax planning tool. Get off the sidelines and take advantage! But take care when implementing this strategy. You should consider the tax consequences, trading costs and other factors as you select securities to sell. Seek the counsel of a qualified financial professional to help you.

Some advice regarding your IRAs and retirement plans
When it comes to your tax deferred accounts, there's not much to do but sit on the sidelines, so go ahead, stick your head in the sand.

Behavioral economist George Loewenstein of Carnegie Mellon University coined the term "the ostrich effect" to describe the way investors stick their heads in the sand during lousy markets. Loewenstein explains that knowing for certain that something bad has happened is worse than suspecting that something bad may have happened.

This bird-brained strategy may not be a bad one, as research has shown that the more information investors seek regarding their holdings, the more often they trade. Higher trading frequency has been shown to produce lower returns.

Rather than watching the daily fluctuations of your retirement account balances, monitor your accounts monthly or quarterly and rebalance your portfolio only when your asset allocation policy dictates doing so.