Selling losing stocks now is a smart tax move. Buying them back before January is even smarter.

  • 📰 MarketWatch
  • ⏱ Reading Time:
  • 65 sec. here
  • 3 min. at publisher
  • 📊 Quality Score:
  • News: 29%
  • Publisher: 97%

Ireland News News

Ireland Ireland Latest News,Ireland Ireland Headlines

OPINION: Stocks sold in December tend to bounce back strongly in January, Mark Hulbert writes.

I’m referring to the sale of stocks you’re holding at a loss in order to offset the capital gains you have previously realized so far this year, and on which you will otherwise have to pay tax this coming April.

Many are not aware of this bounce back tendency, and so therefore miss out on the second half of this two-pronged year-end strategy. But it’s quite pronounced, as you can see from the chart below, which reports the average monthly returns in December and January of the trailing year’s worst- and best-performing stocks. To put losing stocks’ rebound in context, consider that on an annualized basis they produce the equivalent of a 55% gain in January.

What if you don’t want spend December out of the stocks you’d otherwise consider selling for tax-loss purposes? The only solution I know of is to find other securities that are highly correlated with them, and to substitute these new ones during the 30-day wash-sale period. To the extent your substitutes perform as well as your original holdings, you won’t be missing out on any gains while nevertheless being able to harvest tax losses.

You won’t always be able to find a security that is as highly correlated as Energy Select Sector SPDR is to Exxon Mobil, but your goal should be to find one with a correlation coefficient of 0.7 of higher. From a statistical point of view, that means you’re finding a security whose gyrations can explain or predict at least half of the movements of your tax loss sale candidate.

 

Thank you for your comment. Your comment will be published after being reviewed.
Please try again later.

must sell when it says out

lmfao but i thought y’all said december was always bullish?

We have summarized this news so that you can read it quickly. If you are interested in the news, you can read the full text here. Read more:

 /  🏆 3. in İE

Ireland Ireland Latest News, Ireland Ireland Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

How A Sleepy Southern Chain Became One Of The Pandemic's Top Performing StocksDillard's, the department store owned by a secretive clan, has hit 50-year highs, far outpacing rivals like Nordstom, Macy's and Kohl's.
Source: Forbes - 🏆 394. / 53 Read more »

How A Sleepy Southern Chain Became One Of The Pandemic's Top Performing StocksDillard's, the department store owned by a secretive clan, has hit 50-year highs, far outpacing rivals like Nordstom, Macy's and Kohl's.
Source: Forbes - 🏆 394. / 53 Read more »

Stocks making the biggest moves premarket: Chewy, Lululemon, Beyond Meat, Peloton & moreThese are the stocks posting the largest moves before the bell. NVAX novavax Novavax $NVAX ‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️♥️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️‼️STRONG BUY NOVAVAX INC.
Source: CNBC - 🏆 12. / 72 Read more »

Stocks close lower on Wall Street as rally momentum coolsA sell-off on Wall Street left stocks broadly lower Thursday, giving back some of the market's gains from a three-day winning streak.
Source: latimes - 🏆 11. / 82 Read more »

How A Sleepy Southern Chain Became One Of The Pandemic's Top Performing StocksDillard's, the department store owned by a secretive clan, has hit 50-year highs, far outpacing rivals like Nordstom, Macy's and Kohl's. “Fifty decades later” is 500 years...
Source: Forbes - 🏆 394. / 53 Read more »

Meme stocks continue to tumble as retail investors digest so much newsGameStop and AMC Entertainment finish week on very sour notes as cloudy earnings, sudden CEO distrust, short-seller investigations, and hot social media... Retail is not selling meme stocks. Stop reporting that we are. We aren’t. Fake news. I already proved that naked shorting exists on at least one stock on Webull using its API, legally, so we don’t need the NFT dividend. And insider sells are a normal thing. We’re good. Suck it
Source: MarketWatch - 🏆 3. / 97 Read more »