The Tax Loss Trade: Time To Cash In?

Decisions, decisions, decisions

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Today I want to check in on the Tax Loss Trade, which we proposed in December just before Christmas, with the follow up here. We are now entering the sell zone. It’s time to make some decisions.

Some background: As the tax year ends in North America, investors sell their badly performing stocks to realise a tax loss to offset against gains elsewhere, and reduce their tax bill.

Because of the selling, companies that have done badly get even more beaten up; however, as the selling dries up in January, the stocks can often rally.

The trade is to buy as tax loss selling climaxes, then flip in January-February as normality resumes. My broker says wait till March, but I think take the profit when it’s there.

So let’s take a look, see how things have worked out and make those decisions.