This strategy is particularly intense during the during bear market years as investors and portfolio managers lock in capital losses for the current trading year. A portfolio manager will engage in tax loss selling to ensure the overall portfolio does not attract a taxable gain in the event of a small per cent of profitable positions.
Important Dates for 2011
Canadian exchanges are closed Dec 26 & 27, 2011. In order to have a sale transaction settle within the 2011 calendar year in
, sell orders must be filled on Dec 23rd 2011 for Canadian exchanges. The NYSE is open on the 27th which would be last day for selling in order to settle on Dec 30th. Canada
Any issuer sold cannot be bought back within 30 days, or it will not count as a capital loss. Consider buying a similar investment if you wish to retain exposure to the related sector such as metals, energy or the financials. As an example, if you sold Kinross Gold Corp at a loss you could buy IAMGOLD Corp on the same day. You would be trading a distressed gold stock for another distressed gold stock. If you had a basket of gold stocks to sell you could buy a gold stock related ETF such as the iShares S&P/TSX Global Gold Index Fund (XGD)
IMPORANT: This group has historically printed a significant rally in the first week of the following January. The basket below could produce a one-week return of 15%
Tax Loss Selling Rebound Candidates 14-Dec11
Stocks under $1 and a volume of less than 30,000 are removed