As the end of the year approaches, investors who own stocks that have fallen dramatically during 2012 are faced with the usual dilemma: Should they take their lumps and sell their shares at a loss, or should they hang on, hoping for a rebound? Ordinarily, the reward you get from tax-loss selling creates an extra downward push in November and December for beaten-down shares, offering an interesting buying opportunity for those who believe their long-term prospects are better than most of their peers think.
But thanks to an unusual situation this year, the tax-loss selling phenomenon may not take shape in the same way it usually does. As a result, with selling potentially deferred into 2013, you may not want to count on losing stocks bottoming out before the end of the year.
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