Summary
As we have said before, December is the trickiest month to trade. Should one sell big winners and pay capital-gains tax or wait until early in the next year? Or sell some losers to offset capital gains? If a portfolio is behind, what can be done to catch up? These questions are asked every December. One option is to fade break-outs (some are working, like AAPL) and buy break-downs. That is basically the opposite of what is usually done during the other 11 months of a bull-market year. At the end of a good year, portfolio managers and RIAs “can’t” sell a certain stock if it’s up 100% and subject to large capital-gains taxes. While these big gains can be offset a bit by tax-loss harvesting, many just hold big winners until the next year. Other recognize that the purpose of the investment game is to make big money — and if that means taxes must be paid, then the job was well done. We mention this because some of 2024’s biggest winners and recent market stars were taken to the woodshed on Monday. It appears many thought it was better to take a 100% gain and pay capital-gains taxes — and not possibly end up with a 50% gain but a smaller tax obligation. The biggest winner la
