by Byrne Hobart
Investors have long known that December and January are among the best months for stocks. Most investors know why, too: late in the year, it’s possible to sell losing stocks in order to shelter profits from the rest of the year. For example, if you’ve lost $1000 on GE, and made $1000 on IBM, you can sell both, take both losses—and pay not capital gains taxes on your profit.
Because of this, it makes sense to sell at the end of the year. (The IRS will let you buy the stocks back after 30 days and still give you the tax penalty.) And if people are selling stocks they still like, they’re going to buy them back later. All this… Read more…