Summary
As we have said before, December is the most difficult month to trade. Should one sell big winners and pay capital gains taxes, or wait until early next year? Or sell some losers to offset the capital gains? If a portfolio is behind, what can be done to catch up? These questions are asked every year in December. One option is to fade breakouts (some work, like AAPL) and buy breakouts. That’s essentially the opposite of what is usually done during the remaining eleven months of a bull market year. At the end of a good year, portfolio managers and RIAs “can’t” sell a particular stock if it is up 100% and subject to large capital gains taxes. While these big gains can be offset somewhat by tax loss harvesting, many only have big winners until next year. Others recognize that the goal of the investment game is to make a lot of money – and if that means paying taxes, then a job well done. We mention this because some of the biggest winners of 2024 and recent market stars were taken to the woodshed on Monday. It seems many thought it was better to take a 100% gain and pay capital gains taxes – and possibly end up not with a 50% gain, but with a smaller tax liability. The biggest winner la
