At Extreme Investor Network, we understand the importance of strategically managing your investment portfolio, especially as the year comes to a close. As we approach the final months of 2024, investors are taking a closer look at their holdings and considering which assets to retain and which to let go.
According to Wolfe Research, there are certain stocks that have underperformed this year and may continue to face pressure as investors engage in tax-loss selling to offset capital gains. This strategic approach can help investors save on taxes and potentially improve their overall portfolio performance.
One such stock that has landed on Wolfe’s list of tax-loss selling contenders is Dollar Tree, which has seen a significant decline of nearly 53% in 2024. The recent cut in its full-year outlook led to a sharp drop in the stock price, prompting analysts to downgrade their ratings.
Another company to watch is ZoomInfo Technologies, which provides data for companies and has experienced a 46% decline in its stock price this year. Analysts are cautious about the near-term challenges facing the company, despite seeing potential for long-term growth.
In addition to Dollar Tree and ZoomInfo, other names in Wolfe’s tax-loss selling basket include companies like Rivian Automotive, Walgreens Boots Alliance, and Dexcom. These stocks may see further selling pressure as investors seek to realize capital losses before the end of the year.
But tax-loss selling is not just for portfolio managers – individual investors can also take advantage of this strategy. By selling underperforming assets and using the realized losses to offset capital gains, investors can potentially reduce their tax liabilities and improve their overall financial position.
However, it’s important to be mindful of the wash sale rule, which prohibits investors from repurchasing a substantially identical security within 30 days before or after selling it at a loss. Violating this rule can result in the disallowance of the loss for tax purposes.
As we navigate the final months of 2024, it’s important to stay informed and proactive about managing your investments. By considering tax-loss selling opportunities and making strategic decisions about your portfolio, you can position yourself for a successful financial future. Stay tuned to Extreme Investor Network for more insights and updates on investment strategies.