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For those unfamiliar, tax-loss harvesting is a strategy investors use to reduce their taxable income by selling investments that have lost value and replacing them with similar investments. This allows investors to offset capital gains from other investments since any losses can be used to reduce the amount of capital gains subject to taxation. The practice is typically used to minimize the amount of taxes investors must pay on their investments, as losses can be used to offset any capital gains. Tax-loss harvesting can also be used to rebalance portfolios, as investors can use the losses to reduce their overall portfolio risk.
Typically taxes that are tax-loss harvested hit a low on Friday of the week before Christmas week. This year that was Dec. 16, so today, we will look at stocks that hit their lows on Dec. 16 and are seen by Wall Street as having an upside so that you can consider these stocks when building your portfolio in early 2023. Studies show these stocks tend to rise until Feb. 15, when their movements are back in proportion to the rest of the market.
