Financial Advice for Retirement, Social Security, IRAs and Estate Planning

A Winning Year-End Stock Picking Strategy

November 6, 2018

You can select stocks by looking at fundamentals. Or you can look for tricks that help determine stocks. This article describes a strategy Merrill Lynch developed for year-end stock buying. It says to look for stocks being sold to harvest losses for year-end tax planning.

Since 1986, stocks that fit the “tax-loss harvesting” criteria subsequently rose by an average of 5.1 percent in the three months following that deadline, according to Bank of America Merrill Lynch. The uptick is higher than the S&P 500′s average return of 3.7 percent in the same period, with a hit rate of 69 percent.

“In a year characterized by volatility and reversals, the next catalyst may be tax loss harvesting,” Bank of America Merrill Lynch Equity Strategist Savita Subramanian said in a note to clients Monday. “On a monthly basis, this strategy tends to have the highest median returns in November and January, perhaps benefiting from the rebound after the October 31 deadline for tax loss selling for mutual funds and then the rebound after the December 31 deadline for regular tax filer.

 

bob-carlson-signature

Retirement-Watch-Sitewide-Promo

Log In

Forgot Password

Search