You have until December 31–which effectively means Friday December 29 (although I wouldn’t push the deadline, personally) to sell your losers this year to off set any gains from winners you sold during the year. Given the way the year has unfolded, harvesting your tax losses to offset gains could be especially valuable this year.
We’ve got just two more trading sessions left in 2021. And then it’s on to 2022. Which means you should have wrapped up–or making any last minute sells–to harvest tax losses from 2021 in the next day or so. Of course, being the tax-savvy investor that you are, you have postponed taking profits on big winners in 2021 until 2022. (I’ll have an update on January profit-taking in the week after New Years.)
With the VIX “fear index” falling back closer to “normal” levels–it dropped to 21.89 yesterday from 31.12 on December 1–it sure feels like the extreme volatility of the end of November and early December is on the ebb. The move to yesterday’s 21.89 close from December 1 was was a surge of 30% in the CBOE S&P 500 Volatility Index in a week. This move away from panic follows on a jump in the “fear index” in the week from November 24 to December 1 of 67% in the opposite direction. I’d be surprised if we don’t see another surge in volatility in the rest of December or in January with what promises to be a crazy earnings season, but even if volatility holds at something like today’s level–slightly elevated from the historical averages but in the rough ballpark–don’t forget that volatility has a long tail. Volatility, in fact, creates volatility. And not least of all in individual stocks.
U.S. stocks have had a great year in 2017. The Standard & Poor’s 500 stock index is ahead 18.66% for 2017 as of the close today, December 23. The NASDAQ Composite, heavy on tech stocks and financials, is ahead 28.2%. But there’s a good likelihood that you’ve got a tax loss or two–not everything you own is up for the year, probably, and not everything you own is up since you bought it way back whenever–and in a year like this tax losses can be especially valuable.
