Slim Pickings in Tax-Bounce Plays

One relatively tried and true market strategy has been to play the year-end tax bounce. This entails screening for the year's biggest losers and building a basket of so-called tax-bounce candidates. 

The rationale behind this strategy is to take advantage of tax-driven selling, as mutual funds and individual investors sell their biggest losers before the year closes out in order to reduce annual realized gains. Of course, this tax-selling gambit puts seasonal pressure on the year's biggest dogs, producing even greater declines than should be warranted by their fundamentals, as tax-driven sellers are more highly motivated than buyers at year-end. ...452 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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