Like retailers, the stock market runs a lot of sales this time of year, so let’s go shopping.
Each year around this time, investors dump their dogs to generate losses so they can offset gains and lower tax bills.
But not everything they sell is garbage. If you stick to promising companies with solid balance sheets and pay a dividend, or are buying back a lot of stock, you can take advantage of the selling to pick up bargains.
This year, tax-loss selling is particularly pronounced and probably creating more bargains than normal because of an unusual dynamic. Many investors took profits earlier in the year when the market was strong. Now they face a tax bill, even though their stock portfolios have done poorly overall in 2015.
