Dear Contra_Folk,

We have reduced our shorts now and will neutralize our portfolio over the weekend for a upshot on Monday.

We are also beginning to trigger our year-end tax loss selling on our short ETFs.  By tax planning today and triggering our capital losses by selling our positions underwater, we can reduce our portfolio losses by claiming refunds on past capital gains taxes paid (at our marginal tax rates) on capital gains/losses in the past, present, or future. 

Tax-loss Harvesting; It's A Good Thang

These tax losses will then be carried back 3 years (forward indefinitely) to offset any capital gains tax paid in those years and note any excess can be carried forward.   By switching between the US shares and the CDN short shares ETF, one can maintain (or rebuild) a hedged (short) position without triggering superficial loss rules.

In the end, we will receive a tax refund to redeploy early in the new year.  Either way, getting tax refunded is a good thing in any year - but this year, it will be especially valuable as a bonus part of your investment plan.

Nothin' like using other people's money.