‘Tis the Season for Tax Loss Selling
It is tax loss season: the time of year when investors review their portfolios and look for those equities that are trading at a loss. While the TSX Composite index is up 2.2% year to date, it is down 4.5% since hitting its high in February 2012 and the TSX Venture Composite Index has dropped 26% from the highs achieved in February 2012. This suggests that there are ample opportunities for investors to sell losing positions to minimize tax exposure and potentially recoup taxes paid in previous years. For investors looking for a reprieve from recent selling pressure, tax loss selling could prolong the discomfort. On the flip side, for those investors with cash on the sidelines, tax loss selling could provide an excellent opportunity to accumulate shares at a discounted valuation.