The year is coming to a close, and the major indices are once again trending higher. The Dow Jones and S&P 500 are near their all-time highs, and the NASDAQ is near its 52-week high. As a result a lot of stocks are also trading near their highs, and most investors have booked some big gains in positions through the course of the year.
However, not all stocks have enjoyed gains this year, and with the end of the year just around the corner, it is time for investors to begin considering which losing stocks they should dump to help counter some gains booked earlier in the year.
Emotionally, it can be very difficult to let go of our losing trades. We want to believe that the stocks will come back, and while that is sometimes the case, there are times when we simply have to swallow our pride, and admit that we made a bad investment. This decision is not easy to make, but near year's end is the time to make that decision in order to help with our taxes.
It is important to note that you should never make investment decisions simply from a tax point of view. You need to weigh both the positive and negative consequences of all your trading activities, but they should not be the sole reason you make moves. The ideal situation is to find moves that not only make sense from an investing point of view, but also have a positive tax advantage. That is what we are seeking with the following group of stocks.
Each of the following five stocks is facing serious problems, which investors should view as a major sell signal. These are not stocks you want to hold in your portfolio, and if you currently have them, now is a great time to take your loss, and lower your 2014 tax bill.