Following Saul and folks on his board, as well as Knox Ridley, and a few others, I have holdings of “risk-on”, growth growth stocks that have fallen significantly in the last five months, and I’ve been wondering if there is a way to use the paper loss to my advantage against taxes.
My holdings of $MNDY is down ~40% since buying it, and now I’m thinking the best solution is to sell it straight away, taking the short-term capital loss that can offset short-term capital gains I hope to achieve later this year.
I like Monday and will probably buy it back in ~31 days after satisfying IRS wash sale rules. In the meantime, I am thinking of placing the money in other growth stocks. Ideally, I’d find another company that is similar to $MNDY, but that’s not so easy to do, but the money can go into any one of a handful of growth stocks that have similar price depression, while looking like long-term picks.
This strategy is based on a couple assumptions: (1) growth stocks are compressed in value and will spring upward soon; (2) other growth stocks can be purchased that will have somewhat similar price action as Monday for the 31 days needed.
– Paul