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Using Tax-Loss Harvesting to Improve Investment Returns

02 December 2021

An investment loss can be used to offset capital gains tax on realized gains in an investment portfolio. It can also be used to offset taxes on ordinary income. For a married couple filing jointly, up to $3,000 per year in realized losses can be used to offset ordinary income on federal income taxes.

Even if an investor doesn't anticipate any capital gains this year, there are still benefits to the tax-loss harvesting strategy because capital losses can be used to offset ordinary income. In addition, losses can also be carried into the future and used to offset future gains.

Wash-Sale Rule

Investors cannot deduct a capital loss on the sale of a security against the capital gain of the same security. This is called a wash sale. Wash-sale rules prevent taxpayers from selling or trading a security at a loss and, within 30 days before or after this sale, buying the same stock or security—or a "substantially identical" one (or acquiring a contract or an option to do so). In the event of a wash sale, your tax write-off may be disallowed by the IRS.2

For investors that want to harvest their losses, while also avoiding any wash-rule violations, one strategy for an individual stock that loses value is to replace it with a mutual fund or ETF that targets the same industry. This will allow you to maintain a similar asset allocation in your portfolio.

Posted by CAROL M. KOPP, Investopedia

Basically Bloodbath all around for Mid and Small Caps. Big Tech still holding on well. This is only applicable for US, but it hurts all of us. 

Cathie Wood: My Stocks Aren't in a Bubble, but Yours May Be

03 December 2021

Market-darling investor Cathie Wood said the stocks held by her Ark Investment Management ETFs aren’t at frothy levels, but “benchmark” stocks are.

By benchmark, she’s probably referring to technology giants Meta Platforms (Facebook)  (FB) - Get Meta Platforms Inc. Class A Report, Alphabet  (GOOGL) - Get Alphabet Inc. Class A Report, Amazon  (AMZN) - Get, Inc. Report, Apple  (AAPL) - Get Apple Inc. Report and Microsoft  (MSFT) - Get Microsoft Corporation Report.

The biggest holdings of Ark’s benchmark Ark Innovation ETF ARKK are Tesla TESLA, Coinbase Global COIN, Teladoc Health TDOC, Roku ROKU and Zoom Video Communications ZM.

“We are not in a bubble,” Wood told CNBC. “Our strategies would be flying if we were. I think we have not begun rewarding innovation for what’s about to happen. So that’s where our conviction comes from. The bubble is in the benchmark stocks.”

Ark Innovation has slumped 20% this year and 11% over the past 12 months. But it’s up 98% over the last two years, and 41% annualized over the past five years.

By DAN WEIL, TheStreet

The big Techs are really highly valued now. However, I think FB under 1T is a steal. Price around 310 now. Good deal.

Why Triterras Stock Lost as Much as 25% of Its Value in Early Trading Today

10 December 2021

To sum up the update, Triterras will not meet a Nasdaq deadline for providing its annual report to the Securities and Exchange Commission (SEC). That means the company is not in compliance with listing requirements. Management is working on the report and has notified Nasdaq of the issue, explaining that it will provide further updates as it knows more.

The biggest near-term threat is probably that Triterras risks being delisted, which would make it harder for investors to trade the stock and would likely lead some of them to sell their shares. That would put downward pressure on the price in what is likely to be a less-liquid market for the shares. Investors might be trying to get out before that happens.

However the company also noted that it was delaying the release of its annual report. It was given approval from Nasdaq for this, with a Nov. 1 due date. The company missed that date (leading to a material stock price decline) and was granted an extension until Dec. 1. It missed that date, too. And now it is in the process of asking for yet another extension, with no clear indication as to whether or not Nasdaq will be willing to grant it.

Doing an audit is not an easy or quick task, but missing multiple deadlines isn't a particularly good sign, either, and investors are clearly getting more and more worried. That's entirely understandable.

Posted by Reuben Gregg Brewer, The Motley Fool

Disaster for TRIT. Very bad for investors as we don't like uncertainty. Gotta stick with them for now. Might need to roll out options to avoid assignment

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