{"id":45865,"date":"2013-12-31T05:49:50","date_gmt":"2013-12-31T10:49:50","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/?p=45865"},"modified":"2013-12-31T05:49:50","modified_gmt":"2013-12-31T10:49:50","slug":"a-six-pack-of-last-minute-buys","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2013\/12\/31\/a-six-pack-of-last-minute-buys\/","title":{"rendered":"A Six-Pack of Last-Minute Buys"},"content":{"rendered":"

By WallStreetDaily.com<\/u><\/a> <\/p>\n

I don\u2019t know about you. But I\u2019m all about starting 2014 off on a profitable note.<\/p>\n

So forget about simply counting our profits as we coast into the New Year. It\u2019s time to set ourselves up for even more<\/i>.<\/p>\n

How so?<\/p>\n

We\u2019re going to exploit a seasonal market opportunity. One that strategists at Barclays just confirmed provided \u201caverage excess returns\u201d in the month of January\u2026 for 10 years<\/i> running!<\/p>\n

The only catch is, we have to act on this information in the next few days.<\/p>\n

As you\u2019ll see in a moment, the incentive to do so is bigger than it\u2019s been in nearly a decade.<\/p>\n

A Record Year for Profits<\/b><\/p>\n

With one trading day left in 2013, the S&P 500 Index is up an impressive 29%.<\/p>\n

The rising tide certainly lifted almost all<\/i> boats, too. According to the tally from Bespoke Investment Group, 452 stocks in the Index are in positive territory for the year.<\/p>\n

That\u2019s the good news. Now for the bad news\u2026<\/p>\n

Come April 15, 2014, investors will have to pay dearly for all those profits in the form of capital gains taxes. Much more so than in years past, too, since the capital gains tax rate jumped to 23.8% for the highest earners.<\/p>\n

Ironically, that\u2019s where our opportunity comes in\u2026<\/p>\n

Over the last few weeks, at the behest of their advisors, many investors have been \u201charvesting\u201d losses. That is, they\u2019ve been dumping shares of the losers in their portfolios to offset their capital gains – and, in turn, reduce their tax liability.<\/p>\n

What\u2019s more, this is occurring without any regard for individual company fundamentals.<\/p>\n

If the stocks are down for the year, no matter how bright the prospects are for 2014, they\u2019re being kicked to the curb.<\/p>\n

The good news is, this indiscriminate selling naturally leads to artificially depressed prices (i.e., bargains), particularly in small-cap companies. <\/a><\/p>\n

The bargains don’t last, though.<\/p>\n

Multiple studies confirm that undervalued, small-cap companies perform best in January. The phenomenon is commonly referred to as the January effect.<\/p>\n

As I mentioned before, Barclays found that these stocks handed investors an extra 2.4% in profits in January alone.<\/p>\n

Meanwhile, MarketWatch\u2019s<\/i> Mark Hulbert found that the smallest 10% of stocks averaged a 7.9% return <\/i>in January.<\/p>\n

But in 2014, I expect the January effect to be even more pronounced. Here\u2019s why\u2026<\/p>\n

A Rare Double Whammy<\/b><\/p>\n

With so few stocks down this year, tax-loss selling opportunities are scarce.<\/p>\n

Translation: The stage is set for \u201ca double whammy for the stocks that the rally left behind,\u201d according to Stifel Nicolaus\u2019 Dave Lutz.<\/p>\n

They\u2019ll be sold off more. And that means they\u2019ll bounce back more, too.<\/p>\n

It won\u2019t happen immediately, of course.<\/p>\n

Tax laws – specifically the wash-sale rule – prevent investors from claiming the loss on the sale of a stock if they repurchase it within 30 days.<\/p>\n

However, large institutions often start deploying capital aggressively at the beginning of the year. That means beaten-down small caps from last year tend to rally within the first few weeks of January.<\/p>\n

So what small-cap stocks hold the most upside potential for January 2014?<\/p>\n

I\u2019m going to hold off until tomorrow to reveal their identities. That way, we can be sure the tax-loss selling is done. Stay tuned.<\/p>\n

And get some capital ready! When the market opens at 9:30 AM on January 2, you\u2019ll need to be ready to pull the trigger!<\/p>\n

Ahead of the tape,<\/p>\n

Louis Basenese<\/p>\n

The post A Six-Pack of Last-Minute Buys<\/a> appeared first on Wall Street Daily<\/a>.<\/p>\n

Article By WallStreetDaily.com<\/u><\/a><\/p>\n

Original Article: A Six-Pack of Last-Minute Buys<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

By WallStreetDaily.com I don\u2019t know about you. But I\u2019m all about starting 2014 off on a profitable note. So forget about simply counting our profits as we coast into the New Year. It\u2019s time to set ourselves up for even more. How so? We\u2019re going to exploit a seasonal market opportunity. One that strategists at … <\/p>\n

Continue reading “A Six-Pack of Last-Minute Buys”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-45865","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/45865","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/comments?post=45865"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/45865\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/media?parent=45865"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/categories?post=45865"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/tags?post=45865"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}