The phenomena of year-end tax-loss selling is over as of December 31, 2019. The decade completed, and taxes filed, now the Cannabis Sector gets a second wind, it will not be without pain, but one of the pressures is off so these stocks can get back to the business of selling weed.
It happens to every sector, autos, oil or technology stocks as we enter into the final quarter of any year and the stock is lower than it was on January 1 of that same year, and you can thank our tax code if you are affected. It is another reason to hate our current tax system where companies dump good stocks into year-end and then buy them back. Just plain stupid.
We have yet to see the bounce in the Cannabis Sector but make a note, where the pedigree stocks are trading in early January, and check back around the 4th of July. You will find the pressure valve has been released for many portfolio managers to find there way back to a growing sector.
In a previous article, we noted the nuance of this trade and why to watch out for it, click here to learn more about tax-loss selling. Note also that Cannabis was recently added as a legitimate sector investment where many managers could not invest because it is still illegal under federal law in the United States, and primarily all stocks trade in Canada versus listing on US exchanges. Some have been added to the NYSE and Nasdaq in 2019, but understand that the sector was just recently bankable as far as accountants were concerned.
This early-stage investing defines what happens in new markets, and how long they take to get traction but do some research on Cannabis Stocks, note where they are today after the tax-loss selling pressure into year-end and check back around the 4th of July Holiday.