Investors start to sell their poorly performing stocks at the end of the year for a capital loss because :-
Investors tend to feel twice as bad about a loss as they feel good about a gain of the same size. As a result, they end up holding onto (not “disposing” of) a losing position, hoping that it will regain its value. They also will tend to sell an appreciated security too soon, for fear it will soon lose value.
Is it better to sell stock at a loss?
- Generally though, if the stock breaks a technical marker or the company is not performing well, it is better to sell at a small loss than to let the position tie up your money and potentially fall even further.
- Investors might sell their stocks is to adjust their portfolio or free up money. Investors might also sell a stock when it hits a price target, or the company's fundamentals have deteriorated. Still, investors might sell a stock for tax purposes or because they need the money in retirement for income.
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