Post #282 by lizgdal on the Index Investing board

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- Manlobbi

Investment Strategies / Index Investing

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rayvt wrote: The idea is to occasionally sell a stock or ETF you like but which is currently sitting at a loss, to book the taxable loss. Simultaneously, use than money to buy another holding which is quite equivalent.

Beware of return reversion. Stocks with poor short-term performance tend to bounce higher. For example, starting with the S&P 500, pick the 50 stocks with the lowest return. CAGR from 1/4/2021 to 3/26/2026:

Lookback CAGR excess
1008 8.0 -2.2
504 14.5 4.3
252 8.0 -2.2
126 7.8 -2.4
63 11.9 1.7
42 17.9 7.7
21 13.3 3.1
10 10.8 0.6
5 11.3 1.2

RSP 10.2 0.0

P123 {S5TLH}
Universe(SP500)
FOrder("Ret%Chg(Lookback)", #Previous, #Asc) <= 50
4 week rebalance, 0% slippage

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