Tax loss selling. Today I look at the 'index impact' and how this time the whole market will be smacked because so many big cap stocks will get hit. This comes as investors crystalize capital losses before the end of the Australian tax year, which ends on the 30th June. Institutions clean their books and in some cases completely dump a holding so that they do not own it by 30 June. This is particularly applicable to high-profile disasters. When they publish their portfolio in the annual report, showing exactly what stocks they held on 30 June 2016, they don’t want shareholders or clients to focus on a “bad holding”. I have looked at tax loss selling over the years, and it begins earlier than most realise – around now.
I'm not so sure there'll be much tax loss selling because there won't have been much capital gain made in stock markets to require an offset