Window dressing

  1. 1,383 Posts.
    June has typically been my best trading month because such a simple strategy can be used to make plenty. In the first two weeks I simply buy all the dogs that get tax loss sold and sell them back a couple of days later for 50% to 100% profit. In the next two weeks I use this money to buy derivatives on the market darlings which the institutions are about to load up on for window dressing. Then I sell them at close on June 30 before the market dumps.

    This year - bear market in bluechips so it doesnt work. Not only has there been very little straight tax loss selling (or it has been impossible to jump on), the situation with window dressing is not clear. Most of the institutions are in the red - so what will they do? Making the figures look better is much more important this year than getting a tax loss, they will have plenty of those anyway.

    It depends on whether you are on accrual or cash accounting. If on cash, like most super funds, what I would do is hold on to my losers until July 1, maybe even bid them up a little, and concentrate on getting some profits on the books from the winners - by selling them in time for it to appear on the books. I think we have already seen a bit of this with the banks and other winning stocks, most of which seem to have keeled over.

    If on accrual, there's not much you can do except to try to bid stock prices higher into close on Friday, in the usual manner. So we will get pump and dump, but not to the extent of most years.
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