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Constellation Software Inc. (CSU)
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iShares 1-5 Year Laddered Corporate Bond Index ETF (CBO)
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iShares U.S. High Yield Bond Index ETF (CAD-Hedged) (XHY)
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Vanguard Canadian Aggregate Bond Index ETF (VAB)
Q: Hello,
I am trying to determine whether tax loss selling would make sense in my current scenario. I have an over 20% weight position with CSU. I want to reduce this position which will trigger a large capital gain. Does is it make sense to sell my fixed income positions in CBO, XHY and VAB which will trigger a tax loss to help offset the CSU capital gain? I can also leave as is and hope the interest rate situation turns around in 2024?
Thanks for your help.
I am trying to determine whether tax loss selling would make sense in my current scenario. I have an over 20% weight position with CSU. I want to reduce this position which will trigger a large capital gain. Does is it make sense to sell my fixed income positions in CBO, XHY and VAB which will trigger a tax loss to help offset the CSU capital gain? I can also leave as is and hope the interest rate situation turns around in 2024?
Thanks for your help.
5i Research Answer:
We are fine with tax loss harvesting, especially to offset a big gain. The main risk of course is if a stock or ETF 'runs higher' after selling. This is always a risk, but a tax benefit is a guarantee. We think it can still make sense. Bond funds could rise next year, but we do not think they are going to 'spike' higher, or enough to offset tax benefits realized. We would be fine with a tax loss/rebuy strategy.