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  5. MG: I intend to use as many losing companies such as above POU, RY, TOU and MG (presently underwater) against a significant amount of capital gains to reduce my taxes for 2023. [Magna International Inc.]
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Q: I intend to use as many losing companies such as above POU, RY, TOU and MG (presently underwater) against a significant amount of capital gains to reduce my taxes for 2023. I will probably buy them back in the new year. What is wrong with this approach? Please explain.
Thank you.
Asked by ALBERT on December 08, 2023
5i Research Answer:

We encourage crystallizing losses. In the market there are no guarantees, but a tax loss is a guaranteed past or future savings of tax. The only real concerns are (i) trading costs, and (ii) whether the stock soars higher in the interim before re-buying. The latter happens once in a while, yes, but on average stocks do not move nearly as much as the tax benefits realized. We think it is a fine strategy. 

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