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The investments that have made the biggest gains this year are ending on a high note. Silver SI00, gold GC00, shares of Nvidia NVDA, and stock-market indexes like the Dow Jones Industrial Average DJIA, the S&P 500 SPX and the Nasdaq composite COMP have all surged in December, capping in some cases a remarkable run.
Silver, up over 150% this year, rose more than 4% on the day after Christmas.
Coincidence? Maybe not. Prices rise when there are more buyers than sellers. And where are the sellers for these investments right now? Who is going to sell before Dec. 31 when they can wait till Jan. 2 and put off booking a big taxable capital gain by a full year?
It’s human nature to delay the bill as long as possible.
The net result is that these prices are being driven artificially higher in the last few weeks of the year as sellers go on strike and wait for the new year.
And this means rational investors should give some thought to locking in their profits by selling now instead of waiting.
This isn’t a matter of market timing. Nor is it a matter of predicting future returns. It’s not about, say, selling silver because you think it’s overvalued and is going to fall in price in 2026. (That might be true, but then again, it might not.) It’s simply a matter of taking advantage of structural market irrationality. Late December is, by definition, a seller’s market for appreciated assets.
What would it really be worth to delay those capital gains by a year? It may feel much better, but the mathematical gains probably aren’t as great. The risk-free rate of return is less than 4% a year, and falling.
As always with taxes and personal finances, there are plenty of caveats. Everyone’s financial situation is different, including their financial needs and their tax exposure. This is only a general principle. But all other things being equal, if someone held silver and gold in a tax-sheltered account such as an IRA, the rational move would be to sell before the end of the year and buy again (if they wanted to) in January.
On the other hand, December also typically generates a buying opportunity in assets that have fallen a long way. That’s because there is typically a flood of sellers who are rushing to cash in their capital losses for tax losses before the year’s end.
Despite the apparent bull market, there are a lot more of these losing stocks around than you might realize. Of all the large, medium and small companies in the S&P 1500, some 675, or 45%, have seen their shares fall in value in 2025. Some 450, or 30%, have seen their stock prices fall by 10% or more. And over 200 have lost a quarter of their value, 135 have lost at least a third, and 30 stocks have lost at least half their value.
These include plenty of well-established names — many of them old-economy stocks left behind amid the mania for artificial intelligence. Those down more than 20% this year include Wendy’s WEN, Clorox CLX, Campbell’s CPB, Harley-Davidson HOG, Jack Daniel’s distiller Brown-Forman BF. B, Cheerio’s maker General Mills GIS and Kraft Heinz KHC. Wendy’s stock is down by about half.
Whether these stocks will rise in the year ahead is something absolutely nobody knows. But what we do know is that, due to the Dec. 31 tax deadline, they are currently subject to an irrational amount of selling. Which, all other things being equal, should mean their prices are artificially depressed right now.
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