Tax loss selling

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Every December, tax-loss selling tends to exert downward pressure on certain stocks as investors aim to offset capital gains.

According to Sid Mokhtari, chief market technician at CIBC Capital Markets, this creates a seasonal opportunity for "bargain hunters" seeking year-end discounts on undervalued equities with solid fundamentals, reported Jeff Lagerquist for Yahoo! Finance on December 3.

Canada's main stock index (^GSPTSE) is approaching the end of a strong year in 2025, having risen nearly 27% year-to-date, the article said. The materials and financial sectors have been the top performers, with the former benefiting from rising gold prices. Bank stocks have achieved double-digit gains this year, supported by robust earnings amid improved lending conditions.

"2025 has been particularly strong for the TSX stocks, which may make tax-loss harvesting a viable strategy for investors," Mokhtari wrote in a recent research report. "There is no exact date for tax-loss selling, but anecdotal evidence suggests that most selling activity tapers off by mid-December, during which time bargain hunters may opt to use the weakness as an opportunity to pick up candidates that are trading near their 52-week lows."

The last trading day to book losses for the 2025 tax year is December 30. Investors must refrain from repurchasing stocks sold for tax-loss purposes within 30 days of the sale to apply the loss to their capital gains.

Streetwise Reports asked some of its frequent contributors to add their own thoughts on the other "holiday season," and to give their own picks for good buys this year.

Shad Marquitz

According to Shad Marquitz of Excelsior Prosperity, the season is already in full swing, spanning from late November's U.S. Thanksgiving through the year-end holidays in December. With gold, silver, and copper prices near record highs, it's unlikely we'll see significant tax loss selling in mining stocks this season, the analyst said. Most precious and base metals producers are near their 52-week highs and remain well in the green for 2025, leaving few losses to report in this category.

"However, there are still solid opportunities in three main segments of the resource stock complex: select precious metals and base metals developers and explorers, and a number of beat-up critical minerals stocks," he told Streetwise Reports.

Developers, or companies with defined ounces or pounds in the ground and economic studies in place, still offer compelling buying opportunities during tax loss season, Marquitz said. These developers often trade at low market cap valuation multiples compared to the robust Net Present Value of their projects as outlined in their economic studies. This valuation gap is even more pronounced when investors and analysts use numbers close to the spot values of gold, silver, copper, or zinc.

Select developers had solid work programs in 2025, but key catalysts showcasing this work won't appear until Q1 or Q2, leaving the market unaware of the value creation that occurred, he said. This presents an opportunity for those who position themselves accordingly at year-end for re-ratings expected in H1 2026.

Examples

Explorers operate based on their fundamental news flow, rather than underlying metals prices. As a result, many laggards in the metals resource stocks are explorers that may have only released a portion of their drill results from the last season, with more results expected in 2026, Marquitz said.

Many explorers choose to hold back some results at year-end, preferring to start the new year with their next batch of assay results. It's likely that several explorers will greet investors in early Q1 with news of promising drill results, leading to a rise in exploration stocks in January and February.

Examples

Investors looking to capitalize on tax loss selling season may turn to the significant decline seen in some critical mineral stocks, Marquitz said. This category includes uranium, lithium, cobalt, and specialty metals stocks, with each subsector moving differently.

From late summer through early fall, investors flocked to antimony, tungsten, and rare earth stocks, pushing their prices to meteoric highs, he said. However, when these market favorites declined in mid-October, the hot money momentum dried up, and valuations corrected sharply.

"Adding fuel to this critical minerals dumpster fire was the mainstream media coverage, which continually over-inflated any solutions found with regards to critical minerals," the analyst noted. "In October and November, following the Trump administration's meetings with Australia, Cambodia, Thailand, Malaysia, and China, these stocks were left for dead as the media assumed everything was going back to normal. It's not and there were no domestic solutions for the new mine supply or downstream processing of these critical minerals achieved."

These stocks, with their unattractive charts, are prime candidates for tax loss selling, having faced strong selling pressure for the past six weeks, showing signs of selling exhaustion, he said. They may have experienced tax loss selling a bit early, from October through November.

Examples

"This tax loss season, it is easy to dismiss it overall, assuming that all stocks are closing up multiple fold in the green, he concluded. Instead, take look around at some of the laggards and losers, reassess their underlying business and sector fundamentals, and it may surprise you to see a few resource stock deals that can be accumulated as holiday gifts, for their potential re-ratings higher over the next few quarters."

Bob Moriarty

In many countries, short-term investment losses are treated more favorably than long-term losses, Bob Moriarty of 321.gold told Streetwise Reports.

"So, it makes sense near the end of the financial year to take the short-term losses even if it is in a stock you like a lot," Moriarty said. "At least in the U.S., you can buy the shares back a month later with no penalty. Selling anything naturally tends to lower prices. So, when you concentrate selling during a particular period, you depress prices beyond normal."

Moriarty said he looks at November 1 through about December 20 as "Tax Loss Silly Season," as investors rush to dump their losers in order to minimize taxes.

"Naturally the shares that have gone down the most tend to be the stocks unloaded," Moriarty said. "Yes, selling can continue to the end of the year, but with Christmas around the corner investors pretty much give up the ghost around the third week of December."

Moriarty continued, "But do remember, the selling is entirely artificial created out of quirks in the tax laws. So, the most important thing investors should keep in mind is that when the artificial selling slows or stops, prices will tend to rise. In general, from about the middle of December well into February is one of the safest times of the year to invest in beaten up shares all else being equal."

When asked for picks, the expert said "anything under $0.10 that is down 75%." He said eight out of 10 of those stocks will lose money, but "you will make a lot more on the two that go up ten-fold."

Jeff Clark

Jeff Clark, founder of TheGoldAdvisor.com, noted that "tax loss selling has traditionally been a good time to pick up shares, a phenomenon due to investors selling stocks that have not performed well."

"We have less of that this year, since many investors are sitting on large profits from the big run in our sector, especially the mini mania in October," Clark noted. "However, we do have another window to buy: the industry has been very volatile the past couple months, more than normal, offering opportunities to pick up shares of high-quality companies on big down days."

Clark said TheGoldAdvisor's strategy has been very clear: "Ride the wave, buy the dips."

"There are opportunities to do both right now," he said. "Personally, I have been very aggressive buying on the dips, as my gut tells me we'll see gold begin its next major move in January, and silver is already trying to break through US$60." Some of the stocks they are buying there include the following:

Mineral exploration and development company Amarc Resources Ltd. (AHR:TSX.V; AXREF.OB:OTCBB) is establishing a new generation of long-life, high-value porphyry copper-gold mines in British Columbia, according to its website. The company is advancing the Joy, Duke, and Ike porphyry copper-gold districts, situated in the prolific porphyry regions of northern, central, and southern British Columbia, respectively.

Another pick, American Pacific Mining Corp. (USGD:CSE; USGDF:OTC) announced recently that it has obtained a drilling permit for its Madison copper-gold project, located 43 kilometers southeast of Butte, Montana, within the Idaho-Montana porphyry belt near the Berkley Pit mine. This milestone enables the company to commence drilling on several high-priority district targets. Chief Executive Officer Warwick Smith said earlier this year that "the current commodities market has increased the demand for high-quality mineral projects, and we are in advanced discussions with potential partners on several properties within our portfolio. Alongside progressing towards a major drill campaign at Madison, we anticipate unlocking significant value through potential new joint venture partnerships, asset sales, and spinouts in the coming weeks and months."

Outcrop Silver & Gold Corp. (OCG:TSX.V; OCGSF:OTCQX; MRG1:DE) is focused on advancing its flagship Santa Ana high-grade silver project in Colombia, "leveraging a disciplined and seasoned team of professionals with decades of experience in the region," according to its website. The 100% owned Santa Ana project spans over 28,000 hectares within the Mariquita District, encompassing both titles and applications, and is recognized as the largest and highest-grade primary silver district in Colombia, with mining records dating back to 1585.

Another pick, Vizsla Copper Corp. (VCU:TSXV; VCUFF:OTCQB), has completed the acquisition of Constantine Metal Resources to become the 100% owner of the Palmer volcanogenic massive sulfide (VMS) project in Alaska, and has closed a CA$44.24-million private placement to advance work in 2026, according to a report by Mining Weekly.

Other picks by the website include Aztec Minerals Corp. (AZT:TSX.V; AZZTF:OTCQB), Cassiar Gold Corp. (GLDC:TSX.V; CGLCF:OTCQX; 756:FRA), EEmperor Metals Inc. (EMAUF:OTCQB; AUOZ:CSE; 9NH:FRA), and Prince Silver Corp. (RNC:CSE; PRNCF:OTCQB; T130:FRA).

Brian Leni

Brian Leni of Junior Stock Review told Streetwise Reports that "for the first time in many years, I don’t expect a widespread selling frenzy during tax-loss season."

The ongoing bull market in precious metals has lifted interest and sentiment across much of the resource sector, Leni said.

"When capital is flowing into a space, forced selling tends to be more selective and less indiscriminate," he noted. "That said, not all segments of the market are participating equally. Oil and nickel remain among the most out-of-favor areas of the resource market."

Pessimism is always somewhat subjective, but it often takes hold most firmly in commodities tied directly to economic expectations.

"You might reasonably ask: what about 'Dr. Copper'? Isn’t it supposed to be a gauge of economic health?" he wrote. "In most cycles, yes. But this year copper is telling a different story."

The market absorbed another major supply shock stemming from ongoing issues at Freeport’s Grasberg mine — one of the world’s most important copper assets, Leni said.

"This is not a short-term disruption. When you combine that with the long lead times required to develop new copper supply, a structural imbalance has emerged. It’s a key reason copper pushed above US$5/lb and why prices may remain elevated longer than many expect," he said.

While copper valuations have risen, Leni said he believes the equities still offer compelling upside. In fact, over the past 12 months he said he's been rotating precious-metals profits into select copper names to take advantage of what he saw as a "relative valuation disconnect."

This wasn’t textbook contrarian investing, but it was the right move from the standpoint of near-term market recognition in a part of the market that remained comparatively inexpensive, he said.

The strongest performers in his portfolio so far have been Surge Copper Corp. (SURG:TSX.V), Firefly Metals Ltd. (FFM:TSX; FFM:ASX), and Hot Chili Ltd. (HCH:ASX; HCH:TSXV; HHLKF:OTCQX). Each has returned more than 50% this year, and in his view "still has a meaningful runway as key catalysts approach, ranging from PFS completion to exploration drilling and post-PFS optimization work," he said.

Oil, on the other hand, may be giving us a clearer picture of the broader economy — and potentially foreshadowing a more challenging backdrop as we move into 2026, Leni said.

Oil prices are trading near multi-year lows, with many commentators pointing to a supply glut. This is the classic setup for deeply bearish commodity sentiment. But investors willing to look backward to understand what lies ahead will recognize that today’s oversupply is likely transitory. Oil exploration and development have been chronically underinvested for the past 10–15 years. The combination of policy pressure from the green movement and the maturation of the U.S. shale boom materially curtailed long-cycle capital spending.

That underinvestment will assert itself in future supply constraints. To me, this is not a question of if, but when.

"Given oil’s unparalleled role in the global economy, it’s clear we are decades — not years — away from moving past it," Leni wrote. "In fact, I believe absolute oil usage is likely to grow over the next decade as developing economies expand and energy demand continues to rise."

Overlay that with the well-worn government and central-bank playbook — lower interest rates, fiscal stimulus, and monetary expansion — and the longer-term implications become obvious, he said. Global debt levels will continue to rise.

"The realistic options for dealing with that burden remain limited: default, or inflation," Leni noted. "History suggests inflation is the chosen path. In that environment, life becomes more expensive — and commodity prices tend to rise with it, including oil and nickel."

Having been a full-time, independent resource-sector investor for the past 10 years, Leni said he has seen this cycle play out repeatedly.

"The approach remains the same: buy quality companies, run by capable management teams, at prices below intrinsic value," he said. "These cycles take time. But good companies continue to raise capital, advance projects, and add value even in difficult markets. That groundwork is what enables extraordinary returns when sentiment shifts."

Leni said he was buying gold and silver equities in 2022 and 2023, years when precious metals were out of favor. Those purchases laid the foundation for multi-bagger returns in 2024 and, increasingly, in 2025, he said.

"Today, with the timing of sentiment change in oil and nickel still uncertain, selectivity matters," he noted. "I believe investors should be focused on the best-positioned names — companies with strong balance sheets, durable assets, and margin of safety."

Opportunities such as purchasing integrated majors like Exxon Mobil at discounts to NAV do not appear often. When they do, they offer downside protection while preserving substantial upside optionality. Opportunity is most abundant when conditions feel uncomfortable, he said.

"It takes patience, conviction, and the willingness to look wrong — sometimes for longer than expected," Leni told Streetwise. "But when the cycle turns, the time spent waiting is often repaid many times over."

Chen Lin

Chen Lin discussed the phenomenon in his What Is Chen Buying? What Is Chen Selling? newsletter and discussed some picks of his own.

They included Novocure Ltd. (NVCR:NASDAQ), which just had a "heavy insider purchase, (the) ex-CEO bought US$1million in shares; and Delcath Systems Inc. (DCTH:NASDAQ), which he said also noted heavy insider purchases and share buybacks.

"Both had weak 2025 and bright 2026," he said.

And FibroGen Inc. (FGEN:NASDAQ), which is expected to release key Phase 2 data in H2 2026, was trading below cash, Chen said.