Release the toxins (The Financial Athlete #82)

For years I have been told, “Heavy sweating releases toxins.” I had never questioned this conventional wisdom until I researched this online.

Medical experts say only trace amount of toxins are released through sweat. The purpose of the sweat glands is to cool an overheated body. The liver and the kidneys filter toxins from the blood, toxic metals are released through urine and feces.

For years I have also heard this conventional wisdom for portfolio management: “Sell your losers. Ride your winners.” While this is true for stocks of underlying companies with deteriorating fundamentals, it is blindly followed in the final months of the year for tax loss selling to offset other capital gains. Many of those paper assets sold are not “toxic”. Rather, they are undervalued. Therefore, unless tax rates on capital gain are marginal the best bargains for stocks are typically ripe at the end of the year.

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