Every December, tax-loss selling puts downward pressure on certain stocks, as investors look to offset capital gains. CIBC Capital Markets chief market technician Sid Mokhtari says this opens up a seasonal opportunity for \u201cbargain hunters\u201d looking for end-of-year discounts on beaten-up equities with sturdy fundamentals.<\/p>\n
Canada\u2019s main stock index (^GSPTSE<\/a>) is nearing the end of a strong performance in 2025, rising nearly 27 per cent year-to-date. Materials and financials have been the top-performing sectors, with the former benefiting from soaring gold prices. Bank stocks have booked double-digit gains this year, backed by strong earnings amid improved lending conditions.<\/p>\n \u201c2025 has been particularly strong for the TSX stocks, which may make tax-loss harvesting a viable strategy for investors,\u201d Mokhtari wrote in a recent research report.<\/p>\n \u201cThere 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.\u201d<\/p>\n The last trading day to book losses for the 2025 tax year is Dec. 30. Investors cannot buy the stocks they sell for tax-loss purposes within 30 days of a sale in order to have the loss applied to their capital gains.<\/p>\n Mokhtari highlights six companies which he says are \u201cfundamentally ranked as sector Outperformers and, in our view, appear on sale from a positive mean-reversion perspective.\u201d They are Boralex (BLX.TO<\/a>), Brookfield Asset Management (BAM.TO<\/a>), Constellation Software (CSU.TO<\/a>), FirstService (FSV.TO<\/a>), TFI International (TFII.TO<\/a>), and Thomson Reuters (TRI.TO<\/a>).<\/p>\n Back in October, CIBC Capital Markets screened a larger list of TSX-listed stocks that may be affected by tax-loss selling pressure during November and December. The bank says the following list of 40 stocks includes some additions and deletions since then.<\/p>\n Mokhtari specializes in technical analysis. His team recently published a list of 10 TSX stock picks for December 2025<\/a>.<\/p>\n Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on X @jefflagerquist<\/a>.<\/p>\n