Pure Benchmarks · Data
Should I Sell My Stocks Before the End of the Year?
Updated
Short answer
The main reason to sell before December 31 is tax, not timing. A sale with a trade date in the year counts for that year, so a loss sold by December 31 can offset that year’s gains and up to $3,000 of other income. As a market call, December has been a coin toss: from 2018 to 2025 the S&P 500 rose in four Decembers and fell in four, from a 9.2% fall in 2018 to a 4.4% rise in 2021 and 2023. In each of the four down Decembers, the index rose the following January.
The end of the year brings two separate questions that often get mixed together. One is about tax: should you realise a gain or a loss before the calendar turns? The other is about the market: is December a good or bad time to be invested? This page separates them, with the S&P 500’s December and January record from 2018 to 2025 and the tax rules that set the deadline.
Link your portfolio and every change you make is scored against the portfolio you would have kept, in dollars, so you can see which decisions helped and which cost you.
See Your Free Benchmark ReportS&P 500 in December and the following January
| Year | December | Following January |
|---|---|---|
| 2018 | -9.2% | +7.9% |
| 2019 | +2.9% | -0.2% |
| 2020 | +3.7% | -1.1% |
| 2021 | +4.4% | -5.3% |
| 2022 | -5.9% | +6.2% |
| 2023 | +4.4% | +1.6% |
| 2024 | -2.5% | +2.7% |
| 2025 | -0.1% | +1.4% |
Month-end S&P 500 index closes, November 2018 to January 2026. Prices only; dividends are not included. Calculated by Pure Benchmarks.
December is not a reliable signal
Over these eight years December was split evenly: four rises and four falls. The worst was 2018, when the index fell 9.2% in the month, and the best were 2021 and 2023 at 4.4% each. Eight years is a short record, and it does not support selling into the year end or buying in for a seasonal rally.
Selling in a falling December has been costly
In all four years when December fell, 2018, 2022, 2024 and 2025, the index rose the following January, by 7.9% after the 2018 fall. An investor who sold out of fear in late December and waited for the new year to come back would have bought back higher each time.
The tax deadline is real
For shares traded on an exchange, the sale counts in the year of the trade date. A loss sold by December 31 can offset gains realised that year, and if losses are larger than gains, up to $3,000 of the excess ($1,500 if married filing separately) can offset other income, with the rest carried forward to later years. Selling a winner in January instead of December pushes the tax on that gain into the next year.
Watch the wash sale window
A loss is disallowed for tax if you buy the same or a substantially identical security within 30 days before or after the sale, a 61-day window. The disallowed loss is added to the cost of the new shares rather than lost. Selling a loser on December 20 and buying it back on January 5 falls inside the window.
Use the year end to review, not to react
The year end is a natural point to look at what each decision you made during the year actually did. Pure Benchmarks, our own product, scores every change in a linked account against the portfolio you would have kept and ranks the portfolio against verified investors in the same risk category, which makes an annual review a matter of reading the results.
Link your portfolio and every change you make is scored against the portfolio you would have kept, in dollars, so you can see which decisions helped and which cost you.
See Your Free Benchmark ReportFrequently asked questions
Should I sell stocks before the end of the year?
Tax is the usual reason: a sale counts in the year of its trade date, so a loss sold by December 31 can offset that year’s gains. As a market call, December rose in four years and fell in four from 2018 to 2025. This page is information for comparison and not a recommendation about any holding.
What is the last day to sell stock for a tax loss this year?
For exchange-traded shares, the sale needs a trade date on or before December 31. Settlement can fall in the new year.
Do stocks go down in December?
Not reliably. From 2018 to 2025 the S&P 500 rose in four Decembers and fell in four.
Can I sell a stock for a loss and buy it back in January?
Only if you wait more than 30 days. Buying the same or a substantially identical security within 30 days before or after the sale triggers the wash sale rule, which defers the loss.
Should I sell my winners in December or January?
Selling in January moves the tax on the gain into the following year. Whether a holding should be sold at all is a separate question from the date.
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This page is an information baseline for comparison only. It is not investment advice and not a recommendation to buy, sell, replace, or transfer any specific asset, account, or firm. Past performance does not guarantee future results. All figures shown are illustrative.