Mark Hulbert, writing for MarketWatch on Sept. 21, 2026, highlights a seasonal trading strategy that targets stocks suppressed by year-end tax-loss selling.
Hulbert argues that the final quarter of the year often drives certain stocks to artificially low prices as investors sell positions to offset capital gains for tax purposes. Historically, these depressed stocks tend to rebound in January once the selling pressure subsides.
Jeffrey Hirsch of the Stock Trader’s Almanac has referred to this pattern as “Wall Street’s Only ‘Free Lunch,'” noting its reliability as a short-term trade. Hulbert suggests that now is an opportune time for investors to begin identifying and preparing for positions in these potentially recovering stocks ahead of the new year.
The article notes that while the strategy is historically strong, it requires careful selection of the underlying securities and timing of entry points.
Great reminder to look beyond the December noise. I’m starting my watchlist now rather than waiting for January chaos.
I tried this last year and got burned by a stock that kept dropping. Beaten down doesn’t always mean going up.
Jeffrey Hirsch has been saying this for decades. It feels less like free lunch and more like hard work picking winners.
Is this strategy still reliable in 2026 with all the algorithmic trading? I wonder if the edge has faded.
Tax-loss selling is a classic seasonal play, but timing the entry before January can be tricky.