Tax-Loss Harvesting For The High-Yield BDC Sector In 2017?

Tax-loss selling (also referred to as tax-loss harvesting) involves selling investments for a loss to offset taxable gains (or income) and there is a good chance that certain business development companies ("BDCs") could see some declines over the coming weeks. BDCs experienced tax-loss selling in 2014 and 2015 but not 2016 due to the general post-election market that drove stocks higher as discussed in previous updates.
BDCs that are the most at risk for 2017 could include the ones with multiple of the following:
Overpriced compared to my short-term target prices Poor performance year-to-date 2017 Significantly down from recent highs Currently not near recent lows It is important to note that there are many types of BDC investors ranging from active traders that are willing to invest in riskier BDCs to more conservative investors that are buy and hold but may have specific tax reasons for making year-end trades.
Important 'wash sale' note: Please keep in mind that the IRS prohibits taxpayers from claiming a loss on the sale or trade of a security in a "wash sale". The rule defines a wash sale as one that occurs when an individual sells or trades a security at a loss, and within 30 days before or after this sale, buys a “substantially identical” stock or security, or acquires a contract or option to do so.
My personal plan: I only invest in higher quality BDCs and look for general market pullbacks to buy them for higher... Read more