The end of the year may present opportunities to buy stocks at a discount

It is expected that some stocks may drive the investor into a loss. Investors of all sizes make use of a strategy called "Tax-Loss Harvesting". I am not going to pretend I am an accountant, so I don't use this strategy for the simple fact that I wouldn't know exactly what I am doing and how.

What is important, though, is how this strategy works and why it may lead us to opportunities to buy stocks at a lower price. Investors using this strategy, in short, sell some losing stocks to realize the losses (yes, realize the losses) so they can offset the gains on other stocks and deduct for income taxes.

Because at the end of the year is the last possible time someone can sell stocks to realize the losses and offset the taxes, it may present people outside the markets with opportunities to buy stocks at a discount. A stock that went down could probably present a discount because the losing investors could sell it even more to realize the losses.

I had some spare change and I used it to buy stocks at the lowest price they have been all year (mostly small caps) and they already recovered a little bit, which leads me to believe I was not the only one waiting for the big players to realize their losses in order for me to get in.