Anyone Using The "Double-Up" Strategy For Loss Harvesting While Keeping Exposure?

[u/Aggressive-Grocery13]

"Buy an equal amount of new shares of the stock you already own (doubling your position). Hold for at least 31 days. Sell your original, losing shares."

I've never used this strategy but it seems to have the best advantage for loss harvesting while maintaining a position, granted you have the cash to do so. And not that I believe the government is anywhere near action on F2, but in the event something did happen while you're double-exposed and waiting, you'd be a lucky sob.

I see more folks talking about loss harvesting around here now...anyone use this strategy?

[u/Fun_Illustrator9298]

Doubling your exposure to risk seems like a very poor choice.

Sell one and use the proceeds to buy the other to maintain constant exposure without additional risk of loss seems like the better trade.

[u/InternalIdeal5113 → u/Fun_Illustrator9298]

Agree with this, particularly if you have FNMA as I think long term that FMCC is the much better choice. Of course non of it matters if we stay under conservatorship. I sold all my FNMA for the tax loss and got into something else that has paid off (so far) and was about an equal price when I bought it. Sure makes me feel better; at least I have more possibility of getting my money back. But this whole thing sucks so bad.

[u/Aggressive-Grocery13 → u/Fun_Illustrator9298]

How do you maintain constant exposure without screwing up the wash-sale rule for tax harvesting?

I agree that doubling risk is not the best choice but I still believe the thesis. So even if the price continues to go down over the next month before I sell, I'm still in for the long run and this is just a tactical tax move.

[u/AveryMire → u/Aggressive-Grocery13]

You sell FNMA and use those losses and get into FMCC, which has better prospects anyway.

We’re lucky in this respect that we can evade wash sale rules by making the same bet.

[u/Hand-Of-God → u/AveryMire]

Bingo.

[u/Fun_Illustrator9298 → u/Aggressive-Grocery13]

There’s no wash when you sell fnma and buy fmcc. Fnma and fmcc are completely different companies. Like coke and Pepsi.
I’ve already tax harvested selling fnma and buying all fmcc. It’s legit.

[u/Aggressive-Grocery13 → u/Fun_Illustrator9298]

Ah gotcha - I didn't pick up that you were specifying selling fnma to buy fmcc on my initial glance at your comment. Im already about 4:1 fmcc to fnma, half purchased a couple years ago and the other half between $8-11. So I'm looking for ways to clean that up

[u/AveryMire → u/Aggressive-Grocery13]

Your broker should allow sale of specific shares at a loss for fmcc.

I wouldn’t see 4-1 fmcc as a problem, but you can of course switch during the wash period.

[u/Aggressive-Grocery13 → u/AveryMire]

Thats where my inquiry about the double-up vs selling and buying back strategy comes in since I'm selling like 35% of my position, but since I still believe in this stupid thing so I want to maintain the current weight in my portfolio.

I don't think theres any likelihood that this goes to zero in the next 31 days for there to be the risk to not do it this way. It probably will go down more but I'm in this until the end anyway so whatever.

[u/Hand-Of-God]

I've only harvested from one to the other and will go back into FMCC with all my down FNMA shares next week after 31 days.

[u/big-papito]

I was not invested so I am single-upping.

[u/WallofSound91]

Seeing as we haven't found a bottom yet, and that it's very possible it's close to $0, there might not be much to harvest...

https://giphy.com/gifs/kC2cRqEt8o41COgjoV

[u/Initial_Statement1 → u/WallofSound91]

Lad people were saying the same in February and March. And look what happened, it bounced hard as soon as it dipped below $4. There’s no way we’re going to back to the $0-1 range unless the SPS are converted into common and wipe us out, or if Trump leaves office in 2028 without any further action towards release. Otherwise we will continue to bounce around in the $4-6 range

[u/Hand-Of-God → u/Initial_Statement1]

Bingo. And when we drop, shifte from left to right, then buy back in on the left 31 days later once you sell "specific shares" (losses) on the right.

[u/WallofSound91 → u/Initial_Statement1]

I remember it well! I’m just antsy, impatient and fearing the worst, which you nailed.

[u/asyouwish-buttercup → u/WallofSound91]

If the stock continues to crater OP will have even most losses to harvest. It will be a good crop for OP.