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What investors can do with losing positions right now: Liz Young

Sofi Head of Investment Strategy Liz Young breaks down what investors should do with their losing positions.

Video transcript

LIZ YOUNG: There is a thing called tax loss harvesting. You could do that if you have some tax gains. I don't know how many people have gains this year. But if you have some gains that you'd like to offset, you can do something like that.

You could sell something that's down in a certain space and buy it something that you-- buy something that you think replaces it more or less and still participate in upside that would happen. Or you can replace it with something like a retail ETF. But what I would actually say is that we're already seeing some nice optimism in the consumer discretionary names. The two names that we're talking about really were in the Staples category but just in the consumer category overall.

What could happen is that if fear really peaks and we find out you know what, we're going into a recession or we're in one and it's going to get worse, what we probably start to hear in earnings season, especially from consumer discretionary is them guide down. And the market does have to wade through that, so it could go down further. So unfortunately you're down 35%, maybe it goes down more. But that also then is likely a good opportunity and a good entry point.

So I would say I wouldn't lock in all your losses because you can't get those back once you sell out of it. And really think about if you can take advantage of tax loss harvesting and that's something that you want to do, maybe a little bit. But I wouldn't lock it all in as a loss right now.