Long ago, when Americans mostly owned stocks and mutual funds in accounts outside of retirement plans and IRAs, December was known as the tax-loss selling season. This was the practice of “harvesting” losses to offset gains, and a limited amount of ordinary income.

But these days, the majority of individual investments are held in tax-sheltered retirement accounts, where all withdrawals will eventually be taxed as ordinary income. As of December 31, 2022, a total of $37.8 trillion was held in U.S. retirement plans and accounts, of which $26.3 trillion was in employer-sponsored plans and $11.5 trillion was in IRAs, according to the Congressional Research Institute.

Taxes still matter to those who sell individual stocks or mutual funds not owned inside a retirement account. They can still benefit from lower capital gains tax rates. Be careful to avoid the “wash sale” rules, which say that if the stock (or a similar security) is repurchased within 30 days, the loss will be disallowed. And those who own mutual funds outside of retirement accounts, must also pay taxes on gains and income distributed by their funds.

It can be argued that less tax loss harvesting has taken some of the December selling pressure off the stock market in recent years. In fact, according to the Stock Trader’s Almanac, December is historically one of the market’s best-performing months, especially in a December preceding an election year.

According to the Almanac, December ranks (on average) as the third-best month of the year (going back to 1950). For the Dow Jones Industrial Average, the gains averaged 1.4%, edged out slightly by the S&P 500, which racked up an average gain of 1.5% in the month of December in the last almost 75 years.

In fact, the DJIA advances in December 71% of the time, and that is the highest winning percentage of any month.

And in the December preceding an election year, the gains tend to be even larger, with the Dow gaining 2.7% and the S&P gaining an average of 2.9% in those pre-election year Decembers. So, it’s likely that Santa Claus will bring profits, not coal, for traders’ stockings in the coming weeks.

While these historic returns add spice to the conversation, it’s important to remember the trends are not guaranteed to hold. You don’t have to go back too far — December 2018 — to see a pre-election December that surprised with a 9.2% plunge in the Dow.

There’s one more advantage to December. There’s extra volume and liquidity in the month, as traders and funds even up their positions for their year-end trading reports, and resulting bonuses. So December is the perfect time to assess your current positions and make adjustments to start the new year with a clean slate.

While the tax consequences might not matter in your IRA or 401(k), the emotional benefit of leaving behind your losers can get you off to a better start in 2024.

This is the time to ask yourself why you still own that fund or stock or ETF. Are the reasons still valid? Are you hanging on in hopes of getting even? How annoying will it be to see that mistake riding on your monthly statement all through the next year? If you didn’t already own it, would you be a buyer of that stock now?

Perhaps it would be better to get out of it now, take your losses, and never look back! That will free up your emotions and intellect, not to mention your money, to move in a different direction.

Even if you make no changes in December, this is still a great time to take a closer look at what you own.

Go to CNBC.com or Marketwatch.com or Morningstar.com and look up the stock or fund symbol. You’ll see a chart of the price range this past year. And you can see the latest news and analysts’ comments on the company.

It’s your money, and you should know what you own and how it fits into your overall investment portfolio — no matter how large or small your holdings. There’s a wealth of information out there. Use it to add to your wealth. And that’s The Savage Truth.