Avoid the wash sale rule

When you sell securities at a loss, you cannot take the loss if you acquire substantially identical securities within 30 days before or after the date of sale. To maintain your investment position, you’ll have to wait out the 30 days to reacquire the same stock or mutual fund shares. For bonds, however, you can buy similar ones—as long as they vary slightly by maturity, interest rate, or issuer, they’re not identical and the wash sale rule doesn’t apply. Caution: Factor in commissions and market swings in deciding on this approach.