The market will probably drop in the last quarter of 2012

The capital gains tax rate is increasing in 2013. The taxes that investors pay on winning stock positions will go up in 2013. So that is an incentive to sell toward the end of 2012. I think we will see a market correction at the end of this year. But is that enough to make it smart for investors to sell around the summer? It depends on the liquidity, the ease of buying and repurchasing, and your transaction costs.

Alternatively, Congress might pass a law that puts off the hike in capital gains taxes. That would make this point null.