As the year comes to a close and investors square up their portfolios, many may look to sell out of losing positions for tax purposes.
That could mean further weakness for beaten-down assets in the short-term, but may also present attractive opportunities for those looking to snatch up underperforming assets at a discount.
Buying assets that others have sold for tax purposes "most certainly is something that can be very useful at this time of year," said John Stoltzfus, chief market strategist at Oppenheimer. "I think it's a very good opportunity if you have a picture of where you think we're going" in the year ahead.
The idea behind tax-related selling is that individuals who have experienced capital gains in a calendar year can offset the taxes paid on those gains by showing losses on other investments. For that reason, in a year where many thing have performed well, badly performing assets can add to selling pressure.
Tax selling was certainly blamed for gold's plunge at the end of last year.The S&P 500 was up 27 percent in the year to December, while gold was down 25 percent during that time. Those who wanted to offset taxes on sales of winning stocks were assumed to sell gold for a loss—which would explain why gold continued to drop in December, and hit the dead lows of the year on Dec. 31st.
This time around, the obvious candidate for tax selling is crude oil, which has fallen almost 50 percent from its highs on the year.
Just as gold simply kept dropping at the end of 2013, "I would expect that you would see the same thing for the crude oil market. There [are] a lot of traders, a lot of positions, that are long right now, and they're going to want to liquidate before the end of the year," said NYMEX energy trader Anthony Grisanti of GRZ Energy.
Of course, it hasn't been a great year for many commodities. Gold, too, is off of its highs, which makes Bill Baruch of iiTrader think it could succumb to tax-related selling in the sessions ahead. Still, Baruch says the better trade isn't going short for the short-term, but looking for the buying opportunities that tax-pressured selling could create.
"What you want to take away from this is not only a bearish bias in underperforming commodities towards the end of the year, but also the late holiday gift it leaves," he told CNBC via email.
Investors can easily snap up battered commodities at the start of 2015, Baruch said. Additionally, "those commodities can also see a further boost as fund managers look to reallocate into underperforming assets, creating what can potentially be a bullish bias to start the year."