One of the few near-certainties of the stock market is that every December, many closed-end funds get cheap. That's because investors dump losers to take tax losses before yearend. "I can't recall a year where December hasn't been the best time to buy closed-end funds," says Thomas Herzfeld, whose Miami investment firm specializes in them.rnMany closed-ends—vehicles that invest like mutual funds but are bought and sold like stocks—get so cheap, in fact, that buyers get "a very good risk-reward relationship," says Herzfeld. The funds typically rebound in January as investors come back to the market to reallocate assets and establish new positions. Their recovery can provide a windfall—say, 20% in only a month, adds Herzfeld.
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