By Sarah Morgan
Turkey is welcome on most people's plates this time of year -- but a turkey in your portfolio? While the S&P 500 (^GPSC) is up nearly 12 percent for the year so far, individual investors who have built balanced portfolios with low-cost index funds are likely in the black. But those who are betting on individual stocks might be dealing with a turkey (or two).
Who are these turkeys? One of the biggest losers individual investors so far this year, according to data from investment advisory firm SigFig, has been General Motors (GM). The automaker has been struggling all year to contain the fallout from massive recalls of cars with faulty ignition switches, which were first announced in February. The average GM investor is sitting on unrealized losses of 34 percent, or roughly $7,500.
Energy, Commodities and Marijuana
Other big losers for the year include some energy stocks. Oil prices have fallen significantly, and offshore drilling companies like Transocean (RIG) are scrapping some rigs. Investors in that stock have seen average losses of 29 percent, or just under $5,000 per investor. The other energy-sector turkeys on the list -- Westport Innovations (WPRT) and LinnCo (LNCO) -- have missed revenue targets this year, and have left investors with average losses of nearly 56 percent and 27 percent, respectively.
%VIRTUAL-WSSCourseInline-799%Falling commodity prices have also hurt metals and mining companies like Vale SA (VALE), an iron ore miner whose investors are sitting on losses of 31 percent, and Barrick Gold (ABX), whose investors have losses of just under 32 percent.
The marijuana industry is also well represented here. Investors in GrowLife (PHOT), Hemp Inc (HEMP), Cannabis Science Inc (CBIS), and Medical Marijuana Inc (MJNA) have lost between a quarter to three quarters of their original stakes. Fortunately, those initial stakes weren't too big. Even the 75 percent loss suffered by GrowLife investors only comes to an average $1,300 per investor holding the stock.
It can be difficult to let go of losers, particularly when selling means taking a substantial hit. And, of course, some of this year's turkeys could be next year's high flyers. But investors who are holding these losers do have at least one thing to be thankful for this holiday week: tax-loss harvesting. For some investors, selling out of a losing position can provide a tax break on the gains they realize elsewhere in their portfolios--some cold comfort to go with the cold turkey sandwiches we'll be eating this weekend.
To compile the list of top 10 stocks with largest unrealized losses, SigFig analyzed anonymous data from more than 750,000 users, filtering for stock holdings owned by at least 1,500 investors. We then ranked them by realized and unrealized returns by percent change relative to cost basis, as well as dollar gains/losses. This research is for informational purposes and does not constitute an investment recommendation or advice.
Sarah Morgan is a contributing writer at SigFig. Nearly a million people use SigFig to track, improve and manage over $300 billion in investments.