That way you don't lose your exposure to the stock for the month and you still get to reap the tax loss. Of course, if the stock tanks during the month, you may have more losses than you originally planned. They may be extremely concentrated in just a few stocks in one industry. Regular ETFs offer similar opportunities, but they tend to be less concentrated and less industry-specific. You don't want to be waiting out the 31 days in a fund, and get hit with a taxable distribution in the interim.
Some financial planners use other strategies.
One is to sell a losing stock in a taxable account and buy the same stock back in an individual retirement account. Since an IRA is a separate legal entity held by a custodian on your behalf, you, the IRA beneficiary, aren't making the trade. The custodian, usually the brokerage firm, is doing it. But that doesn't mean that the IRS wouldn't disallow the tax deduction if you should be audited. We think yes.'' Another gray-area strategy is having a relative purchase the losing stock after you sell it.