I’m sure there’s something crucial I’m not understanding, but it seems like you’re just losing money? I’m trying to learn about investing and I’m so confused
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Yes, you’re losing money…. think of it as a consolation prize if you have a loser investment, that if you sell and realize that loss you can at least reduce your taxable gains elsewhere, and thus reduce your taxes a bit. You don’t go looking to sell at a loss, but say you bought Bed, Bath & Beyond stock and it’s never going to go back up, you might choose when to sell based on if it’ll help reduce capital gains taxes on other investments.
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