EOFY stock watch. Watch your winners vs sell your sinners?

This week global markets will focus on end-of-quarter and half-year rebalancing ,while in Australia its end of financial year (EOFY). This seasonal event can cause stock volatility but also presents opportunities for investors.

During EOFY, half-year,and quarter-end,investors and fund managers rebalance their portfolios.This may involve trimming overperforming stocks ("winners") and potentially selling losing positions ("sinners") to claim tax deductions (tax write-offs). Alternatively,they might buy underperforming stocks to realign their portfolios with their target asset allocation.

Opportunistic traders and investors can use this time to position their portfolios for the next 6-12 months.They might consider companies with strong revenue growth outlooks while also factoring in another layer of seasonality. Historically, markets tend to perform well in July, with the S&P 500 typically rallying 1.3% as capital is reinvested after being withdrawn in May and June.