Gyroscopic Investing

Does anybody have any recommendations for tax loss harvesting Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX)? I am in completely taxable accounts and would love to pick off some of these losses.

VTSAX has an expense ratio of 0.04%. I want to stay at Vanguard and stay in a mutual fund to avoid spreads and longer settlement periods. So I was thinking about dumping the Total Stock Market and picking up:

70%: S&P500 Admiral VFIAX (0.04%)
15% Vanguard Mid-Cap Index Fund Admiral Shares (VIMAX) (0.05%)
15%: Small-Cap Index Admiral Shares VSMAX (0.05%)

to replace it. These are all "Blend" funds.

Any thoughts?

ahhrunforthehills wrote: ↑Wed Mar 18, 2020 12:39 pm Does anybody have any recommendations for tax loss harvesting Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX)? I am in completely taxable accounts and would love to pick off some of these losses.

VTSAX has an expense ratio of 0.04%. I want to stay at Vanguard and stay in a mutual fund to avoid spreads and longer settlement periods. So I was thinking about dumping the Total Stock Market and picking up:

70%: S&P500 Admiral VFIAX (0.04%)
15% Vanguard Mid-Cap Index Fund Admiral Shares (VIMAX) (0.05%)
15%: Small-Cap Index Admiral Shares VSMAX (0.05%)

to replace it. These are all "Blend" funds.

Any thoughts?

That would definitely keep you from having to worry about the "wash sale" rules.

Vinny

I wouldn't hesitate to just go to SP500, if you want to keep things simple. HB would have said that's where you should have been anyway.

It's what I use, not that that matters. Honestly I wouldn't hesitate to go the opposite way if I had a TLH to do. The difference between Total and SP500 is kind of noise in my book.

I've been switching to the tax-managed funds for the same index. Worked fine a couple years back. You can keep swapping back and forth between them every 31 days.

I have never tax loss harvested before and need help.

On 8/20/2019 we purchased VTMSX (Vanguard tax-managed small cap value mutual fund) in our taxable account; at the time this money represented about 7% of our nest egg (all in our GB portfolio - we have no VP - everything is in the GB). This evening (3/18/2020) its market value to cost basis ratio is about 0.66. Schwab's "lot details" show its holding period as "short term" which I guess simply means that I've held it less than a year.

Question 1: If I tax loss harvest, what are some good choices of funds to shuffle the funds into? I'm leaning toward preferring an ETF, but a mutual fund is ok too. I didn't like paying Schwab's $50 fee to buy VTMSX which is partially why I'm leaning toward an ETF replacement.

Question 2: Must our fund choice also be different than the funds in our tax deferred (401k 403b, 457, 401a, inherited IRA and rollover IRAs) and tax free (Roths and HSAs) accounts?

Question 3: Is the history of where this money came from, and its cost bases and values from those previous investments important?

For a sense of its history, the money began as about 33% of our money market account in the local credit union in the middle of 2018. Then we ignorantly signed up with Financial Engines (recommended by my employer) who invested this money using their approach. Then around Thanksgiving we canned FE but left the money invested in their investments while we figured out where to go next. Then over the next few months we sold ourselves on the PP and then the GB and finally sold the FE investments in May 2019. As part of our GB, we bought AAAU and physical (gold) and T-bills (cash) in our brokerage account. I then became concerned about not having any gold in Roth (or tax deferred) for rebalancing later. So I sold some AAAU in the brokerage, and used the proceeds to buy SLYV (SPDR Small Cap Value ETF). To balance this asset-allocation wise, I sold some SLYV in my Roth and used the proceeds to buy some AAAU in the Roth. A week or two later I decided (probably mistakenly I now think) that, because VTMSX is "tax-managed," to sell the SLYV in the brokerage and use the proceeds to buy VTMSX. Now, the VTMSX is what I'm wondering if I can tax loss harvest. All of this movement I chalk up to learning. And I don't know if I should trace the history of the basis back to mid 2018 when we took it out of our money market account in the local credit union.

Thank you in advance for sharing your knowledge!

2 - Yes except perhaps other tax-deferred accounts than IRAs.

3 - No but beware wash sales!

Not responsible for any mistake above - I am no tax person!

Edited as my answer to 1 was SV-centric.

Read the IRS publication...we have google the fount of all knowledge.

Kbg wrote: ↑Thu Apr 02, 2020 9:42 pm Read the IRS publication...we have google the fount of all knowledge.

Or, "Bing it!"

Vinny

Vanguard VOO or S&P 500 correlate to total market.

MangoMan wrote: ↑Fri Apr 03, 2020 11:13 am

vnatale wrote: ↑Thu Apr 02, 2020 10:47 pm

Kbg wrote: ↑Thu Apr 02, 2020 9:42 pm Read the IRS publication...we have google the fount of all knowledge.

Or, "Bing it!"

Vinny

Why do you think Bing is superior to Google? Or is it just that you'd rather have Bill Gates spying on you than Larry Page and Sergey Brin?

I bought some personal finance software from someone who had created it. While going through his documentation for it he stated the Bing was the superior search engine to Google. And, he pointed you toward a blind test wherein you'd enter in your search teams and you'd get a side-by-side comparison of the Google and Bing results. I decided that that I liked the Bing results better than the Google results have been using it exclusively since (around 2013). The only time I use Google search is to search within a book - Google books. Otherwise it is always Bing.

I just did a search for that "blink" internet search test but it seems it no longer exists.

And, I always cringe whenever anyone either writes or says, "Google it" "Do a Google search", when what they really mean is "do an internet search".



Vinny

Made a Search Engine Thread
↳ viewtopic.php?f=9&t=12496&p=237719#p237719