Gyroscopic Investing

I've been DCAing almost monthly into PRPFX for 3 years in my taxable account and now due to the September drop I got some of the tax lots in the red.

I'm trying to decide whether I just stick with these shares or sell them to get the tax write-off. In case of the latter the second question pops up: is there a good substitute for PRPFX to put the sale proceeds for 31 day and then jump back into PRPFX? Maybe total bond fund or GNMA? 

Thanks!

What is preventing you from harvesting the loss? I wish that HB would have discussed this in his literature or podcasts as the benefits outweigh the drawbacks.  Place the proceeds in Cash and wait out the 30 days before re-investing in the fund.

buddtholomew wrote: What is preventing you from harvesting the loss? I wish that HB would have discussed this in his literature or podcasts as the benefits outweigh the drawbacks.  Place the proceeds in Cash and wait out the 30 days before re-investing in the fund.

I just want to avoid losing on a possible market rise that might happen in January if I sit in cash. Although in case of PRPFX any jump (up or down) would be smoothed by the non-stock assets in the fund.

foglifter wrote: I just want to avoid losing on a possible market rise that might happen in January if I sit in cash. Although in case of PRPFX any jump (up or down) would be smoothed by the non-stock assets in the fund.

Sell some of it and buy a 4 x 4 HB PP.

Adam1226 wrote:

foglifter wrote: I just want to avoid losing on a possible market rise that might happen in January if I sit in cash. Although in case of PRPFX any jump (up or down) would be smoothed by the non-stock assets in the fund.

Sell some of it and buy a 4 x 4 HB PP.

Well, that would mean:
- headache with gold ETFs/CEFs (tax reporting/no e-file for GTU or collectible tax rate in case of gold ETFs)
- losing the tax efficiency of PRPFX (which yields less than 1% a year)
- more fees (bond and gold ETFs)

Or do you mean turning completely to HBPP? 

foglifter wrote:

buddtholomew wrote: What is preventing you from harvesting the loss? I wish that HB would have discussed this in his literature or podcasts as the benefits outweigh the drawbacks.  Place the proceeds in Cash and wait out the 30 days before re-investing in the fund.

I just want to avoid losing on a possible market rise that might happen in January if I sit in cash. Although in case of PRPFX any jump (up or down) would be smoothed by the non-stock assets in the fund.

The market could just as easily continue its downward trend. Come January, you will be able to purchase PRPFX at a lower price and have the tax deduction.If you are concerned about missing a year-end rally, take Adam's advice and invest the proceeds in the 4x25 mix. This may be more of an inconvenience if you are not committed to holding this investment for an extended period of time.

foglifter wrote:

buddtholomew wrote: What is preventing you from harvesting the loss? I wish that HB would have discussed this in his literature or podcasts as the benefits outweigh the drawbacks.  Place the proceeds in Cash and wait out the 30 days before re-investing in the fund.

I just want to avoid losing on a possible market rise that might happen in January if I sit in cash. Although in case of PRPFX any jump (up or down) would be smoothed by the non-stock assets in the fund.

The market could just as easily continue its downward trend. Come January, you will be able to purchase PRPFX at a lower price and have the tax deduction.If you are concerned about missing a year-end rally, take Adam's advice and invest the proceeds in the 4x25 mix. This may be more of an inconvenience if you are not committed to holding this investment for an extended period of time.

Thank you folks. I will probably just wait in cash. Given that the market doesn't really look like March 2009 I shouldn't lose much I guess within 30 days. 

foglifter wrote: Thank you folks. I will probably just wait in cash. Given that the market doesn't really look like March 2009 I shouldn't lose much I guess within 30 days. 

If you have any cash available, you might consider buying a few shares of PRPFX every week or so instead of selling to tax harvest. 

In the past, the pullbacks in this fund don't last long.  You may makeup in capital gains what you lose from deciding not to tax harvest...if that makes sense. 

An easy strategy if you wish to continue PRPFX but make  a bit of a change. 25% GLD and 75%  VWINX. VWINX is up 7 1/2 % YTD (40% stocks and 60% bonds). It might be  good time to buy gold. Gold is going back up, I can feel it!

http://www.kitco.com/ind/Holmes/holmes_dec122011.html

Graham said the ideal asset allocation was 50-50. This is close.

As for me I now own more VWINX than PRPFX. As one might guess the Vanguard fees are less. I am willing to let others do the allocations and I still have faith in Cuggino, like the 10% Swiss francs and real estate.

Can we have a YTD performance now on the classic HB? Anyone? TIA.

If you want a more detailed look at PRPFX holdings here's an up to date link:

http://blogs.marketwatch.com/great-colu ... ain-world/

pershing83 wrote: If you want a more detailed look at PRPFX holdings here's an up to date link:

http://blogs.marketwatch.com/great-colu ... ain-world/

Thanks for a link, I'm familiar with the internals of PRPFX and of course it's biggest deviation from HBPP is in the bonds area. But still it's a great choice for taxable accounts.

Your suggestion about VWINX sounds good, but I don't want to pay Fido $75 for buying Vanguard fund though. Another option I'm considering is FBALX, I'm just waiting until it pays out the dividend.