Hi,
I have a couple simple style-related questions regarding changing funds and wanted to get some input:
1) I understand using tax-loss harvesting to help change assets from one fund to another similar one you'd prefer. How do you approach this for assets that are doing well? For example, earlier this year I bought several lots of FISVX before changing to AVUV for small cap value (funds will be long-term in November-January). I have reasons to prefer AVUV to FISVX long-term and was considering (once it switches to long-term) either swapping FISVX for AVUV or selling it to cover my backdoor IRA contribution in January; however FISVX is currently performing well. If you suspect the long-term returns will be higher from switching funds, would you still sell at a gain, or let it ride? Factoring in dividends, the two funds have about the same total costs (in taxable), and the long-term capital gains would depreciate the money by only a few %; I figure any switch should be done sooner rather than later to minimize taxes.
2) Dumb question, but as far as I can tell there is no issue with selling funds within a backdoor IRA and using that money to buy a different fund within the IRA (i.e. not withdrawing it)? For example I could sell total US and buy the equivalent in total international without concerns?
Thanks.
I have a couple simple style-related questions regarding changing funds and wanted to get some input:
1) I understand using tax-loss harvesting to help change assets from one fund to another similar one you'd prefer. How do you approach this for assets that are doing well? For example, earlier this year I bought several lots of FISVX before changing to AVUV for small cap value (funds will be long-term in November-January). I have reasons to prefer AVUV to FISVX long-term and was considering (once it switches to long-term) either swapping FISVX for AVUV or selling it to cover my backdoor IRA contribution in January; however FISVX is currently performing well. If you suspect the long-term returns will be higher from switching funds, would you still sell at a gain, or let it ride? Factoring in dividends, the two funds have about the same total costs (in taxable), and the long-term capital gains would depreciate the money by only a few %; I figure any switch should be done sooner rather than later to minimize taxes.
2) Dumb question, but as far as I can tell there is no issue with selling funds within a backdoor IRA and using that money to buy a different fund within the IRA (i.e. not withdrawing it)? For example I could sell total US and buy the equivalent in total international without concerns?
Thanks.
Statistics: Posted by breakfastinbed — Sun Jul 28, 2024 12:19 pm — Replies 0 — Views 26