TLH or buy more? VCITX

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Topic Author
Wannaretireearly
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TLH or buy more? VCITX

Post by Wannaretireearly »

Vanguard California Long-Term Tax-Exempt Fund Investor Shares (VCITX)

Bought this about a month ago....down 8%! :(

1. If I TLH, what should I TLH to get the TLH beneift without screwing up? Also gotta factor this 6 month or less holding thing re: tax exempt interest.
2. Should I stay the course and buy more into this fund (when funds are available!).

Cheers,
WRE

<Stocks seem so much simpler than Bonds! Feel like a lot of us are figuring this out>
“At some point you are trading time you will never get back for money you will never spend.“ | “How do you want to spend the best remaining year of your life?“
coldplay221
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Re: TLH or buy more? VCITX

Post by coldplay221 »

I hold the intermediate bonds (VCAIX) and purchased it almost at the same time as you did.
~10% of my portfolio which is down about 4%. I plan on holding on to it because I have not read compelling evidence against holding it.
I too don't know a lot about bonds and stocks do seem simpler. But I am trying to be a Boglehead :?

Of course stocks are down a lot more now! But at the time I bought the bonds I thought they might actually increase in value - negative correlation and all that. But interest rates etc and here we are.
Topic Author
Wannaretireearly
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Re: TLH or buy more? VCITX

Post by Wannaretireearly »

Thx Coldplay
Any other feedback?

Cheers
“At some point you are trading time you will never get back for money you will never spend.“ | “How do you want to spend the best remaining year of your life?“
AQ
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Re: TLH or buy more? VCITX

Post by AQ »

I plan to do both. I took it it seems stablized today, so I bought more.
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Kevin M
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Re: TLH or buy more? VCITX

Post by Kevin M »

You could TLH into the national Long-Term TE fund; looks like it's dropped by about the same amount. Of course if you want to be in the CA fund for the additional state exemption, you'll want to switch back in one or two months (and hope that the price doesn't rocket back up before then).

There also are some CA muni ETFs, but they generally are more volatile than the VG fund. Take a look at CMF. There's also CXA, but it is even more volatile. These ETFs have been selling at a discount to NAV lately; there's been a thread going on this topic. Even though I actually have gains in my CA int-term and long-term TE funds, I did a little swapping into the ETFs to take advantage of the discount, but there may be dangers lurking that I don't understand.

In general, I've been a strong proponent of CDs precisely because of the risk in bonds that's been showing up lately, but I still hold about 1/3 of my fixed income in bond funds. However, I shifted from bond funds to CDs as bond fund prices were going up, not as they were going down. Other than the ETF swap mentioned above, I'm not selling any of my bond funds now. I like to sell after things have gone up, and hate to sell after they've gone down.

At least you're asking a question that shows a healthy attitude toward risk, and are not freaking out.

How big of a loss do you have? It has to be big enough to make it worth the hassle of TLH. Otherwise, I probably would just add to the fund as the cash becomes available, and of course maintain your overall stock/fixed-income AA.

Kevin
If I make a calculation error, #Cruncher probably will let me know.
AQ
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Re: TLH or buy more? VCITX

Post by AQ »

Muni ETF is surging today, and I take it a likely turning point and started to build up.. :happy
Topic Author
Wannaretireearly
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Re: TLH or buy more? VCITX

Post by Wannaretireearly »

Kevin M wrote:You could TLH into the national Long-Term TE fund; looks like it's dropped by about the same amount. Of course if you want to be in the CA fund for the additional state exemption, you'll want to switch back in one or two months (and hope that the price doesn't rocket back up before then).

There also are some CA muni ETFs, but they generally are more volatile than the VG fund. Take a look at CMF. There's also CXA, but it is even more volatile. These ETFs have been selling at a discount to NAV lately; there's been a thread going on this topic. Even though I actually have gains in my CA int-term and long-term TE funds, I did a little swapping into the ETFs to take advantage of the discount, but there may be dangers lurking that I don't understand.

In general, I've been a strong proponent of CDs precisely because of the risk in bonds that's been showing up lately, but I still hold about 1/3 of my fixed income in bond funds. However, I shifted from bond funds to CDs as bond fund prices were going up, not as they were going down. Other than the ETF swap mentioned above, I'm not selling any of my bond funds now. I like to sell after things have gone up, and hate to sell after they've gone down.

At least you're asking a question that shows a healthy attitude toward risk, and are not freaking out.

How big of a loss do you have? It has to be big enough to make it worth the hassle of TLH. Otherwise, I probably would just add to the fund as the cash becomes available, and of course maintain your overall stock/fixed-income AA.

Kevin
Thx Kevin. Loss is around 6k today. 8k y'day ?
Stay the course seems good to me. TLH seems a risky headache at present. Adding to this fund as my AA needs, hopefully while its still down, is likely what I'll do.
“At some point you are trading time you will never get back for money you will never spend.“ | “How do you want to spend the best remaining year of your life?“
Topic Author
Wannaretireearly
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Re: TLH or buy more? VCITX

Post by Wannaretireearly »

AQ wrote:Muni ETF is surging today, and I take it a likely turning point and started to build up.. :happy
Hope so AQ! :)
“At some point you are trading time you will never get back for money you will never spend.“ | “How do you want to spend the best remaining year of your life?“
Topic Author
Wannaretireearly
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Re: TLH or buy more? VCITX (CA LT tax exempt)

Post by Wannaretireearly »

Bump. So I have some fresh funds which I should really *rebalance* into VCITX, per AA
Call me crazy? or a good move at present cos its down about 10% from its high?

Bond funds are not supposed to give you heartburn!!! :confused
“At some point you are trading time you will never get back for money you will never spend.“ | “How do you want to spend the best remaining year of your life?“
The Wizard
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Re: TLH or buy more? VCITX

Post by The Wizard »

Bond funds can be expected to have flat returns (at best) over the next year or two as interest rates creep upwards...
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