Switching brokers for TLH? make sense?

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TresBelle65
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Switching brokers for TLH? make sense?

Post by TresBelle65 » Mon Mar 12, 2018 2:07 pm

My taxable account is with Ameritrade, comprised of low cost, broad index funds - total market, international, etc.
Would it make any sense to put this account under management by Betterment (or one of their competitors) in order to take advantage of tax loss harvesting? I am working full time and miss the dips...etc. I could use the tax benefit. Obviously this is not total portfolio management.

livesoft
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Re: Switching brokers for TLH? make sense?

Post by livesoft » Mon Mar 12, 2018 2:14 pm

It would not make sense to me.

I don't see how you can miss the dips even if working full time. After all, you posted on bogleheads.org and TLHing is even easier than posting on bogleheads.org.
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aristotelian
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Re: Switching brokers for TLH? make sense?

Post by aristotelian » Mon Mar 12, 2018 3:23 pm

You aren't going to get anyone on BH to tell you to go to Betterment to have a Robot do TLH for you. If you know enough to understand what TLH is, you should be able to do it yourself. Identify your funds that are in the red, and click sell. Worst case scenario, you will screw up every now and then and might not get to claim as much as you wanted. You should still come out ahead of the fees that Betterment charges (and by the way, they are a new company and there is nothing preventing them from charging .05% more next year and then .10% more the year after that, etc.)

thangngo
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Re: Switching brokers for TLH? make sense?

Post by thangngo » Mon Mar 12, 2018 3:55 pm

aristotelian wrote:
Mon Mar 12, 2018 3:23 pm
You aren't going to get anyone on BH to tell you to go to Betterment to have a Robot do TLH for you. If you know enough to understand what TLH is, you should be able to do it yourself. Identify your funds that are in the red, and click sell. Worst case scenario, you will screw up every now and then and might not get to claim as much as you wanted. You should still come out ahead of the fees that Betterment charges (and by the way, they are a new company and there is nothing preventing them from charging .05% more next year and then .10% more the year after that, etc.)
I guess I'm one of the few that have a small chunk of taxable at Betterment as an experiment and see how the robo does TLH. I learned a few tricks from it. I put 50k there with regular $500 contribution bi-weekly. TLH at Betterment works seamlessly. Fees is negligible at 50k AUM.

But I would not recommend moving the entire taxable portfolio to robo advisor. After you learn how to TLH, you'll find out how easy it is to do it at Vanguard. And you don't want to deal with all the transfer/taxable liquidation from and to robo advisor.

Chalk it up as a "saving for something later" fund at Betterment and learn TLH from there.

livesoft
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Re: Switching brokers for TLH? make sense?

Post by livesoft » Mon Mar 12, 2018 4:42 pm

I am very curious, so what are the few tricks that you have learned?

Here is a trick: One doesn't have to even worry about looking at the daily market results at all because one can have their broker e-mail them an alert when there might be a TLH and/or rebalancing possibility.
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TresBelle65
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Re: Switching brokers for TLH? make sense?

Post by TresBelle65 » Mon Mar 12, 2018 6:36 pm

What started me thinking about it was a thread I found here at Boglehead titled " Tax Loss Harvesting for Dummies" - I think it was over 30 pages long!

If Dummies like me can do it correctly, I had to wonder why it took over 30 pages for the Bogleheads to hash it through. Some of those posts were books until themselves lol.

livesoft
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Re: Switching brokers for TLH? make sense?

Post by livesoft » Mon Mar 12, 2018 6:39 pm

Some people who post at bogleheads.org are worrywarts and/or technically anal retentive want to cover every possible contingency that doesn't matter even it if occurs once every one thousand years. If they wrote up how to invest in the 3-fund portfolio then it might extend to 4 solid books and not cover everything. Or they might write up a 6-volume book set on how to switch brokers.
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MotoTrojan
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Re: Switching brokers for TLH? make sense?

Post by MotoTrojan » Mon Mar 12, 2018 10:33 pm

Putting taxable money at a Robo has the risk of them increasing fees over time. Even if you transfer in-kind, you'll be left with a mess of funds.

I'm personally happy enough to only TLH for large market declines.

thangngo
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Re: Switching brokers for TLH? make sense?

Post by thangngo » Wed Mar 14, 2018 11:55 am

livesoft wrote:
Mon Mar 12, 2018 4:42 pm
I am very curious, so what are the few tricks that you have learned?

Here is a trick: One doesn't have to even worry about looking at the daily market results at all because one can have their broker e-mail them an alert when there might be a TLH and/or rebalancing possibility.
Nothing fancy really. It's the mechanic how robo does TLH. You can open the trade confirmations to see how ETFs were sold and purchased during TLH transactions. Which lots are picked and how much. The timing of TLH so that you don't lose bigger TLH opportunities later, etc. You also find the roster of ETFs and their similar ones to exchange into when you TLH.

The regular new contributions will help with TLH. If you don't have new money contributed to taxable account, robo won't be helpful because you can TLH yourself when the market dives like it did in 2008.

I find it very helpful to see how robo does TLH. It adds to what I learned from the wiki and the discussion about TLH around here.

Again, it's not like you put the entire portfolio at robo. Just put some money in there if you want to see how it works with the robo.

livesoft
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Re: Switching brokers for TLH? make sense?

Post by livesoft » Wed Mar 14, 2018 2:18 pm

Thanks for the reply on "tricks" which I guess are just seeing someone else do it.
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thangngo
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Re: Switching brokers for TLH? make sense?

Post by thangngo » Wed Mar 14, 2018 2:21 pm

livesoft wrote:
Wed Mar 14, 2018 2:18 pm
Thanks for the reply on "tricks" which I guess are just seeing someone else do it.
Yeah, "tricks" ... sorta like how we set alert email from Vanguard when TLH/rebalancing band is met.

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