Market crashes - Sell VTSAX and buy FSKAX

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Topic Author
hornet74
Posts: 9
Joined: Sun Mar 31, 2019 5:19 pm

Market crashes - Sell VTSAX and buy FSKAX

Post by hornet74 » Sun Apr 14, 2019 7:56 am

I am still new here, trying to figure out how to get my AA together and make a plan. If the market does take a nasty downturn, does it go against the strategy to sell one total stuck fund and immediately buy another? What if the market dropped x% and I sold my VTSAX and bought FSKAX? If it dropped another 20 I sold FSKAX and bought SWTSX (Or something similar). Is this against the Boglehead's "rules"?

blackholescion
Posts: 39
Joined: Fri Mar 22, 2019 6:41 pm

Re: Market crashes - Sell VTSAX and buy FSKAX

Post by blackholescion » Sun Apr 14, 2019 8:13 am

No, this is called tax loss harvesting.

https://www.bogleheads.org/wiki/Tax_los ... harvesting

Speak with a qualified tax professional to ensure that your rebuys are significantly different enough from your original holdings so you can actually take advantage.

rkhusky
Posts: 6495
Joined: Thu Aug 18, 2011 8:09 pm

Re: Market crashes - Sell VTSAX and buy FSKAX

Post by rkhusky » Sun Apr 14, 2019 8:28 am

Only if these funds are in a taxable account. And the funds have dropped far enough to have a capital loss.

nolesrule
Posts: 1189
Joined: Thu Feb 26, 2015 10:59 am

Re: Market crashes - Sell VTSAX and buy FSKAX

Post by nolesrule » Sun Apr 14, 2019 9:16 am

blackholescion wrote:
Sun Apr 14, 2019 8:13 am

Speak with a qualified tax professional to ensure that your rebuys are significantly different enough from not substantially identical to your original holdings so you can actually take advantage.
I edited the first response to make it more accurate. :beer

And yes, it only becomes an issue that may matter if the sale for a loss is in a taxable account. Otherwise, you can switch all you want.

User avatar
grabiner
Advisory Board
Posts: 23990
Joined: Tue Feb 20, 2007 11:58 pm
Location: Columbia, MD

Re: Market crashes - Sell VTSAX and buy FSKAX

Post by grabiner » Sun Apr 14, 2019 10:49 am

The reason this does not go against the Bogleheads investment philosophy is that you are not really selling. You sell stock fund A to buy stock fund B, so that if the market recovers, you still get the same benefit with A and B rising together.
Wiki David Grabiner

stan1
Posts: 6712
Joined: Mon Oct 08, 2007 4:35 pm

Re: Market crashes - Sell VTSAX and buy FSKAX

Post by stan1 » Sun Apr 14, 2019 11:05 am

I prefer to use ETFs such as VTI, SCHB, and ITOT. They can all be purchased without commissions or transaction fees at Vanguard, M1 Finance, Merrill Edge, and other low cost brokerage platforms. I prefer ETFs because they separate the security from the platform. I find that to be useful in taxable accounts. Others place less value on this.

Post Reply