oh, drat, screwed up - is there a quick fix?

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epilnk
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Joined: Wed Apr 18, 2007 7:05 pm

oh, drat, screwed up - is there a quick fix?

Post by epilnk » Sun Mar 01, 2009 3:57 pm

I just transferred a small amount into VTSAX by mistake. For some reason I forgot that I'd decided to TLH the rest of this account first. (That cup of coffee must not have been strong enough for a rainy Sunday morning.) Of course I realized my mistake approximately two seconds after hitting the confirm button.

This really messes me up - I'm having a hard enough time staying the course in a downward market without sticking myself with another two month frequent trading window into my primary taxable account! Is there some way to undo a pending transaction on a weekend?

Linda

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Dale_G
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Location: Central Florida - on the grown up side of 81

Post by Dale_G » Sun Mar 01, 2009 4:33 pm

Sorry Linda, there is no way to undo your transaction.

Dale
Volatility is my friend

DSInvestor
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Post by DSInvestor » Sun Mar 01, 2009 4:53 pm

Linda, I don't think a purchase of VTSAX triggers any frequent trading restriction. I believe the restrictions are activated when you sell or exchange out of a fund. If you need to sell VTSAX next week to harvest losses, you should be able to do it.

Here's the text from the prospectus of VTSAX.
Frequent-Trading Limits
Because excessive transactions can disrupt management of a fund and increase the fund’s costs for all shareholders, Vanguard places certain limits on frequent trading in the Vanguard funds. Each Vanguard fund (other than money market funds, short-term bond funds, and ETF Shares) limits an investor’s purchases or exchanges into a fund account for 60 calendar days after the investor has redeemed or exchanged out of that fund account.
For Vanguard Retirement Investment Program pooled plans, the policy applies to
exchanges made by participants online or by phone.
The policy does not apply to the following:
• Purchases of shares with reinvested dividend or capital gains distributions.
• Transactions through Vanguard’s Automatic Investment Plan, Automatic Exchange
Service, Direct Deposit Service, Automatic Withdrawal Plan, Required Minimum
Distribution Service, and Vanguard Small Business Online®.
• Redemptions of shares to pay fund or account fees.
• Transaction requests submitted by mail to Vanguard from shareholders who hold
their accounts directly with Vanguard. (Wire transactions and transaction requests
submitted by fax are not mail transactions and are subject to the policy.)
• Transfers and re-registrations of shares within the same fund.
• Purchases of shares by asset transfer or direct rollover.
• Conversions of shares from one share class to another in the same fund.
• Checkwriting redemptions.
• Section 529 college savings plans.
• Certain approved institutional portfolios and asset allocation programs, as well as
trades made by Vanguard funds that invest in other Vanguard funds. (Please note that
shareholders of Vanguard’s funds of funds are subject to the policy.)

epilnk
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Joined: Wed Apr 18, 2007 7:05 pm

Post by epilnk » Sun Mar 01, 2009 9:17 pm

DSInvestor wrote:Linda, I don't think a purchase of VTSAX triggers any frequent trading restriction. I believe the restrictions are activated when you sell or exchange out of a fund. If you need to sell VTSAX next week to harvest losses, you should be able to do it.
Thanks - of course you're right. It's sales that mess me up, not purchases. I can't buy back into the fund I just transferred out of but I can simply choose a new fund as my temporary TLH holding fund. So the shared I bought today just get sold after a day - no biggie.

I exchanged shares today because it's on the calendar from the last TLH, and I'm trying to remain disciplined during a downturn. But it's perhaps more important to recognize that sticking to the plan doesn't mean I have to buy on a day my head is full of cotton. Either that or I should just look into a stronger brand of coffee.

Linda

ruud
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Location: san francisco bay area

Post by ruud » Sun Mar 01, 2009 10:40 pm

epilnk wrote:So the shared I bought today just get sold after a day - no biggie.
*then* you can't change back into VTSAX again for 2 months.
"A good plan, violently executed now, is better than a perfect plan next week."

minesweep
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Location: PA

Post by minesweep » Mon Mar 02, 2009 8:20 am

Linda,

If I understand you correctly you want to TLH the same fund that you just made a purchase in. If so, then I believe that you need to wait 30 days from the date of the purchase before doing the tax loss harvest to avoid a wash sale.
Wash Sales

You cannot deduct losses from sales or trades of stock or securities in a wash sale.
A wash sale occurs when you sell or trade stock or securities at a loss and within 30 days before or after the sale you:

1. Buy substantially identical stock or securities,
2. Acquire substantially identical stock or securities in a fully taxable trade,
3. Acquire a contract or option to buy substantially identical stock or securities, or
4. Acquire substantially identical stock for your individual retirement account (IRA) or Roth
Wash Sale

Mike

Ken Reckers
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Post by Ken Reckers » Mon Mar 02, 2009 11:40 am

The policy does not apply to the following:
• Transaction requests submitted by mail to Vanguard from shareholders who hold their accounts directly with Vanguard.
Within the 60 days, you still can buy by mail, just not the "cotton head" online way.

(Wash sale still applies w/in 30, though.)

DSInvestor
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Joined: Sat Oct 04, 2008 11:42 am

Post by DSInvestor » Mon Mar 02, 2009 11:49 am

Linda, if you sell all remaining shares of VTSMX within 30 days of the last purchase, you will have a wash sale but only for those shares that were purchased in the wash sale window. I recently sold some shares of a stock in my fidelity brokerage acct and the fidelity's tax info page indicated that a small portion of the loss was disallowed (wash sale) and it turned out to be shares acquired through dividend reinvestment on JAN 15. I sold all shares on JAN 26.

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