Newbie TLH and playing the market

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Topic Author
cookienadal
Posts: 34
Joined: Tue Aug 16, 2022 3:13 pm

Newbie TLH and playing the market

Post by cookienadal »

I’m new to investing out of IRAs.
My IRA is Vanguard Target 2045
I also have small 401k with Target 2035

I in last two months opened in taxable
55% VTI
15% VXUS
20% BNDW
10% VGSH

Since VTI and VXUS so low I want to put more in VTI by selling VXUS and using that money to buy more VTI

I think TArget funds have components of VXUS so is this ok for TLH?

Does this sound like a decent strategy. I just want some more of discount VTI without more actual investment.
livesoft
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Joined: Thu Mar 01, 2007 8:00 pm

Re: Newbie TLH and playing the market

Post by livesoft »

This is OK to do. You are just changing your US:foreign equity ratio.

TLH (tax-loss harvesting) is actually something else really.
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Topic Author
cookienadal
Posts: 34
Joined: Tue Aug 16, 2022 3:13 pm

Re: Newbie TLH and playing the market

Post by cookienadal »

There would be a loss though such that any gains could be reduced? Of course, I won’t have any gains this year more than likely
tashnewbie
Posts: 3169
Joined: Thu Apr 23, 2020 12:44 pm

Re: Newbie TLH and playing the market

Post by tashnewbie »

cookienadal wrote: Thu Sep 22, 2022 9:03 am There would be a loss though such that any gains could be reduced? Of course, I won’t have any gains this year more than likely
If you're selling VXUS at a loss, then yes, you would be realizing a loss. That loss would offset any realized gains this year, and if there's more loss than gains (or you don't realize any gains), the loss would offset ordinary income up to $3k.

But this isn't generally what people think about when they say TLH. That involves selling something at a loss and buying a similar but not "substantially identical" fund. Example: selling VXUS and buying VEU or VEA.
Topic Author
cookienadal
Posts: 34
Joined: Tue Aug 16, 2022 3:13 pm

Re: Newbie TLH and playing the market

Post by cookienadal »

Got it. If I did buy vEU would there be a problem if those funds were in my 401K by way of a Target 2045.
Topic Author
cookienadal
Posts: 34
Joined: Tue Aug 16, 2022 3:13 pm

Re: Newbie TLH and playing the market

Post by cookienadal »

And outside of TLH would it be a good move since I man undecided between allocation between VTI/VXUS
livesoft
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Re: Newbie TLH and playing the market

Post by livesoft »

cookienadal wrote: Thu Sep 22, 2022 9:50 am Got it. If I did buy vEU would there be a problem if those funds were in my 401K by way of a Target 2045.
No.
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tashnewbie
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Re: Newbie TLH and playing the market

Post by tashnewbie »

cookienadal wrote: Thu Sep 22, 2022 9:52 am And outside of TLH would it be a good move since I man undecided between allocation between VTI/VXUS
You first need to figure out what you want your US:int'l allocation to be. That'll dictate what you should buy with the money from selling VXUS at a loss.
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