Taxable Account AA problem

[rvawaywego]

So, over the last 18+ years my two EFT have grown at different rates. What was +/- 70 / 30 split of SPY being 70% and QQQ being 30% has grown to be more like 50% - 50%. Thinking I am a bit heavy in QQQ exposure but if I rebalance I am going to pay capital gains. Is it worth it to rebalance back to my original AA?

TIA

[count damoney]

So, over the last 18+ years my two EFT have grown at different rates. What was +/- 70 / 30 split of SPY being 70% and QQQ being 30% has grown to be more like 50% - 50%. Thinking I am a bit heavy in QQQ exposure but if I rebalance I am going to pay capital gains. Is it worth it to rebalance back to my original AA?

TIA

I would not incur taxes just to rebalance.
Direct all new investments to the underweighted category

[steadyosmosis]

(reconsidered)

[sailaway]

So, over the last 18+ years my two EFT have grown at different rates. What was +/- 70 / 30 split of SPY being 70% and QQQ being 30% has grown to be more like 50% - 50%. Thinking I am a bit heavy in QQQ exposure but if I rebalance I am going to pay capital gains. Is it worth it to rebalance back to my original AA?

TIA

Do you have anything similar to qqq in tax sheltered accounts that you could sell for rebalancing?

[HomeStretch]

… but if I rebalance I am going to pay capital gains. Is it worth it to rebalance back to my original AA? …

How much is the estimated capital gain and what are the estimated taxes you would pay on the dollar amount of the rebalancing transaction?

Are you contributing to or withdrawing from the Taxable account?

[rvawaywego]

So, over the last 18+ years my two EFT have grown at different rates. What was +/- 70 / 30 split of SPY being 70% and QQQ being 30% has grown to be more like 50% - 50%. Thinking I am a bit heavy in QQQ exposure but if I rebalance I am going to pay capital gains. Is it worth it to rebalance back to my original AA?

TIA

I would not incur taxes just to rebalance.
Direct all new investments to the underweighted category

Doing that now. I am still adding to the account after my Roth etc. Thanks for the feedback.

[rvawaywego]

So, over the last 18+ years my two EFT have grown at different rates. What was +/- 70 / 30 split of SPY being 70% and QQQ being 30% has grown to be more like 50% - 50%. Thinking I am a bit heavy in QQQ exposure but if I rebalance I am going to pay capital gains. Is it worth it to rebalance back to my original AA?

TIA

Do you have anything similar to qqq in tax sheltered accounts that you could sell for rebalancing?

Good Idea. I do have some that would help but not a big dent. Will do this. Thnxs

[stan1]

Make sure you are using a Donor Advised Fund such as Fidelity Charitable for your charitable contributions if not taking RMDs.
Donate some of the QQQ to your DAF, maybe a few years worth of contributions.

[bonesly]

So, over the last 18+ years my two EFT have grown at different rates. What was +/- 70 / 30 split of SPY being 70% and QQQ being 30% has grown to be more like 50% - 50%. Thinking I am a bit heavy in QQQ exposure but if I rebalance I am going to pay capital gains. Is it worth it to rebalance back to my original AA?

Others have suggested against incurring capital gains just to rebalance, but I have a different question. Why would you want QQQ when it's 84.2% overlapped with SPY?

If you want a sector bet, you'd likely be better off with a Pure-Tech Sector ETF (see the 7 Best Tech ETFs from US News & World Report) than an ETF that just follows one of the exchange indexes (in this case the top-100 of the NASDAQ Exchange rather than the top-100 of the NY Stock Exchange or the Chicago Exchange).

Not that I'm a fan of sector tilts, but if you're going to tilt, there are better ways than QQQ.

[rvawaywego]

So, over the last 18+ years my two EFT have grown at different rates. What was +/- 70 / 30 split of SPY being 70% and QQQ being 30% has grown to be more like 50% - 50%. Thinking I am a bit heavy in QQQ exposure but if I rebalance I am going to pay capital gains. Is it worth it to rebalance back to my original AA?

Others have suggested against incurring capital gains just to rebalance, but I have a different question. Why would you want QQQ when it's 84.2% overlapped with SPY?
GREAT POINT!

If you want a sector bet, you'd likely be better off with a Pure-Tech Sector ETF (see the 7 Best Tech ETFs from US News & World Report) than an ETF that just follows one of the exchange indexes (in this case the top-100 of the NASDAQ Exchange rather than the top-100 of the NY Stock Exchange or the Chicago Exchange).

Not that I'm a fan of sector tilts, but if you're going to tilt, there are better ways than QQQ.

Thank you.

[rvawaywego]

Others have suggested against incurring capital gains just to rebalance, but I have a different question. Why would you want QQQ when it's 84.2% overlapped with SPY?

GREAT POINT!

If you want a sector bet, you'd likely be better off with a Pure-Tech Sector ETF (see the 7 Best Tech ETFs from US News & World Report) than an ETF that just follows one of the exchange indexes (in this case the top-100 of the NASDAQ Exchange rather than the top-100 of the NY Stock Exchange or the Chicago Exchange).

Not that I'm a fan of sector tilts, but if you're going to tilt, there are better ways than QQQ.
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Thank you.
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