Lieutenant.Columbo wrote:do you have to pay attention to not selling when the fund's price has gone down as a result of the upcoming distribution?
triceratop wrote:I don't follow; the goal is to avoid increasing AGI. What that has to do with the fund price going "down as a result of the upcoming distribution" is not clear. And that happens instantaneously at ex-dividend, which is why in the example provided (see above) he buys VTI ex-dividend.
You might have followed hadn't you assumed I know as much as you do about this. I didn't know exactly when a fund value goes down as a result of the distribution (I see now that both occur simultaneously, which makes sense). If they didn't happen simultaneously, then (and livesoft's notwithstanding) one would have to figure out if the loss incurred when potentially selling when the fund has lost value is overridden by avoiding the AGI increase and, hence, my question above.
livesoft wrote:Of course not. I love to sell when the fund's price has gone down because either
(a) I realize a lower amount of capital gains and thus use up less of my carryover losses, or
(b) I realize a higher amount of capital losses and thus add more to my carryover losses.
My "replacement fund" will go up or down essentially the same relative amount as the fund I sold as long as I do the buy and sell at about the same time. Of course, I try to buy at a lower relative price when I can and that happens often enough. (Do not forget that I love Love LOVE to do market timing!)
thank you for sharing your well-thought strategy.
Lt. Columbo: Well, what do you know. Here I am talking with some of the smartest people in the world, and I didn't even notice!