TLH Exchange International again ? To what ?

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Fat-Tailed Contagion
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TLH Exchange International again ? To what ?

Post by Fat-Tailed Contagion » Wed Jan 06, 2016 11:16 am

On 09/04/15 I exchanged FTSE ex-US for Total Int'l in Taxable Account.

It is down around $700 + whatever today closes at.

What should be my strategy for TLH this position ?

Thank you for all insight!

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livesoft
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Re: TLH Exchange International again ? To what ?

Post by livesoft » Wed Jan 06, 2016 11:23 am

$700 is not enough for me to do a TLH, but maybe it is for you.

So what would keep you from exchanging Total Int'l back to FTSE ex-US? I'm also curious why you are asking this question.
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Re: TLH Exchange International again ? To what ?

Post by indexfundfan » Wed Jan 06, 2016 11:42 am

Fat-Tailed Contagion wrote:On 09/04/15 I exchanged FTSE ex-US for Total Int'l in Taxable Account.
It has passed 30 days as well as Vanguard's trading limitation policy. You can simply exchange it back to FTSE ex-US.
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Fat-Tailed Contagion
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Re: TLH Exchange International again ? To what ?

Post by Fat-Tailed Contagion » Wed Jan 06, 2016 8:10 pm

livesoft wrote:$700 is not enough for me to do a TLH, but maybe it is for you.

So what would keep you from exchanging Total Int'l back to FTSE ex-US? I'm also curious why you are asking this question.
I'm asking to find out what others would do in regards to how much does it have to be to TLH.

Or any other factors that I am overlooking.

I understand that I can exchange back to FTSE Ex-US.
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Fat-Tailed Contagion
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Re: TLH Exchange International again ? To what ?

Post by Fat-Tailed Contagion » Thu Jan 07, 2016 11:31 am

Down $2,100 + whatever today's loss is.

Curious to see if that is a sufficient loss to TLH ?
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Re: TLH Exchange International again ? To what ?

Post by randomizer » Thu Jan 07, 2016 4:26 pm

Fat-Tailed Contagion wrote:Down $2,100 + whatever today's loss is.

Curious to see if that is a sufficient loss to TLH ?
That's up to you of course. My personal threshold is $1,000.
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Re: TLH Exchange International again ? To what ?

Post by Paden » Thu Jan 07, 2016 6:18 pm

At the end of December, I exchanged my position in Vanguard Total Intl Stock Index Admiral (VTIAX) for Vanguard FTSE All-Wld ex-US Idx Admiral (VFWAX) with the purpose of harvesting a capital loss. I read up on tax loss harvesting on this forum and elsewhere before doing so, and I think everything went as planned.

My question now is this: VFWAX is down ~6% since I exchanged. Is it feasible or reasonable to harvest an additional loss like this? Is there another similar fund to move to? I don't want to go back to VTIAX, creating a wash sale.

Is there a reason not to harvest additional losses? If so, when does it make sense to harvest an additional loss?

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Re: TLH Exchange International again ? To what ?

Post by livesoft » Thu Jan 07, 2016 6:21 pm

@Paden, It is feasible and possibly desirable. Exchange VFWAX into VTMGX.

Of course, it is best to be able to eventually buy back into VTIAX at its lowest price of the year. Who knows though when that will be? If it is at the beginning of February, I hope you can see that you will be able to TLH from VTMGX into VTIAX then, too.
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Re: TLH Exchange International again ? To what ?

Post by Paden » Thu Jan 07, 2016 6:32 pm

@Livesoft, so is it reasonable to TLH whenever a position reaches a sizable net loss as long as there is a comparable fund to exchange? Are there situations where you would want to avoid doing the TLH? I know I need to wait 31 days to avoid the wash sale before going back to VTIAX. Does Vanguard have it's own restrictions about that sort of thing? I feel like I remember seeing something about 60 days.

Thank you for the help.

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Re: TLH Exchange International again ? To what ?

Post by livesoft » Thu Jan 07, 2016 6:36 pm

I never let Vanguard stop me from doing what I would like to do and you shouldn't either.

Here is the Vanguard refrain (sung to the tune of Pink Floyd's "Mother"):
Hush now, baby, baby, don't you cry
Vanguard's gonna make all of your nightmares come true
Vanguard's gonna put all of her fears into you
Vanguard's gonna keep you right here under her wing
She won't let you fly but she might let you sing
Vanguard's gonna keep baby cozy and warm
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Re: TLH Exchange International again ? To what ?

Post by harikaried » Thu Jan 07, 2016 6:46 pm

If you need more TLH partners, there's plenty more:

Here's a growth chart comparing various over the last year:

VTWSX: Total World
VTIAX: Total International
VFWAX: Large International
VTMGX: Developed International
VFSVX: Small International

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Re: TLH Exchange International again ? To what ?

Post by grabiner » Thu Jan 07, 2016 8:33 pm

randomizer wrote:
Fat-Tailed Contagion wrote:Down $2,100 + whatever today's loss is.

Curious to see if that is a sufficient loss to TLH ?
That's up to you of course. My personal threshold is $1,000.
I usually wait for a 10% loss. I have huge carryovers already, so I don't gain as much from harvesting losses, and if I have to buy an ETF, I lose in the time and spreads for making the trade.

And that 10% loss happened yesterday (and another 3% was added today); I bought Emerging Markets Index in October after harvesting a loss in August, and placed an order to sell last night, both the October purchase and two lots purchased in 2010 which are now under water.
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Fat-Tailed Contagion
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Re: TLH Exchange International again ? To what ?

Post by Fat-Tailed Contagion » Fri Jan 08, 2016 8:26 pm

Made the exchange to FTSE-Ex US today.

Thanks all for the help.
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Re: TLH Exchange International again ? To what ?

Post by scotthal » Sat Jan 09, 2016 1:38 am

Followed your lead - shifted $135K VTIAX -> VFWAX (~$8K TLH). Should help mask a few portfolio tweaks :: simplifications. Downside is that I won't be able to close out my VEU position in the near term.
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Re: TLH Exchange International again ? To what ?

Post by LadyGeek » Sat Jan 09, 2016 1:23 pm

livesoft wrote:I never let Vanguard stop me from doing what I would like to do and you shouldn't either.

Here is the Vanguard refrain (sung to the tune of Pink Floyd's "Mother"):
Hush now, baby, baby, don't you cry
Vanguard's gonna make all of your nightmares come true
Vanguard's gonna put all of her fears into you
Vanguard's gonna keep you right here under her wing
She won't let you fly but she might let you sing
Vanguard's gonna keep baby cozy and warm
Unreal.
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Re: TLH Exchange International again ? To what ?

Post by crit » Sat Jan 09, 2016 1:52 pm

I TLH'd our whole market VTSAX last week to VLCAX, and it already has losses above my threshold for 'worth it'. Can I TLH it again on Monday?

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Re: TLH Exchange International again ? To what ?

Post by livesoft » Sat Jan 09, 2016 1:54 pm

crit wrote:I TLH'd our whole market VTSAX last week to VLCAX, and it already has losses above my threshold for 'worth it'. Can I TLH it again on Monday?
Of course, VLCAX to VFIAX works. But you may want to slow down there Hoss and give it at least a week or a RBD (whichever comes first).

And here is a good live performance of the song with Roger Waters: https://www.youtube.com/watch?v=nipsQQdpGoQ with Katie Kissoon singing the refrain.
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Re: TLH Exchange International again ? To what ?

Post by crit » Sat Jan 09, 2016 2:16 pm

Yeah, that's what I was thinking.

For perspective, how often / many times did you TLH through 2008-9? How did you decide when to do it?

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Re: TLH Exchange International again ? To what ?

Post by livesoft » Sat Jan 09, 2016 2:19 pm

crit wrote:Yeah, that's what I was thinking.

For perspective, how often / many times did you TLH through 2008-9? How did you decide when to do it?
I TLH'd I think about 3 times in 2008 and I know in March 2009 once and in April 2009 once.

For perspective, in 2015 I did it once in August and for a very small amount in December. I sold for gains more times than I sold for a losses. I have also TLH'd once in 2016 last Thursday.

How to decide? I usually try to wait for a RBD. Look up "TLH RBD livesoft" (without quotes) and have some fun reading. You should find that I also
a. Harvest unrealized short-term losses before they become urealized long-term losses, and
b. Harvest smaller losses after Thanksgiving and before 12/31. The rest of the year, I have a higher loss criteria before I harvest (but see point a and note RBDs).
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Re: TLH Exchange International again ? To what ?

Post by crit » Sat Jan 09, 2016 2:57 pm

Thanks -- good reading, with some bad puns thrown in.

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Re: TLH Exchange International again ? To what ?

Post by crit » Sat Jan 09, 2016 4:05 pm

If you can stand another "which fund" question -- I don't think I can do VFIAX, so what else?

My overall portfolio strategy is (was?) 500 indices in a bunch of places (my 403b has VINIX, spouse 401k has MXVIX, old spouse 401k, and I think spouse's various IRAs have VFIAX) and some extended-market in my 403b to round it out; and VTSAX in taxable. That way I could TLH the taxable and not worry about accidental wash sales. But that means VFIAX isn't a good choice for a 3rd TLH partner.

But maybe I'll wait a few weeks and just go back to VTSAX (I did TLH early last week, so before the RBD. S'pose I can wait for another).

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Re: TLH Exchange International again ? To what ?

Post by livesoft » Sat Jan 09, 2016 4:33 pm

@crit, c'mon you can find a 4th fund at Vanguard quite easily. Consider it a homework challenge. Also, there was no RBD yet this year that I am aware of.
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Re: TLH Exchange International again ? To what ?

Post by randomizer » Sat Jan 09, 2016 6:07 pm

Paden wrote:My question now is this: VFWAX is down ~6% since I exchanged. Is it feasible or reasonable to harvest an additional loss like this? Is there another similar fund to move to?
In the past I've gone VTIAX (Total International) → VFWAX (FTSE All-World ex-US) → an 80:20 blend of VTMGX (Developed Markets) and VEMAX (Emerging Markets). With the recent dip, I took the opportunity to get out of VTMGX/VEMAX and back into VTIAX.

I don't think I'll go back to a blend again in the future, as I didn't feel really comfortable with the complexity, and the imprecision of trying to approximate VTIAX or VFWAX with a blend of funds. It just felt too error prone, as I did it by using the Morningstar "X-ray" tool and adjusting fund investments until I had something that looked close. And I was never going to get super close, because VTIAX and VFWAX have a fair chunk in Canadian stocks (about 6%) whereas VTMGX has none. As it was I probably overexposed myself to emerging markets because when I initially did the swap I was closer to a 75:25 split than 80:20. Not that it really matters in the grand scheme of things, but it still felt like I was changing my AA without really meaning/intending to.

If the complexity here puts you off, as it does me, you could consider just waiting it out so that you can go back to VTIAX (maybe), or just going with VTMGX alone as it tends to dominate anyway (at 80% of the blend, you could make it 100% without too much difference).
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Re: TLH Exchange International again ? To what ?

Post by crit » Mon Jan 11, 2016 3:50 pm

Some choices appear to be Growth index VIGAX, tax-managed capital appreciation VTCLX, or VVIAX, value large cap index. Any perspectives on why or why not one of those?

Another choice might be to put all of my taxable US side into mid-cap or small-cap, to balance out our other 500-index funds; and switch my 403b extended market holding to total market VTSAX.

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Re: TLH Exchange International again ? To what ?

Post by livesoft » Mon Jan 11, 2016 3:52 pm

All good choices. I have no perspectives to contribute on how to choose among them. Excellent work to find these though. Thanks!
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Re: TLH Exchange International again ? To what ?

Post by abuss368 » Mon Jan 11, 2016 3:54 pm

That is a small amount to tax loss harvest.
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Re: TLH Exchange International again ? To what ?

Post by Norris » Thu Feb 11, 2016 2:15 pm

livesoft wrote:I never let Vanguard stop me from doing what I would like to do and you shouldn't either.

Here is the Vanguard refrain (sung to the tune of Pink Floyd's "Mother"):
Hush now, baby, baby, don't you cry
Vanguard's gonna make all of your nightmares come true
Vanguard's gonna put all of her fears into you
Vanguard's gonna keep you right here under her wing
She won't let you fly but she might let you sing
Vanguard's gonna keep baby cozy and warm
LOL livesoft. Seems like Jack would get a chuckle too! Good old simple (other than the 5/8 and 9/8 time signatures and 3-4 pretty back-up singers) song and I'm strumming it on my Martin! Thanks for all your help with TLH. I just switched from average cost to Spec ID in my taxable and hoping to only exchange "covered shares" of VTIAX to VFWAX.

Norris
Life is really simple, but we insist on making it complicated. Confucius

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Re: TLH Exchange International again ? To what ?

Post by livesoft » Thu Feb 11, 2016 2:20 pm

Here are the full lyrics to the song: viewtopic.php?t=182319
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Re: TLH Exchange International again ? To what ?

Post by Norris » Thu Feb 11, 2016 3:01 pm

I think you've got a chart topper, at least in the BH community 8-)

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