TLH FSGDX -> FZILX (or FTIPX) today?

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TLH FSGDX -> FZILX (or FTIPX) today?

Post by le_sacre » Wed Oct 10, 2018 12:40 pm

I always feel like there's something I don't know I don't know about tax loss harvesting...

Seeing as I have a loss on all my lots of FSGDX (which I think tracks FTSE all-world ex-US large cap), including on shares purchased just last week, I'm thinking about today selling all my FSGDX to buy FZILX (the new 0% ER total international fund).

1) Since it's not a huge absolute loss, should I (would you) wait and see what happens?
2) Any reason to TLH into FTIPX instead (MSCI All Country World Index ex USA index) instead of FZILX (Fidelity's proprietary index)?
3) If I go ahead with FZILX and then incur another substantial loss within the next month, any wash-sale problem with immediately TLH again by selling all the FZILX to buy FTIPX?
4) Am I missing something?

I already harvested a bit of loss--for the first time--earlier this year (months ago), selling FTIPX to buy FSGDX. It feels a bit odd to do it incrementally like this. Do most of you try to TLH once (if possible) annually, or wait for RBDs, or wait for a threshold absolute amount of loss, or just whenever you get the chance?

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Re: TLH FSGDX -> FZILX (or FTIPX) today?

Post by crit » Wed Oct 10, 2018 3:08 pm

I've been thinking about your last question in recent weeks.

I know some folks around here make regular taxable purchases, and/or rebalance only one a year and TLH then if it's possible, or only at major overhauls of portfolios but not outside that.

My purchases tend to be lumpier due to how our income arrives. Then because the market generally goes up over long times -- the most likely time for TLHing is in the month or two following a purchase. So my TLHing ends up being incremental. After that window, it's rarer, and in those cases you'll be reading about the stock market drops in the headlines anyway, you won't miss the RBDs like ... all of 2008.

And overall, TLHing is a 'bonus' on top of the major effects of being in the market and compounding returns over years. It's not the end of the world if you miss a chance because you're busy.

But I did TLH today!

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