I need some money from my portfolio , sell out of which fund??

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riptide
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I need some money from my portfolio , sell out of which fund??

Post by riptide » Fri Dec 07, 2018 8:21 am

I don't want to sell because the market is going down, I simply need some money from my portfolio. I don't want to sell with drops, but I need the money. My holdings are listed below. I believe I should take the money from the Bond fund, since I don't have many gains with that fund.
Brokerage account 70/30 | VG total Market 40% | VG total Intl 11% | VG small cap value 12% | VG Reit index 7% | VG Total Bond 30% | TSP Account 75/25 | C Fund 45%, S 15%, I 15%, G 25% | EE Bonds=Emergency Fund

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vineviz
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Re: I need some money from my portfolio , sell out of which fund??

Post by vineviz » Fri Dec 07, 2018 8:27 am

riptide wrote:
Fri Dec 07, 2018 8:21 am
I don't want to sell because the market is going down, I simply need some money from my portfolio. I don't want to sell with drops, but I need the money. My holdings are listed below. I believe I should take the money from the Bond fund, since I don't have many gains with that fund.
Now, and always, sell from whichever asset class is the greatest distance above your long-term asset allocation target.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch

onourway
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Re: I need some money from my portfolio , sell out of which fund??

Post by onourway » Fri Dec 07, 2018 8:31 am

As noted, if you have anything in your portfolio that you've kind of wanted to rid yourself of, sell that first.

After that, if you have your cost basis set as Specific Identification (or can change it before you sell), I would sell lots that have a loss first. That way you not only pay no capital gains taxes, but you actually get assistance from the government on your taxes.

livesoft
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Re: I need some money from my portfolio , sell out of which fund??

Post by livesoft » Fri Dec 07, 2018 8:42 am

I also have to sell something to pay a couple of large credit cards bills. It would be nice if the December dividends appeared in a few days instead of towards the end of the month.

My thought process will go like this:

1. I'm selling taxable because I don't want the extra taxes of selling and withdrawing from tax-deferred.

2. I will sell what has the least tax cost to me. That generally will be something in taxable with a loss. I have no losing positions in taxable, so I will have to sell something with the least gain in taxable instead.

3. Whatever asset class I sell in taxable and at whatever price (gain, loss, whatever), I will buy something similar (but not substantially identical) in tax-advantaged. I will get the money for this by selling a short-term bond fund which has not lost money this year. If I didn't have the short-term bond fund, I would sell an intermediate-term bond fund.

In addition to the above, I tend to simplify my portfolio when I make these sales: I tend to sell groups of small lots to reduce the total number of lots that I have in my taxable positions.
Last edited by livesoft on Fri Dec 07, 2018 8:57 am, edited 1 time in total.
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Call_Me_Op
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Re: I need some money from my portfolio , sell out of which fund??

Post by Call_Me_Op » Fri Dec 07, 2018 8:43 am

vineviz wrote:
Fri Dec 07, 2018 8:27 am
riptide wrote:
Fri Dec 07, 2018 8:21 am
I don't want to sell because the market is going down, I simply need some money from my portfolio. I don't want to sell with drops, but I need the money. My holdings are listed below. I believe I should take the money from the Bond fund, since I don't have many gains with that fund.
Now, and always, sell from whichever asset class is the greatest distance above your long-term asset allocation target.
Beat me to it. You always want to move toward your target AA - when adding money, and when taking money.
Best regards, -Op | | "In the middle of difficulty lies opportunity." Einstein

marcopolo
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Re: I need some money from my portfolio , sell out of which fund??

Post by marcopolo » Fri Dec 07, 2018 8:49 am

livesoft wrote:
Fri Dec 07, 2018 8:42 am
I also have to sell something to pay a couple of large credit cards bills. It would be nice if the December dividends appeared in a few days instead of towards the end of the month.

My thought process will go like this:

1. I'm selling taxable because I don't want the extra taxes of selling and withdrawing from tax-deferred.

2. I will sell what has the least tax cost to me. That generally will be something in taxable with a loss. I have no losing positions in taxable, so I will have to sell something with the least gain in taxable instead.

3. Whatever asset class I sell in taxable and at whatever price (gain, loss, whatever), I will buy something similar (but not substantially identical) in tax-advantaged. I will get the money for this buy selling a short-term bond fund which has not lost money this year. If I didn't have the short-term bond fund, I would sell an intermediate-term bond fund.

In addition to the above, I tend to simplify my portfolio when I make these sales: I tend to sell groups of small lots to reduce the total number of lots that I have in my taxable positions.
I am following a similar process to raise ongoing spending money. I have one question about your process.
Since there are no losing positions in step 2, does it matter if the security is the same (identical) in step 3?
I am trying to avoid adding yet another security to my holdings, if i can avoid it. (desire to simplify portfolio)
Once in a while you get shown the light, in the strangest of places if you look at it right.

Flyer24
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Re: I need some money from my portfolio , sell out of which fund??

Post by Flyer24 » Fri Dec 07, 2018 8:56 am

This is why I keep some extra cash for short term needs in an Ally account or Vanguard Prime. I keep it simple. One quick transfer to my banking account and done. Nothing to sell or buy.
Last edited by Flyer24 on Fri Dec 07, 2018 8:57 am, edited 1 time in total.

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Watty
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Re: I need some money from my portfolio , sell out of which fund??

Post by Watty » Fri Dec 07, 2018 8:57 am

Many mutual funds will be paying a dividend soon. At least in the taxable account you may want to set them to not automatically reinvest the dividends and any capital gains distributions. You could use that for the funds you need then take any additional needed funds out of whichever fund is overweight. You would then rebalance as usual. In general in the taxable account it is probably better to not have the dividends automatically reinvested so that you are not buying more of a mutual fund which is already overweight.

Using the dividends would mean that you would need to sell less of your mutual funds so it could be more tax efficient.

I would also question why you own bonds in the taxable account. It would be more tax efficient to own all your bonds in your retirement account. Somewhere in all this you might want to sell at least part of the bond fund in the taxable account and increase your bond holdings in your retirement account.

https://www.bogleheads.org/wiki/Tax-eff ... _placement
Last edited by Watty on Fri Dec 07, 2018 8:58 am, edited 1 time in total.

livesoft
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Re: I need some money from my portfolio , sell out of which fund??

Post by livesoft » Fri Dec 07, 2018 8:58 am

marcopolo wrote:
Fri Dec 07, 2018 8:49 am
I am following a similar process to raise ongoing spending money. I have one question about your process.
Since there are no losing positions in step 2, does it matter if the security is the same (identical) in step 3?
I am trying to avoid adding yet another security to my holdings, if i can avoid it. (desire to simplify portfolio)
You are right: If I sell at a gain, then it does not matter if I buy the identical ticker symbol in tax-advantaged. Thanks for noting that.
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Jordan4FI
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Re: I need some money from my portfolio , sell out of which fund??

Post by Jordan4FI » Fri Dec 07, 2018 8:59 am

From your emergency fund? hehe

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