Where to allocate large stock sale proceeds given current allocation

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Topic Author
vrr106
Posts: 33
Joined: Wed Feb 11, 2015 10:27 am

Where to allocate large stock sale proceeds given current allocation

Post by vrr106 » Wed Oct 09, 2019 10:23 am

Hello all,
We have a fairly large chunk of change (~$500K) in cash due to a recent sale of my company RSUs which I sold given it's current levels. I would like your thoughts on where to put this given the rest of our combined portfolio (wife and I) is as follows below. (Note that additional tax advantaged space is not available and debt is minimal). My initial thought is that I have under-allocated bonds and therefore VBTLX seems a likely candidate. I am in my mid 40s.

Desired AA: 85/15
Should I:
a. Rebalance tax advantaged to achieve this and allocate the available cash into taxable stock funds
b. Buy bonds in taxable (look for more tax efficiency?)
c. Worry about market timing at all?

All Tax advantaged % of total:
- US Stock: 21%
- Intnl Stock: 12%
- US Bond: 6%
- Intnl Bond: 0.5%

All Taxable % of total:
- US Stock: 34%
- Intnl Stock: 7%
- US Bond: 1%
- Intnl Bond: 1%
- Cash (was largely single stock until recently): 17%
Last edited by vrr106 on Wed Oct 09, 2019 11:33 am, edited 1 time in total.

User avatar
RickBoglehead
Posts: 4077
Joined: Wed Feb 14, 2018 9:10 am
Location: In a house

Re: Where to allocate large stock sale proceeds given current allocation

Post by RickBoglehead » Wed Oct 09, 2019 10:31 am

What's your desired AA? That tells you where to put it.
Avid user of forums on variety of interests-financial, home brewing, F-150, PHEV, home repair, etc. Enjoy learning & passing on knowledge. It's PRINCIPAL, not PRINCIPLE. I ADVISE you to seek ADVICE.

asif408
Posts: 1791
Joined: Sun Mar 02, 2014 8:34 am
Location: Florida

Re: Where to allocate large stock sale proceeds given current allocation

Post by asif408 » Wed Oct 09, 2019 10:33 am

I'd probably just allocate to match whatever your chosen allocation is. So if you want to be 90/10 stocks/bonds, with say 20% in international, contribute enough to each to match that allocation.

If you don't have a desired AA, then it's probably good to come up with one.

Topic Author
vrr106
Posts: 33
Joined: Wed Feb 11, 2015 10:27 am

Re: Where to allocate large stock sale proceeds given current allocation

Post by vrr106 » Wed Oct 09, 2019 10:55 am

I should have added - my desired AA is 85/15 but I'm not sure if I should:
a. Rebalance tax advantaged to achieve this and allocate the available cash into taxable stock funds
b. Buy bonds in taxable (look for more tax efficiency?)
c. Worry about market timing at all?

magicrat
Posts: 740
Joined: Sat Nov 29, 2014 7:04 pm

Re: Where to allocate large stock sale proceeds given current allocation

Post by magicrat » Wed Oct 09, 2019 12:08 pm

Bonds go in pre-tax (not sure if this is what you mean by tax advantaged). Invest your cash according to your 85/15 target. Do not market time.

Topic Author
vrr106
Posts: 33
Joined: Wed Feb 11, 2015 10:27 am

Re: Where to allocate large stock sale proceeds given current allocation

Post by vrr106 » Wed Oct 09, 2019 12:21 pm

magicrat wrote:
Wed Oct 09, 2019 12:08 pm
Bonds go in pre-tax (not sure if this is what you mean by tax advantaged). Invest your cash according to your 85/15 target. Do not market time.
What I meant was that buying bonds in taxable would incur taxes. We are in the 37% tax bracket right now.

magicrat
Posts: 740
Joined: Sat Nov 29, 2014 7:04 pm

Re: Where to allocate large stock sale proceeds given current allocation

Post by magicrat » Wed Oct 09, 2019 12:23 pm

vrr106 wrote:
Wed Oct 09, 2019 12:21 pm
magicrat wrote:
Wed Oct 09, 2019 12:08 pm
Bonds go in pre-tax (not sure if this is what you mean by tax advantaged). Invest your cash according to your 85/15 target. Do not market time.
What I meant was that buying bonds in taxable would incur taxes. We are in the 37% tax bracket right now.
Right. That's why you locate bonds in pre-tax.

User avatar
BL
Posts: 9117
Joined: Sun Mar 01, 2009 2:28 pm

Re: Where to allocate large stock sale proceeds given current allocation

Post by BL » Wed Oct 09, 2019 1:40 pm

If you want bonds in taxable, consider munis.

Post Reply