TLH NJ Long Term tax exempt: which fund to pair with?

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heartwood
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TLH NJ Long Term tax exempt: which fund to pair with?

Post by heartwood » Wed Mar 25, 2020 8:52 am

We have long term losses in VNJUX, the Long Term Tax Exempt Admiral fund that we'd like to TLH.

Any opinions of just moving it to the NJ Municipal MM, VNJXX?

Similar, but not identical? Any caveats?

livesoft
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Re: TLH NJ Long Term tax exempt: which fund to pair with?

Post by livesoft » Wed Mar 25, 2020 8:55 am

Sounds good to me. Just remember to exchange back after your 30 days in purgatory are over.
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dbr
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Re: TLH NJ Long Term tax exempt: which fund to pair with?

Post by dbr » Wed Mar 25, 2020 9:06 am

Exactly so. The good news is those funds are not even remotely at wash sale hazard. The bad news, if it is, is they aren't close in properties either, so this is just a temporary holding place.

RNJ
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Re: TLH NJ Long Term tax exempt: which fund to pair with?

Post by RNJ » Wed Mar 25, 2020 9:10 am

heartwood wrote:
Wed Mar 25, 2020 8:52 am
We have long term losses in VNJUX, the Long Term Tax Exempt Admiral fund that we'd like to TLH.

Any opinions of just moving it to the NJ Municipal MM, VNJXX?

Similar, but not identical? Any caveats?
VG Long- or Intermediate-Term Tax Exempt might be better pairings from a risk-perspective.

VNJUX & VNJXX are not similar - the former is a long/int-term bond fund, the latter is cash. If you want out of the bond fund, that's one thing. If you're looking for a TLH "partner" with the same risk exposure, that's quite another.

Just be clear about what you want and what your long-term goals are.

Good luck.
RNJ

dbr
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Re: TLH NJ Long Term tax exempt: which fund to pair with?

Post by dbr » Wed Mar 25, 2020 9:14 am

I do think, however, that for this fund just holding cash for thirty days and repurchasing the position is reasonable.

retiringwhen
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Re: TLH NJ Long Term tax exempt: which fund to pair with?

Post by retiringwhen » Wed Mar 25, 2020 9:28 am

dbr wrote:
Wed Mar 25, 2020 9:14 am
I do think, however, that for this fund just holding cash for thirty days and repurchasing the position is reasonable.
I don’t know, the liquidity trap in Muni’s make big moves in either direction very likely. Moving to the a Muni money market still exposes the investor to liquidity risk (there is a reason those yields are at nose bleed levels) without any upside potential you get for holding a long-term fund.

I would agree with above, if you want to keep the long term exposure, to with one of the. National munis funds over a money market.

My losses in VNJUX are short-term and I haven’t decided if I want to TLH them yet, but if I did, I would move them to VWIUX or VWLUX as its duration and maturity are very similar to VNJUX

RNJ
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Re: TLH NJ Long Term tax exempt: which fund to pair with?

Post by RNJ » Wed Mar 25, 2020 9:28 am

dbr wrote:
Wed Mar 25, 2020 9:14 am
I do think, however, that for this fund just holding cash for thirty days and repurchasing the position is reasonable.
Agreed.

RNJ
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Re: TLH NJ Long Term tax exempt: which fund to pair with?

Post by RNJ » Wed Mar 25, 2020 9:33 am

retiringwhen wrote:
Wed Mar 25, 2020 9:28 am
dbr wrote:
Wed Mar 25, 2020 9:14 am
I do think, however, that for this fund just holding cash for thirty days and repurchasing the position is reasonable.
I don’t know, the liquidity trap in Muni’s make big moves in either direction very likely. Moving to the a Muni money market still exposes the investor to liquidity risk (there is a reason those yields are at nose bleed levels) without any upside potential you get for holding a long-term fund.
WOW: 3.22% on the NJ tax-exempt MONEY MARKET fund as of yesterday. 2.2% on the NJ long-term bond fund. What does that tell us about relative risks?

retiringwhen
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Re: TLH NJ Long Term tax exempt: which fund to pair with?

Post by retiringwhen » Wed Mar 25, 2020 9:45 am

RNJ wrote:
Wed Mar 25, 2020 9:33 am
WOW: 3.22% on the NJ tax-exempt MONEY MARKET fund as of yesterday. 2.2% on the NJ long-term bond fund. What does that tell us about relative risks?
Look up Rick Ferri's post from monday of a Morningstar Interview Mohamed El-Erian interview by Jeff Ptak of Morningstar

It is long, but worth it and he describes a lot of what is going on here and the risks in the bond markets. The markets have become jammed up and the resolution is coming, but timing and consequences are still unclear. High risk times. Those rates reflect realized liquidity risk in spades.

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heartwood
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Re: TLH NJ Long Term tax exempt: which fund to pair with?

Post by heartwood » Wed Mar 25, 2020 10:30 am

Done!

Thanks all.

RNJ
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Re: TLH NJ Long Term tax exempt: which fund to pair with?

Post by RNJ » Wed Mar 25, 2020 10:50 am

retiringwhen wrote:
Wed Mar 25, 2020 9:45 am
RNJ wrote:
Wed Mar 25, 2020 9:33 am
WOW: 3.22% on the NJ tax-exempt MONEY MARKET fund as of yesterday. 2.2% on the NJ long-term bond fund. What does that tell us about relative risks?
Look up Rick Ferri's post from monday of a Morningstar Interview Mohamed El-Erian interview by Jeff Ptak of Morningstar

It is long, but worth it and he describes a lot of what is going on here and the risks in the bond markets. The markets have become jammed up and the resolution is coming, but timing and consequences are still unclear. High risk times. Those rates reflect realized liquidity risk in spades.
Great piece - thank you!

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