VWLUX and VWIUX [Long and Intermediate tax-exempt]

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TNOA
Posts: 145
Joined: Fri May 24, 2019 6:08 am

Re: VWLUX and VWIUX [Long and Intermediate tax-exempt]

Post by TNOA » Thu Mar 19, 2020 10:55 pm

JiggyWillis wrote:
Thu Mar 19, 2020 7:58 pm
I bought a slug of VWIUX in taxable in mid January and it is down over 6% counting today's 2.5% decline. I thought it would be more stable than this in a drawdown-certainly did not expect this type of volatility. I may use it to rebalance into Total Stock Market instead of using the money market funds I have been holding for that purpose.

Question: can I go under the $50k threshhold for VWIUX or will that trigger a problem?
Why do you not simply get VTEB or whatever a better equivalent is to your desired VWIUX in the ETF world?

Topic Author
yoyo6713
Posts: 120
Joined: Thu May 10, 2018 8:48 pm

Re: VWLUX and VWIUX [Long and Intermediate tax-exempt]

Post by yoyo6713 » Fri Mar 20, 2020 10:12 am

Finally, fed comes to the rescue!

September
Posts: 103
Joined: Tue Nov 11, 2008 10:40 am

Re: VWLUX and VWIUX [Long and Intermediate tax-exempt]

Post by September » Fri Mar 20, 2020 12:22 pm

I hold the VWLUX too and wished I could sell it on March 9 when I almost pushed the sell button.
Now is it a good time to TLH to VWIUX? Thanks!

Freefun
Posts: 606
Joined: Sun Jan 14, 2018 3:55 pm

Re: VWLUX and VWIUX [Long and Intermediate tax-exempt]

Post by Freefun » Fri Mar 20, 2020 6:03 pm

VWIUX took another beating today. Assuming I don’t need the money near term do I just wait it out or should I sell? I could use the TLH if prudent.

Would greatly appreciate advice.
Remember when you wanted what you currently have?

hudson
Posts: 2352
Joined: Fri Apr 06, 2007 9:15 am

Re: VWLUX and VWIUX [Long and Intermediate tax-exempt]

Post by hudson » Fri Mar 20, 2020 6:24 pm

Freefun wrote:
Fri Mar 20, 2020 6:03 pm
VWIUX took another beating today. Assuming I don’t need the money near term do I just wait it out or should I sell? I could use the TLH if prudent.

Would greatly appreciate advice.
I don't want to give buy or sell advice...just some thoughts...
I just got into TLH territory today with VWIUX. I'm trying to make the same decision. I could use a fat capital loss when doing my tax return next year. I could sell VWIUX and buy Baird's safer muni BMBIX, or I could just hold VWIUX for the dividends/interest. I'm leaning toward holding as the fund's holding are solid.

Topic Author
yoyo6713
Posts: 120
Joined: Thu May 10, 2018 8:48 pm

Re: VWLUX and VWIUX [Long and Intermediate tax-exempt]

Post by yoyo6713 » Fri Mar 20, 2020 6:30 pm

03/19/20:
VWLUX: - 0.36 (-3.13%)
VWIUX: - 0.35 (-2.50%)

03/20/20:
VWLUX: - 0.32 (-2.88%)
VWIUX: - 0.34 (-2.49%)

Today VTEB went up 2.34% which my guess was VTEB has more short term munis the feds are buying?
VWLUX, VWIUX didn't behave like 2008's to me (-2.5% on consequtive days and -12% in 10 days).

September
Posts: 103
Joined: Tue Nov 11, 2008 10:40 am

Re: VWLUX and VWIUX [Long and Intermediate tax-exempt]

Post by September » Fri Mar 20, 2020 6:39 pm

hudson wrote:
Fri Mar 20, 2020 6:24 pm
Freefun wrote:
Fri Mar 20, 2020 6:03 pm
VWIUX took another beating today. Assuming I don’t need the money near term do I just wait it out or should I sell? I could use the TLH if prudent.

Would greatly appreciate advice.
I don't want to give buy or sell advice...just some thoughts...
I just got into TLH territory today with VWIUX. I'm trying to make the same decision. I could use a fat capital loss when doing my tax return next year. I could sell VWIUX and buy Baird's safer muni BMBIX, or I could just hold VWIUX for the dividends/interest. I'm leaning toward holding as the fund's holding are solid.
Do you have any thoughts on what I should do with VWLTX? What do you mean by the TLH territory?

September
Posts: 103
Joined: Tue Nov 11, 2008 10:40 am

Re: VWLUX and VWIUX [Long and Intermediate tax-exempt]

Post by September » Fri Mar 20, 2020 6:41 pm

yoyo6713 wrote:
Fri Mar 20, 2020 6:30 pm
03/19/20:
VWLUX: - 0.36 (-3.13%)
VWIUX: - 0.35 (-2.50%)

03/20/20:
VWLUX: - 0.32 (-2.88%)
VWIUX: - 0.34 (-2.49%)

Today VTEB went up 2.34% which my guess was VTEB has more short term munis the feds are buying?
VWLUX, VWIUX didn't behave like 2008's to me (-2.5% on consequtive days and -12% in 10 days).
That's true. It's down a lot.

hudson
Posts: 2352
Joined: Fri Apr 06, 2007 9:15 am

Re: VWLUX and VWIUX [Long and Intermediate tax-exempt]

Post by hudson » Fri Mar 20, 2020 6:46 pm

September wrote:
Fri Mar 20, 2020 6:39 pm
hudson wrote:
Fri Mar 20, 2020 6:24 pm
Freefun wrote:
Fri Mar 20, 2020 6:03 pm
VWIUX took another beating today. Assuming I don’t need the money near term do I just wait it out or should I sell? I could use the TLH if prudent.

Would greatly appreciate advice.
I don't want to give buy or sell advice...just some thoughts...
I just got into TLH territory today with VWIUX. I'm trying to make the same decision. I could use a fat capital loss when doing my tax return next year. I could sell VWIUX and buy Baird's safer muni BMBIX, or I could just hold VWIUX for the dividends/interest. I'm leaning toward holding as the fund's holding are solid.
Do you have any thoughts on what I should do with VWLTX? What do you mean by the TLH territory?
Tax Loss Harvest Territory. VWIUX is now selling for less than I paid for it. Until recently, I still had potential capital gains.

ruud
Posts: 221
Joined: Sat Mar 03, 2007 1:28 pm
Location: san francisco bay area

Re: VWLUX and VWIUX [Long and Intermediate tax-exempt]

Post by ruud » Fri Mar 20, 2020 6:50 pm

yoyo6713 wrote:
Fri Mar 20, 2020 6:30 pm
03/19/20:
VWLUX: - 0.36 (-3.13%)
VWIUX: - 0.35 (-2.50%)

03/20/20:
VWLUX: - 0.32 (-2.88%)
VWIUX: - 0.34 (-2.49%)

Today VTEB went up 2.34% which my guess was VTEB has more short term munis the feds are buying?
VWLUX, VWIUX didn't behave like 2008's to me (-2.5% on consequtive days and -12% in 10 days).
VTEAX (the mutual fund share class of VTEB) was down 2.53% on 3/20/2020, in line with VWIUX.
I'm guessing the big swing in VTEB was due to it trading well below NAV the past few days.
.

September
Posts: 103
Joined: Tue Nov 11, 2008 10:40 am

Re: VWLUX and VWIUX [Long and Intermediate tax-exempt]

Post by September » Fri Mar 20, 2020 6:52 pm

hudson wrote:
Fri Mar 20, 2020 6:46 pm
September wrote:
Fri Mar 20, 2020 6:39 pm
hudson wrote:
Fri Mar 20, 2020 6:24 pm
Freefun wrote:
Fri Mar 20, 2020 6:03 pm
VWIUX took another beating today. Assuming I don’t need the money near term do I just wait it out or should I sell? I could use the TLH if prudent.

Would greatly appreciate advice.
I don't want to give buy or sell advice...just some thoughts...
I just got into TLH territory today with VWIUX. I'm trying to make the same decision. I could use a fat capital loss when doing my tax return next year. I could sell VWIUX and buy Baird's safer muni BMBIX, or I could just hold VWIUX for the dividends/interest. I'm leaning toward holding as the fund's holding are solid.
Do you have any thoughts on what I should do with VWLTX? What do you mean by the TLH territory?
Tax Loss Harvest Territory. VWIUX is now selling for less than I paid for it. Until recently, I still had potential capital gains.
Thanks for your response. I entered into the Tax Loss Harvest Territory at least as of yesterday. Today I lost more. So do you think I should hold or sell to TLH to another fund? I don't need this money.

Topic Author
yoyo6713
Posts: 120
Joined: Thu May 10, 2018 8:48 pm

Re: VWLUX and VWIUX [Long and Intermediate tax-exempt]

Post by yoyo6713 » Fri Mar 20, 2020 6:52 pm

September wrote:
Fri Mar 20, 2020 6:39 pm
hudson wrote:
Fri Mar 20, 2020 6:24 pm
Freefun wrote:
Fri Mar 20, 2020 6:03 pm
VWIUX took another beating today. Assuming I don’t need the money near term do I just wait it out or should I sell? I could use the TLH if prudent.

Would greatly appreciate advice.
I don't want to give buy or sell advice...just some thoughts...
I just got into TLH territory today with VWIUX. I'm trying to make the same decision. I could use a fat capital loss when doing my tax return next year. I could sell VWIUX and buy Baird's safer muni BMBIX, or I could just hold VWIUX for the dividends/interest. I'm leaning toward holding as the fund's holding are solid.
Do you have any thoughts on what I should do with VWLTX? What do you mean by the TLH territory?
I cannot give advice on buying or selling either as investment decision are all personal. I sold on 10th because this is the first time I own these and I just didn't understand why the sudden drop and I have a large position. If I hadn't sold on 10th I definitely would have on 11th because I always have capital preservation in my mind (approaching retirement). TLH means tax loss havesting (a tax saving mechanism that swaps your loss holding with something similar without running foul with wash sale rules).

September
Posts: 103
Joined: Tue Nov 11, 2008 10:40 am

Re: VWLUX and VWIUX [Long and Intermediate tax-exempt]

Post by September » Fri Mar 20, 2020 6:59 pm

yoyo6713 wrote:
Fri Mar 20, 2020 6:52 pm
September wrote:
Fri Mar 20, 2020 6:39 pm
hudson wrote:
Fri Mar 20, 2020 6:24 pm
Freefun wrote:
Fri Mar 20, 2020 6:03 pm
VWIUX took another beating today. Assuming I don’t need the money near term do I just wait it out or should I sell? I could use the TLH if prudent.

Would greatly appreciate advice.
I don't want to give buy or sell advice...just some thoughts...
I just got into TLH territory today with VWIUX. I'm trying to make the same decision. I could use a fat capital loss when doing my tax return next year. I could sell VWIUX and buy Baird's safer muni BMBIX, or I could just hold VWIUX for the dividends/interest. I'm leaning toward holding as the fund's holding are solid.
Do you have any thoughts on what I should do with VWLTX? What do you mean by the TLH territory?
I cannot give advice on buying or selling either as investment decision are all personal. I sold on 10th because this is the first time I own these and I just didn't understand why the sudden drop and I have a large position. If I hadn't sold on 10th I definitely would have on 11th because I always have capital preservation in my mind (approaching retirement). TLH means tax loss havesting (a tax saving mechanism that swaps your loss holding with something similar without running foul with wash sale rules).
Thanks for your response. I did TLH during the 2009 stock market crash, so I understand what it meant. I wonder what is the equivalent fund of VWLTX that I can buy into?

Topic Author
yoyo6713
Posts: 120
Joined: Thu May 10, 2018 8:48 pm

Re: VWLUX and VWIUX [Long and Intermediate tax-exempt]

Post by yoyo6713 » Fri Mar 20, 2020 8:43 pm

September wrote:
Fri Mar 20, 2020 6:59 pm
yoyo6713 wrote:
Fri Mar 20, 2020 6:52 pm
September wrote:
Fri Mar 20, 2020 6:39 pm
hudson wrote:
Fri Mar 20, 2020 6:24 pm
Freefun wrote:
Fri Mar 20, 2020 6:03 pm
VWIUX took another beating today. Assuming I don’t need the money near term do I just wait it out or should I sell? I could use the TLH if prudent.

Would greatly appreciate advice.
I don't want to give buy or sell advice...just some thoughts...
I just got into TLH territory today with VWIUX. I'm trying to make the same decision. I could use a fat capital loss when doing my tax return next year. I could sell VWIUX and buy Baird's safer muni BMBIX, or I could just hold VWIUX for the dividends/interest. I'm leaning toward holding as the fund's holding are solid.
Do you have any thoughts on what I should do with VWLTX? What do you mean by the TLH territory?
I cannot give advice on buying or selling either as investment decision are all personal. I sold on 10th because this is the first time I own these and I just didn't understand why the sudden drop and I have a large position. If I hadn't sold on 10th I definitely would have on 11th because I always have capital preservation in my mind (approaching retirement). TLH means tax loss havesting (a tax saving mechanism that swaps your loss holding with something similar without running foul with wash sale rules).
Thanks for your response. I did TLH during the 2009 stock market crash, so I understand what it meant. I wonder what is the equivalent fund of VWLTX that I can buy into?
You can lower your duration by switching to VWITX. The yield is lower, tho. Do some research performance and risks and then decide.

Also check this thread: viewtopic.php?p=5117358#p5117358
Last edited by yoyo6713 on Fri Mar 20, 2020 11:17 pm, edited 1 time in total.

annu
Posts: 399
Joined: Mon Nov 04, 2019 7:55 pm

Re: VWLUX and VWIUX [Long and Intermediate tax-exempt]

Post by annu » Fri Mar 20, 2020 10:53 pm

yoyo6713 wrote:
Fri Mar 20, 2020 6:30 pm
03/19/20:
VWLUX: - 0.36 (-3.13%)
VWIUX: - 0.35 (-2.50%)

03/20/20:
VWLUX: - 0.32 (-2.88%)
VWIUX: - 0.34 (-2.49%)

Today VTEB went up 2.34% which my guess was VTEB has more short term munis the feds are buying?
VWLUX, VWIUX didn't behave like 2008's to me (-2.5% on consequtive days and -12% in 10 days).
I own both, but dont knowhow to check above on a daily basis, especially same day, was expecting due to vteb going a little +ve, maybe a similar move. How did you find data for 03/20?

Topic Author
yoyo6713
Posts: 120
Joined: Thu May 10, 2018 8:48 pm

Re: VWLUX and VWIUX [Long and Intermediate tax-exempt]

Post by yoyo6713 » Fri Mar 20, 2020 11:15 pm

annu wrote:
Fri Mar 20, 2020 10:53 pm
yoyo6713 wrote:
Fri Mar 20, 2020 6:30 pm
03/19/20:
VWLUX: - 0.36 (-3.13%)
VWIUX: - 0.35 (-2.50%)

03/20/20:
VWLUX: - 0.32 (-2.88%)
VWIUX: - 0.34 (-2.49%)

Today VTEB went up 2.34% which my guess was VTEB has more short term munis the feds are buying?
VWLUX, VWIUX didn't behave like 2008's to me (-2.5% on consequtive days and -12% in 10 days).
I own both, but dont knowhow to check above on a daily basis, especially same day, was expecting due to vteb going a little +ve, maybe a similar move. How did you find data for 03/20?
I usually get the price at vanguard when I had the positions there, daily between 6:00pm-7:00pm. Yahoo finance also has this data (including historical data) around similar timing:

https://finance.yahoo.com/quote/VWLUX?p=VWLUX
https://finance.yahoo.com/quote/VWITX?p=VWITX

TNOA
Posts: 145
Joined: Fri May 24, 2019 6:08 am

Re: VWLUX and VWIUX [Long and Intermediate tax-exempt]

Post by TNOA » Fri Mar 20, 2020 11:28 pm

yoyo6713 wrote:
Fri Mar 20, 2020 6:30 pm
03/19/20:
VWLUX: - 0.36 (-3.13%)
VWIUX: - 0.35 (-2.50%)

03/20/20:
VWLUX: - 0.32 (-2.88%)
VWIUX: - 0.34 (-2.49%)

Today VTEB went up 2.34% which my guess was VTEB has more short term munis the feds are buying?
VWLUX, VWIUX didn't behave like 2008's to me (-2.5% on consequtive days and -12% in 10 days).
Again, I asked above and asking again. Why would one hold VWIUX while VTEB is available (separate from the fact that VTEB +2% while VWIUX is down 2% just today). Enlighten me.

annu
Posts: 399
Joined: Mon Nov 04, 2019 7:55 pm

Re: VWLUX and VWIUX [Long and Intermediate tax-exempt]

Post by annu » Sat Mar 21, 2020 1:07 am

TNOA wrote:
Fri Mar 20, 2020 11:28 pm
yoyo6713 wrote:
Fri Mar 20, 2020 6:30 pm
03/19/20:
VWLUX: - 0.36 (-3.13%)
VWIUX: - 0.35 (-2.50%)

03/20/20:
VWLUX: - 0.32 (-2.88%)
VWIUX: - 0.34 (-2.49%)

Today VTEB went up 2.34% which my guess was VTEB has more short term munis the feds are buying?
VWLUX, VWIUX didn't behave like 2008's to me (-2.5% on consequtive days and -12% in 10 days).
Again, I asked above and asking again. Why would one hold VWIUX while VTEB is available (separate from the fact that VTEB +2% while VWIUX is down 2% just today). Enlighten me.

The have different bond durations and composition

September
Posts: 103
Joined: Tue Nov 11, 2008 10:40 am

Re: VWLUX and VWIUX [Long and Intermediate tax-exempt]

Post by September » Sat Mar 21, 2020 6:39 am

yoyo6713 wrote:
Fri Mar 20, 2020 8:43 pm
September wrote:
Fri Mar 20, 2020 6:59 pm
yoyo6713 wrote:
Fri Mar 20, 2020 6:52 pm
September wrote:
Fri Mar 20, 2020 6:39 pm
hudson wrote:
Fri Mar 20, 2020 6:24 pm


I don't want to give buy or sell advice...just some thoughts...
I just got into TLH territory today with VWIUX. I'm trying to make the same decision. I could use a fat capital loss when doing my tax return next year. I could sell VWIUX and buy Baird's safer muni BMBIX, or I could just hold VWIUX for the dividends/interest. I'm leaning toward holding as the fund's holding are solid.
Do you have any thoughts on what I should do with VWLTX? What do you mean by the TLH territory?
I cannot give advice on buying or selling either as investment decision are all personal. I sold on 10th because this is the first time I own these and I just didn't understand why the sudden drop and I have a large position. If I hadn't sold on 10th I definitely would have on 11th because I always have capital preservation in my mind (approaching retirement). TLH means tax loss havesting (a tax saving mechanism that swaps your loss holding with something similar without running foul with wash sale rules).
Thanks for your response. I did TLH during the 2009 stock market crash, so I understand what it meant. I wonder what is the equivalent fund of VWLTX that I can buy into?
You can lower your duration by switching to VWITX. The yield is lower, tho. Do some research performance and risks and then decide.

Also check this thread: viewtopic.php?p=5117358#p5117358
Thanks. I started that thread.

Topic Author
yoyo6713
Posts: 120
Joined: Thu May 10, 2018 8:48 pm

Re: VWLUX and VWIUX [Long and Intermediate tax-exempt]

Post by yoyo6713 » Sat Mar 21, 2020 6:49 am

TNOA wrote:
Fri Mar 20, 2020 11:28 pm
yoyo6713 wrote:
Fri Mar 20, 2020 6:30 pm
03/19/20:
VWLUX: - 0.36 (-3.13%)
VWIUX: - 0.35 (-2.50%)

03/20/20:
VWLUX: - 0.32 (-2.88%)
VWIUX: - 0.34 (-2.49%)

Today VTEB went up 2.34% which my guess was VTEB has more short term munis the feds are buying?
VWLUX, VWIUX didn't behave like 2008's to me (-2.5% on consequtive days and -12% in 10 days).
Again, I asked above and asking again. Why would one hold VWIUX while VTEB is available (separate from the fact that VTEB +2% while VWIUX is down 2% just today). Enlighten me.
I do not know the answer as I do not own VTEB. My speculation is that VTEB is marketed (assume underlying asset is the same) towards ETF folks. If I were to own VTEB, the only advantage I can see is that VTEB allows you to exit a position mid-day. Considering there is no free lunch, something ought to give thus VTEB seemed to be down more than VWIUX. So far, returns for these two under market stress showed they seem to be different. I am still trying to learn about VTEB.

What's your take on VTEB?
Last edited by yoyo6713 on Sat Mar 21, 2020 6:56 am, edited 1 time in total.

hudson
Posts: 2352
Joined: Fri Apr 06, 2007 9:15 am

Re: VWLUX and VWIUX [Long and Intermediate tax-exempt]

Post by hudson » Sat Mar 21, 2020 6:55 am

TNOA wrote:
Fri Mar 20, 2020 11:28 pm
Why would one hold VWIUX while VTEB is available
VWIUX's dividends are accrued daily as are similar Vanguard muni funds. I don't believe that VTEB works the same way. If you sell in mid month, you still get the dividends. There are also tax advantages. For more information, see below.

viewtopic.php?t=258828

TNOA
Posts: 145
Joined: Fri May 24, 2019 6:08 am

Re: VWLUX and VWIUX [Long and Intermediate tax-exempt]

Post by TNOA » Sat Mar 21, 2020 7:31 am

yoyo6713 wrote:
Sat Mar 21, 2020 6:49 am
TNOA wrote:
Fri Mar 20, 2020 11:28 pm
yoyo6713 wrote:
Fri Mar 20, 2020 6:30 pm
03/19/20:
VWLUX: - 0.36 (-3.13%)
VWIUX: - 0.35 (-2.50%)

03/20/20:
VWLUX: - 0.32 (-2.88%)
VWIUX: - 0.34 (-2.49%)

Today VTEB went up 2.34% which my guess was VTEB has more short term munis the feds are buying?
VWLUX, VWIUX didn't behave like 2008's to me (-2.5% on consequtive days and -12% in 10 days).
Again, I asked above and asking again. Why would one hold VWIUX while VTEB is available (separate from the fact that VTEB +2% while VWIUX is down 2% just today). Enlighten me.
I do not know the answer as I do not own VTEB. My speculation is that VTEB is marketed (assume underlying asset is the same) towards ETF folks. If I were to own VTEB, the only advantage I can see is that VTEB allows you to exit a position mid-day. Considering there is no free lunch, something ought to give thus VTEB seemed to be down more than VWIUX. So far, returns for these two under market stress showed they seem to be different. I am still trying to learn about VTEB.

What's your take on VTEB?
It’s simpler for me as it is ETF my other 2 funds are also ETFs. As a never-sell investor I haven’t quite delved into TLH folks here seem to suggest VTEB is not a good fit for TLH. I believe duration is around7 years, how is this long duration I’m not sure. But certainly gave me a headache this time around. I might be missing something Idk.

Topic Author
yoyo6713
Posts: 120
Joined: Thu May 10, 2018 8:48 pm

Re: VWLUX and VWIUX [Long and Intermediate tax-exempt]

Post by yoyo6713 » Sat Mar 21, 2020 7:54 am

TNOA wrote:
Sat Mar 21, 2020 7:31 am
yoyo6713 wrote:
Sat Mar 21, 2020 6:49 am
TNOA wrote:
Fri Mar 20, 2020 11:28 pm
yoyo6713 wrote:
Fri Mar 20, 2020 6:30 pm
03/19/20:
VWLUX: - 0.36 (-3.13%)
VWIUX: - 0.35 (-2.50%)

03/20/20:
VWLUX: - 0.32 (-2.88%)
VWIUX: - 0.34 (-2.49%)

Today VTEB went up 2.34% which my guess was VTEB has more short term munis the feds are buying?
VWLUX, VWIUX didn't behave like 2008's to me (-2.5% on consequtive days and -12% in 10 days).
Again, I asked above and asking again. Why would one hold VWIUX while VTEB is available (separate from the fact that VTEB +2% while VWIUX is down 2% just today). Enlighten me.
I do not know the answer as I do not own VTEB. My speculation is that VTEB is marketed (assume underlying asset is the same) towards ETF folks. If I were to own VTEB, the only advantage I can see is that VTEB allows you to exit a position mid-day. Considering there is no free lunch, something ought to give thus VTEB seemed to be down more than VWIUX. So far, returns for these two under market stress showed they seem to be different. I am still trying to learn about VTEB.

What's your take on VTEB?
It’s simpler for me as it is ETF my other 2 funds are also ETFs. As a never-sell investor I haven’t quite delved into TLH folks here seem to suggest VTEB is not a good fit for TLH. I believe duration is around7 years, how is this long duration I’m not sure. But certainly gave me a headache this time around. I might be missing something Idk.
Have you been following this discussion?: viewtopic.php?p=5110989#p5110989
and this: viewtopic.php?p=5117766#p5117766
read all the referenced articles in those threads too.
Duration issues aside, now *I* tend to think EFT (VTEB) more or less and an indicator to whats about to come for the funds (VWIUX) if market condition doesn't improve. Like U.S. COVID-19 condition tomorrow like what Italy looks like today :twisted: Notice fed did decide to facilitate short term munis (12 months or less).

dave1054
Posts: 142
Joined: Wed Apr 01, 2009 7:50 am

Re: VWLUX and VWIUX [Long and Intermediate tax-exempt]

Post by dave1054 » Sat Mar 21, 2020 9:10 am

I understand the frustration of losing money in so called conservative muni funds. The question is what to do going forward.
I personally do not see much upside potential in muni bonds when eventual recovery occurs. Interest rates cannot drop much more. We are already near zero.

So I guess the million dollar question is:
Is it better to leave muni investments unchanged or move to a money market and maybe sacrifice a small amount of extra yield.

I have AA of 50% stocks, 50% bonds. I am now wondering if better to have 50% stocks, 50% cash. No change in stock market allocation just a change in perception of value of short/intermediate term muni funds. Thoughts/comments appreciated.

Topic Author
yoyo6713
Posts: 120
Joined: Thu May 10, 2018 8:48 pm

Re: VWLUX and VWIUX [Long and Intermediate tax-exempt]

Post by yoyo6713 » Sat Mar 21, 2020 9:40 am

dave1054 wrote:
Sat Mar 21, 2020 9:10 am
I understand the frustration of losing money in so called conservative muni funds. The question is what to do going forward.
I personally do not see much upside potential in muni bonds when eventual recovery occurs. Interest rates cannot drop much more. We are already near zero.

So I guess the million dollar question is:
Is it better to leave muni investments unchanged or move to a money market and maybe sacrifice a small amount of extra yield.

I have AA of 50% stocks, 50% bonds. I am now wondering if better to have 50% stocks, 50% cash. No change in stock market allocation just a change in perception of value of short/intermediate term muni funds. Thoughts/comments appreciated.
I thought about this as well. Existing bonds held in VWLUX VWIUX should have appreciated in a low rate environment if there is no market stress. Unless credit risk becomes an issue, those bonds should do well but overall the funds yield will trend down if low interest stays and bonds rotate out. I am still considering buying back when the volatility subsides.

hudson
Posts: 2352
Joined: Fri Apr 06, 2007 9:15 am

Re: VWLUX and VWIUX [Long and Intermediate tax-exempt]

Post by hudson » Sat Mar 21, 2020 9:47 am

dave1054 wrote:
Sat Mar 21, 2020 9:10 am
I understand the frustration of losing money in so called conservative muni funds. The question is what to do going forward.
I personally do not see much upside potential in muni bonds when eventual recovery occurs. Interest rates cannot drop much more. We are already near zero.

So I guess the million dollar question is:
Is it better to leave muni investments unchanged or move to a money market and maybe sacrifice a small amount of extra yield.

I have AA of 50% stocks, 50% bonds. I am now wondering if better to have 50% stocks, 50% cash. No change in stock market allocation just a change in perception of value of short/intermediate term muni funds. Thoughts/comments appreciated.
You already know this stuff dave1054.
Muni advantages....
No federal tax; if you can get a good state-only muni with a low expense ratio....no state tax.

If you are in the 22% tax bracket and the math works out, muni payouts can beat any currently available products...a little.

If you are in a higher tax bracket, munis are worth a look.

A fund with high AAA/AA/A bond holdings and a low expense ratio should be good.

If you are losing on a currently held muni, you could tax loss harvest...it depends.

Munis are safer than investment grade funds, but not as safe as CDs or treasuries.

It is a painful time to hold munis.

annu
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Re: VWLUX and VWIUX [Long and Intermediate tax-exempt]

Post by annu » Mon Mar 23, 2020 1:22 pm

See some upward movement, maybe some of the steps by feds will help.

TNOA
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Re: VWLUX and VWIUX [Long and Intermediate tax-exempt]

Post by TNOA » Mon Mar 23, 2020 4:37 pm

annu wrote:
Mon Mar 23, 2020 1:22 pm
See some upward movement, maybe some of the steps by feds will help.
Yeah, I have VTEB 7.3. year duration. Fed will help 12 month or less duration munis. I was worried VTEB will not fully benefit from it. But is behaving as though it might. I don't know the theory behind it all though to estimate Fed's repurchases of shorter duration and whether that would have a significant impact in getting VTEB recovered.

annu
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Re: VWLUX and VWIUX [Long and Intermediate tax-exempt]

Post by annu » Mon Mar 23, 2020 4:50 pm

I own vwlux as well, hoping it will get some break from the downward trend as well

RonSwanson
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Re: VWLUX and VWIUX [Long and Intermediate tax-exempt]

Post by RonSwanson » Mon Mar 23, 2020 6:18 pm

VWIUX up a small amount, less than I was hoping but I'll take what I can take!

Topic Author
yoyo6713
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Re: VWLUX and VWIUX [Long and Intermediate tax-exempt]

Post by yoyo6713 » Thu Mar 26, 2020 6:18 am

Huge jump yesterday:

VWLUX: +0.44 (4.00%)
VWIUX: +0.46 (3.4%)

Now that feds are buying short term munis, I bought (VTEB) back 10% of what I sold which represents an amount I would have lost if I had held on.

TNOA
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Re: VWLUX and VWIUX [Long and Intermediate tax-exempt]

Post by TNOA » Thu Mar 26, 2020 9:25 am

15% comeback in VTEB - unreal !! Is this perhaps the time we should liquidate VTEB and put it all into VGIT? This whole move (not like how it had played out during 2008) truly bothered me as someone who has his 30% bonds portfolio 50/50 VGIT/VTEB. This time we may have been saved by the Fed repurchases, but is this worth the risk going forward? Any thoughts?

am
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Re: VWLUX and VWIUX [Long and Intermediate tax-exempt]

Post by am » Thu Mar 26, 2020 9:29 am

TNOA wrote:
Thu Mar 26, 2020 9:25 am
15% comeback in VTEB - unreal !! Is this perhaps the time we should liquidate VTEB and put it all into VGIT? This whole move (not like how it had played out during 2008) truly bothered me as someone who has his 30% bonds portfolio 50/50 VGIT/VTEB. This time we may have been saved by the Fed repurchases, but is this worth the risk going forward? Any thoughts?
So you think the big jump in prices of munis is attributable to fed purchases? Seems to me like they are committed to keeping the market liquid.

I do think the risk for default is much greater because it’s tough for municipalities to collect taxes when so much is shut down, so many people aren’t working and expenses may rise due to rising cases.

hudson
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Re: VWLUX and VWIUX [Long and Intermediate tax-exempt]

Post by hudson » Thu Mar 26, 2020 9:49 am

am wrote:
Thu Mar 26, 2020 9:29 am
TNOA wrote:
Thu Mar 26, 2020 9:25 am
15% comeback in VTEB - unreal !! Is this perhaps the time we should liquidate VTEB and put it all into VGIT? This whole move (not like how it had played out during 2008) truly bothered me as someone who has his 30% bonds portfolio 50/50 VGIT/VTEB. This time we may have been saved by the Fed repurchases, but is this worth the risk going forward? Any thoughts?
So you think the big jump in prices of munis is attributable to fed purchases? Seems to me like they are committed to keeping the market liquid.

I do think the risk for default is much greater because it’s tough for municipalities to collect taxes when so much is shut down, so many people aren’t working and expenses may rise due to rising cases.
Good question! Did the muni NAVs rise because of the Fed support for munis? Or did the NAV rise because of US Congress initiatives? Did the NAV rise because large organizations have stopped needing to sell bonds for cash? Did the NAV rise because panic sellers have all sold? Did the NAV rise because some panic sellers are trying to get back in? What questions did I miss? I don't know the answers.

I could speculate. I believe that munis in general could be in trouble if this goes on for a long time. I think that it will take a lot to sink AAA/AA munis.

Topic Author
yoyo6713
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Re: VWLUX and VWIUX [Long and Intermediate tax-exempt]

Post by yoyo6713 » Thu Mar 26, 2020 12:43 pm

TNOA wrote:
Thu Mar 26, 2020 9:25 am
15% comeback in VTEB - unreal !! Is this perhaps the time we should liquidate VTEB and put it all into VGIT? This whole move (not like how it had played out during 2008) truly bothered me as someone who has his 30% bonds portfolio 50/50 VGIT/VTEB. This time we may have been saved by the Fed repurchases, but is this worth the risk going forward? Any thoughts?
I certainly won't put more than 30% in munis going forward having learned the lesson this time around. Yes default probability seemed to have gone up but if rates stays low, what other options do we have available to beat the inflation? move into equities? :twisted:

67Bosox
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Re: VWLUX and VWIUX [Long and Intermediate tax-exempt]

Post by 67Bosox » Thu Mar 26, 2020 1:49 pm

Can the change in NAV of bond funds be due to many people conducting rebalancing? With the steep drop in equity prices, don't you think people are transferring the higher percentage in their bond bond exposure, over to their now-lower percentage in equity exposure, in order to get back to their desired asset allocations?

TNOA
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Re: VWLUX and VWIUX [Long and Intermediate tax-exempt]

Post by TNOA » Thu Mar 26, 2020 3:45 pm

67Bosox wrote:
Thu Mar 26, 2020 1:49 pm
Can the change in NAV of bond funds be due to many people conducting rebalancing? With the steep drop in equity prices, don't you think people are transferring the higher percentage in their bond bond exposure, over to their now-lower percentage in equity exposure, in order to get back to their desired asset allocations?
I noticed and am interpreting the 15% drop in munis over the course of just a few days (in increments of +/-5% per day) felt more like a panic than cooler head rebalancing exercise.

TNOA
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Re: VWLUX and VWIUX [Long and Intermediate tax-exempt]

Post by TNOA » Thu Mar 26, 2020 4:13 pm

67Bosox wrote:
Thu Mar 26, 2020 1:49 pm
Can the change in NAV of bond funds be due to many people conducting rebalancing? With the steep drop in equity prices, don't you think people are transferring the higher percentage in their bond bond exposure, over to their now-lower percentage in equity exposure, in order to get back to their desired asset allocations?
All of this possible and your "Nobody Knows Nothing" lesson comes off very loud and clear. The question is what did we learn, and whether there is an opportunity here to modify the security inside the AA a different way. I am a VTEB investor, but looking at MUB it, it certainly behaved better. VTEB (SEC 1.31%) high to low in 10 days period was -20.6% with 80% AAA/AA, while MUB (SEC 1.80%) was -15.3% same period, with 90% AAA/AA. Just on its face value, very comparable ER, MUB would have been a better choice. But the bigger issue is, munis or no munis. I didn't have to question it this way prior to the drop (after studying 2008 crash and munis' behavior, I didn't have this detail as I do know this month). What surprised me most is BIV. We all know corporate debt is at very high - some say unsustainable - levels. So, I looked at BIV with close to 50% corporate debt. The drop during the same 10 day period from high to low, was 10%. Just confused as to what to do with my 30% bonds that are currently 50/50 VGIT/VTEB.

TNOA
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Re: VWLUX and VWIUX [Long and Intermediate tax-exempt]

Post by TNOA » Thu Mar 26, 2020 4:16 pm

yoyo6713 wrote:
Thu Mar 26, 2020 12:43 pm
TNOA wrote:
Thu Mar 26, 2020 9:25 am
15% comeback in VTEB - unreal !! Is this perhaps the time we should liquidate VTEB and put it all into VGIT? This whole move (not like how it had played out during 2008) truly bothered me as someone who has his 30% bonds portfolio 50/50 VGIT/VTEB. This time we may have been saved by the Fed repurchases, but is this worth the risk going forward? Any thoughts?
I certainly won't put more than 30% in munis going forward having learned the lesson this time around. Yes default probability seemed to have gone up but if rates stays low, what other options do we have available to beat the inflation? move into equities? :twisted:
I think, your question is an AA question and you may of course be questioning your AA. However you must be more diligent in the way you choose your AA as it seems to me that is a higher order preparation before investing than the selection of a particular security to fulfill your AA. Just wanted to mention that to me, you should decide on that not during a volatile market period like this, but more in calmer and more peaceful waters.

hudson
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Re: VWLUX and VWIUX [Long and Intermediate tax-exempt]

Post by hudson » Thu Mar 26, 2020 4:18 pm

TNOA wrote:
Thu Mar 26, 2020 4:13 pm
Just confused as to what to do with my 30% bonds that are currently 50/50 VGIT/VTEB.
Have you considered Baird's Intermediate muni, BMBIX?
The ER is .30, but it's almost 100% AAA/AA with 47% prefunded bonds.
Is there a safer muni?

annu
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Re: VWLUX and VWIUX [Long and Intermediate tax-exempt]

Post by annu » Thu Mar 26, 2020 7:36 pm

I just sold all VWLUX holding, half yesterday and rest today. Knowing how states will need to deal with covid impact, and with first knowledge of how we are not following the best approach to mitigate spread, I am glad I was able to pull out with lower losses and start investing into stocks, but now with market coming back up, I may not need to rebalance with the amount I sold, after rebalancing, may invest extra into stocks next quarter.

Never bonds in taxeable, ever again.........

TNOA
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Re: VWLUX and VWIUX [Long and Intermediate tax-exempt]

Post by TNOA » Thu Mar 26, 2020 10:46 pm

annu wrote:
Thu Mar 26, 2020 7:36 pm
I just sold all VWLUX holding, half yesterday and rest today. Knowing how states will need to deal with covid impact, and with first knowledge of how we are not following the best approach to mitigate spread, I am glad I was able to pull out with lower losses and start investing into stocks, but now with market coming back up, I may not need to rebalance with the amount I sold, after rebalancing, may invest extra into stocks next quarter.

Never bonds in taxeable, ever again.........
I feel your pain, or stronger yet: your pain is my pain too. However, I need the income generated by these after-tax instruments. Not sure how I should approach this. Today, multiple times my fingers almost triggered the sell button on my VTEB, then couldn't. Tomorrow, is another day.

TNOA
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Re: VWLUX and VWIUX [Long and Intermediate tax-exempt]

Post by TNOA » Thu Mar 26, 2020 10:59 pm

hudson wrote:
Thu Mar 26, 2020 4:18 pm
TNOA wrote:
Thu Mar 26, 2020 4:13 pm
Just confused as to what to do with my 30% bonds that are currently 50/50 VGIT/VTEB.
Have you considered Baird's Intermediate muni, BMBIX?
The ER is .30, but it's almost 100% AAA/AA with 47% prefunded bonds.
Is there a safer muni?
The difference in SEC-yield, ER, number of holdings (to an extent) and the difference in all three total return numbers in favor of VTEB for 3, 4, 5-year periods were the reasons why I went with VTEB (versus BMBIX) back in the day. They were the two funds I had to make a final choice on. I am not sure what and where I am on that now. Just, not easy.

annu
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Re: VWLUX and VWIUX [Long and Intermediate tax-exempt]

Post by annu » Thu Mar 26, 2020 11:05 pm

TNOA wrote:
Thu Mar 26, 2020 10:46 pm
annu wrote:
Thu Mar 26, 2020 7:36 pm
I just sold all VWLUX holding, half yesterday and rest today. Knowing how states will need to deal with covid impact, and with first knowledge of how we are not following the best approach to mitigate spread, I am glad I was able to pull out with lower losses and start investing into stocks, but now with market coming back up, I may not need to rebalance with the amount I sold, after rebalancing, may invest extra into stocks next quarter.

Never bonds in taxeable, ever again.........
I feel your pain, or stronger yet: your pain is my pain too. However, I need the income generated by these after-tax instruments. Not sure how I should approach this. Today, multiple times my fingers almost triggered the sell button on my VTEB, then couldn't. Tomorrow, is another day.
Thanks brother ...atleast it is comming back up, hopefully back to normal pretty soon. But impact on states of no work and unemployment is unknown and biggest reason I decided to tlh and get out. That and also I am in super high state tax region, and no local muni fund, if you happen to be in one that has local muni it miight be an option as first you know more about your state, second you get state tax relief as well.
Ultimately with all complexity, I was making less then a 3.2 % CD....

TNOA
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Re: VWLUX and VWIUX [Long and Intermediate tax-exempt]

Post by TNOA » Thu Mar 26, 2020 11:29 pm

annu wrote:
Thu Mar 26, 2020 11:05 pm
TNOA wrote:
Thu Mar 26, 2020 10:46 pm
annu wrote:
Thu Mar 26, 2020 7:36 pm
I just sold all VWLUX holding, half yesterday and rest today. Knowing how states will need to deal with covid impact, and with first knowledge of how we are not following the best approach to mitigate spread, I am glad I was able to pull out with lower losses and start investing into stocks, but now with market coming back up, I may not need to rebalance with the amount I sold, after rebalancing, may invest extra into stocks next quarter.

Never bonds in taxeable, ever again.........
I feel your pain, or stronger yet: your pain is my pain too. However, I need the income generated by these after-tax instruments. Not sure how I should approach this. Today, multiple times my fingers almost triggered the sell button on my VTEB, then couldn't. Tomorrow, is another day.
Thanks brother ...atleast it is comming back up, hopefully back to normal pretty soon. But impact on states of no work and unemployment is unknown and biggest reason I decided to tlh and get out. That and also I am in super high state tax region, and no local muni fund, if you happen to be in one that has local muni it miight be an option as first you know more about your state, second you get state tax relief as well.
Ultimately with all complexity, I was making less then a 3.2 % CD....
I don't think to save state taxes I would toy with a single state muni fund. "- The cure would be worse than the problem" -:) in that case, for me. Diversification is key, state tax exemption is 3rd or 4th priority down the line. I thought some more about this throughout the day. When a muni is spread over municipalities across the entire country, it really takes a black swan event to rattle all of them to halt. How often will something like this happen for a long term investor? Moreover, now that we have this experience under our belt to fight the war against the virus, aren't we going to be better prepared for another pandemic in the future? I bet we will. So, while this was an unpleasant experience, I think for me as a long term investor, this is a very rare event to impact such diversified fund's 4,000+ holdings all at once. So, I am leaning towards keeping my VTEB despite at the present day I am back to positive territory and have comfortable options (get out, replace it, etc). The only struggle for me would be if we do not come out of this current coronavirus pandemic anytime soon, or more unexpected bad news come out by which the market is spooked.

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