VBTLX to VWENX

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rch2021
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Joined: Sat Feb 20, 2021 11:44 am

VBTLX to VWENX

Post by rch2021 »

any thoughts on moving Vanguard Total Bond Market Index Fund Admiral Shares to Vanguard Wellington Fund Admiral Shares to capture lost on bonds and in a couple of months move back?
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vineviz
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Re: VBTLX to VWENX

Post by vineviz »

First, do you REALLY have a big enough loss in VBTLX to justify executing a tax loss harvesting maneuver? It's only down about 3% YTD.

Second, VWENX seems like a terrible choice to replace VBTLX since VWENX is mostly stocks. The obvious replacements for VBTLX would be Vanguard Interm-Term Bond Index (VBILX) and Vanguard Core Bond (VCOBX).
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch
livesoft
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Re: VBTLX to VWENX

Post by livesoft »

Why would you care to capture a loss in a tax-advantaged account where many people hold their bond funds?
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Topic Author
rch2021
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Re: VBTLX to VWENX

Post by rch2021 »

thankyou I thought $8000 loss would be worth it for a couple of months I bought VBTLX at its high in August of 2020 $11.65 and I would buy back VBTLX after 30 days or so to start over at the lower price
livesoft
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Re: VBTLX to VWENX

Post by livesoft »

rch2021 wrote: Mon May 03, 2021 9:17 am thankyou I thought $8000 loss would be worth it for a couple of months I bought VBTLX at its high in August of 2020 $11.65 and I would buy back VBTLX after 30 days or so to start over at the lower price
It is still not clear to me if this VBTLX is held in a taxable account or not. Can you clarify please?

If it is held in a taxable account, then I would suggest a portfolio review in order to request some asset location advice.
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Topic Author
rch2021
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Re: VBTLX to VWENX

Post by rch2021 »

all of my 3 index VBTLX VTSAX VTIAX are in my ira. allocation set to risk this was just a thought I am happy with my decisions so far just need to be content and have faith and don"t peek that is the hard part however I will follow Mr Bogle plan to stay the course thanks again
mmcmonster
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Re: VBTLX to VWENX

Post by mmcmonster »

rch2021 wrote: Mon May 03, 2021 9:53 am all of my 3 index VBTLX VTSAX VTIAX are in my ira. allocation set to risk this was just a thought I am happy with my decisions so far just need to be content and have faith and don"t peek that is the hard part however I will follow Mr Bogle plan to stay the course thanks again
I think what Livesoft was alluding to was: If you have enough in your tax-deferred space (which would include your IRA), then all your investments could be in that space.

Tax loss harvesting, however, only works in taxable account. But you shouldn't have bonds in your taxable account, because bonds are tax-inefficient. If you do have bonds in your taxable account, you should have a good reason (ie: you have so many bonds that your tax-deferred accounts are full of bonds or REITs and you need more bond exposure).

The idea is that money is fungible. You should place your least tax-efficient funds (ie: your bonds) in your IRA and your most tax-efficient funds (ie: VTSAX and VTIAX) in your taxable account IF your tax-deferred accounts are full.

As you start adding money to your overall investments and have more invested than would fill your IRA, add VTSAX and VTIAX in your taxable account and convert the VTSAX and VTIAX in your IRA to bonds (VBTLX), so that your overall stocks:bonds ratio is where you want it. This may mean that your IRA is 20% stocks and 80% bonds and your taxable account is 100% stocks.
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watchnerd
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Re: VBTLX to VWENX

Post by watchnerd »

mmcmonster wrote: Mon May 03, 2021 10:05 am
rch2021 wrote: Mon May 03, 2021 9:53 am all of my 3 index VBTLX VTSAX VTIAX are in my ira. allocation set to risk this was just a thought I am happy with my decisions so far just need to be content and have faith and don"t peek that is the hard part however I will follow Mr Bogle plan to stay the course thanks again
I think what Livesoft was alluding to was: If you have enough in your tax-deferred space (which would include your IRA), then all your investments could be in that space.
Sometimes you just run out of space because your tax preferred space is much smaller than your taxable.

This is true in our case.
60% Global Market Stocks (VT,FM) | 38% Global Market Bonds | 2% Alts || LMP TIPS/STRIPS || RSU + ESPP
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watchnerd
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Re: VBTLX to VWENX

Post by watchnerd »

rch2021 wrote: Mon May 03, 2021 9:53 am all of my 3 index VBTLX VTSAX VTIAX are in my ira. allocation set to risk this was just a thought I am happy with my decisions so far just need to be content and have faith and don"t peek that is the hard part however I will follow Mr Bogle plan to stay the course thanks again

If you want to shift your bond AA to stocks to 'catch up' what you lost in bonds (Note: I don't think that's smart), why wouldn't you just allocate some bonds into the stock funds you already have?

Why do you need / want a different fund entirely?
60% Global Market Stocks (VT,FM) | 38% Global Market Bonds | 2% Alts || LMP TIPS/STRIPS || RSU + ESPP
KlangFool
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Re: VBTLX to VWENX

Post by KlangFool »

rch2021 wrote: Mon May 03, 2021 9:53 am all of my 3 index VBTLX VTSAX VTIAX are in my ira. allocation set to risk this was just a thought I am happy with my decisions so far just need to be content and have faith and don"t peek that is the hard part however I will follow Mr Bogle plan to stay the course thanks again
rch2021,

Then, you do not generate a tax loss by selling VBTLX in your IRA.

KlangFool
40% VWENX | 12.5% VFWAX/VTIAX | 11.5% VTSAX | 16% VBTLX | 10% VSIAX/VTMSX/VSMAX | 10% VSIGX| 40% Wellington 40% 3-funds 20% Mini-Larry
tibbitts
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Re: VBTLX to VWENX

Post by tibbitts »

rch2021 wrote: Mon May 03, 2021 7:48 am any thoughts on moving Vanguard Total Bond Market Index Fund Admiral Shares to Vanguard Wellington Fund Admiral Shares to capture lost on bonds and in a couple of months move back?
Just one thought: it's a bad idea, not even considering that you don't benefit from losses in an IRA.
Topic Author
rch2021
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Joined: Sat Feb 20, 2021 11:44 am

Re: VBTLX to VWENX

Post by rch2021 »

Thanks again, the members of this blog believe it or not are very therapeutic and knowledgeable thanks for being there
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