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Selling Fund with Tax Loss
Old 01-19-2016, 04:47 PM   #1
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Selling Fund with Tax Loss

I'm 99% sure I know the correct answer to this question, but need a little help with the emotional component of the decision.

In 1985, I was finally earning enough that I had money to invest beyond maxing out my 401K. My dad helped me pick out a couple of mutual funds. One of them, Acorn (ACRNX), I decided I liked a lot and continued investing in it until 2000, when I realized that putting more $$ into an actively managed fund that throws off significant distributions creates all kinds of tax hassles. So I started taking all of the distributions in cash and investing them more tax-efficiently in 2007 (later using them to live on after we retired).

Between a huge distribution in December (30+%) and the market downturn this month, the current value is slightly less than my cost basis (I have a mega-spreadsheet that includes all the reinvested distributions over the years). The tax loss isn't huge, but would give me some space for more Roth conversion this year.

Intellectually, I know I should sell it (it's 6-figures so not a trivial amount). But after 30 years, and excellent returns, it makes me sad to think about not continuing to have this investment that my late father helped me pick.

Interested to hear how others have handled such a situation.

"One of the funny things about the stock market is that every time one person buys, another sells, and both think they are astute." William Feather
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Old 01-19-2016, 04:57 PM   #2
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In 2000, I cleared out all my legacy investments and I was glad that I did. Then I did it again in 2009. Also glad I did it again.

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Old 01-19-2016, 05:08 PM   #3
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Sell most of it, and keep a little for old time's sake.
"Good judgment comes from experience. Experience comes from bad judgement." - Will Rogers
DW and I - FIREd at 50 (7/06), living off assets
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Old 01-19-2016, 06:23 PM   #4
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Yes, it's been tough. I sold my higher cost basis shares last year to lower the distribution paid out in Nov 2015.

Mine remaining stake is also now at a loss, after the drubbing small cap stocks have taken.

I'm going to sell it sometime before June when their next cap gains distribution is paid out. Due to the large redemptions in the fund next June's payout will likely also be large.

This has been a tough one - smaller active fund families - when companies get sold and management changes. Redemptions and reorgs. After 20, 30 years - things change.
Well, I thought I was retired. But it seems that now I'm working as a travel agent instead!
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Old 01-19-2016, 06:55 PM   #5
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ACRNX has a relatively high ER of 0.79%, a new manager as of this month, and only mediocre performance over time.

Go ahead and sell it.
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Old 01-19-2016, 07:04 PM   #6
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My father never helped me pick an investment. I'm not sure he ever invested. So can't address that part.

I would sell it, take the loss, and invest is as you see fit.

“Remember where you came from, where you're going, and why you created this mess you got yourself into in the first place.”
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