Taxable Account Advise Needed/Where to Go?

[MarieIG]

I have had a case of analysis-paralysis for years with my taxable accounts. Basically, I just looked at them, and froze.

I made my first move a few months ago, sold some funds (which had spewed capital gains), and am now looking at selling a stock that I have too much of and have held way too long. (Viacom & CBS) The Viacom merged with CBS and I have an overall loss basis. The market is high, the stock is low, but I already have too much cash from my recent sale; and will be ending up with way too much cash. (Frankly, I am afraid that the stock is on the road to disappearing altogether and would prefer to diversify the risk. While a fund may drop in value, I doubt all the stocks in the fund will go out of business.)

I understand that I can't time the market, but I am looking for some low cost suggestions/advise as to where to put the extra cash, i.e. Vanguard Total Stock ETF? Vanguard Total Bond ETF? Vanguard High Dividend Yield ETF?

This account is currently in TD Ameritrade. They just recently dropped their trading commission. So, should I dollar cost in (i.e. a certain percentage a month)? This cash is sitting in a TD brokerage account that has next to no interest. I am a very nervous investor with an (unjustified) fear of living under a bridge in a cardboard box syndrome. I have to tasar myself with a cattle prod to force myself to do (sell) anything, so lots of trading due to a drop in the price of the funds (above planned withdrawals) probably won't be an issue with me.

It appears that I will be retiring early next year at 59 1/2; and DH is retiring at the end of the year if that information is a factor. We will have health insurance and some monthly income for base expenses through DH's job (and I have some cash set aside which would cover a few years expenses, notwithstanding the above monies). We currently live in a high tax/ HCOL location; and hope to be doing some Roth conversions over the next five years.

Thank you.

[COcheesehead]

I would really need more of your total picture to begin to give any advice, but generally how much in equities does FireCalc say you need to reach your goal? I would start there, subtract equities you have elsewhere and reallocate to tax efficient ETFs.

[gwraigty]

Quote:

Originally Posted by COcheesehead I would really need more of your total picture to begin to give any advice,

+1

The right advice will depend on if you're leaning towards generating passive investment income vs. growth, or a good balance of the two, plus your diversification requirements, desire to minimize taxes (or not), etc. Of the 3 ETFs you've mentioned, over 90% of the High Dividend Yield ETF is also in the Total Stock ETF. So, it's not as simple as saying to just invest 1/3 in each of the three, you see.

[pb4uski]

Agree, not enough to go on but I think it is a good idea to get out of individual stocks and diversify into a stock fund. If you have other individual stocks with an unrealized gain you might consider also selling those and use the realized loss on ViacomCBS to offset any gains. If you're looking for a MM fund to park cash while you decide what to redeploy to, VMMXX is solid and was yielding 1.7% last time I looked.

[SecondCor521]

It sounds like you don't have a plan.

Write down your goals.

Then write down your Investment Policy Statement.

Then follow your IPS.

("Plans are worthless, but planning is everything." - Eisenhower, 1957.)

[MarieIG]

Quote:

Originally Posted by COcheesehead I would really need more of your total picture to begin to give any advice, but generally how much in equities does FireCalc say you need to reach your goal? I would start there, subtract equities you have elsewhere and reallocate to tax efficient ETFs.

I had trouble with FireCalc; I could not get it to take info past the initial page. I know I used it about a year ago, and was alright at that point. I'll try it again tomorrow morning.

Edited: It popped back up. I had to enter something about adobe flash. A page with a graph came up, which indicated 100 no matter the percent of equities. The information I entered included my husband's pension; social security; a 30 year life span; and our retirement accounts. I did not enter in the taxable account which I was referencing.

[MarieIG]

Quote:

Originally Posted by gwraigty +1 To The right advice will depend on if you're leaning towards generating passive investment income vs. growth, or a good balance of the two, plus your diversification requirements, desire to minimize taxes (or not), etc. Of the 3 ETFs you've mentioned, over 90% of the High Dividend Yield ETF is also in the Total Stock ETF. So, it's not as simple as saying to just invest 1/3 in each of the three, you see.

I think balance of income and growth; reduction of taxes (although certainly there would be some). Regarding diversification - I had thought that would be in Total Stock ETF? Are you thinking that I need to add in a Total Bond Fund?

[Dtail]

Quote:

Originally Posted by MarieIG I had trouble with FireCalc; I could not get it to take info past the initial page. I know I used it about a year ago, and was alright at that point. I'll try it again tomorrow morning.

Firecalc appears to be working fine.
Should be good for you tomorrow.

[MarieIG]

Quote:

Originally Posted by pb4uski Agree, not enough to go on but I think it is a good idea to get out of individual stocks and diversify into a stock fund. If you have other individual stocks with an unrealized gain you might consider also selling those and use the realized loss on ViacomCBS to offset any gains. If you're looking for a MM fund to park cash while you decide what to redeploy to, VMMXX is solid and was yielding 1.7% last time I looked.

Thanks. I have some individual stocks floating around. I will have to get the basis, and hopefully reduce some of those.

[mrfeh]

Quote:

Originally Posted by MarieIG Thank you.

Please read this page: https://www.bogleheads.org/wiki/Bogl...g_start-up_kit

[MarieIG]

Quote:

Originally Posted by mrfeh Please read this page: https://www.bogleheads.org/wiki/Bogl...g_start-up_kit

I am reading this - this weekend, thank you. I am thinking about an AA in that account of 75/20/5.

[Gumby]

It is my hope, after consolidating all our far-flung taxable, Roth tIRAs, 401k, 403b and 457 accounts at Vanguard, to implement Rick Ferri's Core Four Portfolio, with VMMXX as our cash holding account. I expect to assign the bond and stock components in the most tax efficient manner and to Roth convert yearly (but staying in the same overall allocation). So far, I've been having too much fun in retirement to sit down and actually make it happen. That can be my New Year's resolution.

[MarieIG]

The Cowardly Lion(ess) made some progress.

Sold enough Viacom to take an overall capital loss in that taxable account.

Bought some ETFs (all Vanguard - low cost)

I am aiming at this allocation for a stock/ bond split (not including cash) 75/25


Stocks: 75 percent: Goal

Total Stock Market: 50%
Total International Stock(yuck): 10%
High Yield (I can't help it); 10%
Dividend Appreciation (again, I can't help it) 5%

Bonds: Total Bond 10%
International Bond (again yuck, wondering if I really need it) 5%
TIPS 10%

Next weekend, my project is to track down individual stocks.

[gwraigty]

Quote:

Originally Posted by MarieIG The Cowardly Lion(ess) made some progress. Sold enough Viacom to take an overall capital loss in that taxable account. Bought some ETFs (all Vanguard - low cost) I am aiming at this allocation for a stock/ bond split (not including cash) 75/25 Stocks: 75 percent: Goal Total Stock Market: 50% Total International Stock(yuck): 10% High Yield (I can't help it); 10% Dividend Appreciation (again, I can't help it) 5% Bonds: Total Bond 10% International Bond (again yuck, wondering if I really need it) 5% TIPS 10% Next weekend, my project is to track down individual stocks.

Don't invest in anything you feel yuck about. It doesn't matter what some book, article, website, anyone says about it.

[pb4uski]

Quote:

Originally Posted by MarieIG .... Bonds: Total Bond 10% International Bond (again yuck, wondering if I really need it) 5% ...

Actually, BNDX has outperformed BND over the last 3 and 5 years, and was only slightly behind BND for the 1 year.... so I'm not sure why you are saying yuck.

[MarieIG]

Quote:

Originally Posted by pb4uski Actually, BNDX has outperformed BND over the last 3 and 5 years, and was only slightly behind BND for the 1 year.... so I'm not sure why you are saying yuck.

It's me investing against my natural inclination. My natural inclination BTW has not done well and is to completely ignore my assets or invest in all dividend paying stocks. I've come to realize that, a) this does not provide the appropriate diversification; b) this is far from being the most tax efficient; and c) I cannot pick individual stocks.

This new choice was based upon reading the Boogleheads recommendations for simple fund portfolios, and also at looking at the components of the Vangard Target Retirement Fund for my age group. But all-in-all it's somewhat painful to get started, rather like bad tasting (yucky) medicine. The fact is, I should have done this years ago.