Over the next few months we'll be rebalancing our ER portfolio. There's no hurry and I can crunch a spreadsheet from scratch, but I'd rather extend someone else's path than blaze my own trail.
Has anyone used a website or a rebalancing spreadsheet that could simplify the process of deciding which assets to hold in taxable accounts or Roth IRAs, as well as the number-crunching of how much to sell & buy?
If I decide to use a spreadsheet, is there a macro or ticker function that downloads share prices from a website? Ideally I'd click a button to update the latest prices before making a decision.
The reason for the rebalancing is Berkshire, which has swollen to over 35% of our ER portfolio. Last year we sold off our last mutual fund, so this year we'll sell some Berkshire shares and move the profits into other assets. When we're done we'll essentially have four asset classes spread among a taxable account and two IRAs:
- 23% Berkshire Hathaway (BRK/B),
- 23% spread between the Dow dividend achievers ETF (DVY) plus a few shares of Intel (INTC),
- 23% among the S&P600 small-cap value ETF (IJS) plus a few shares of Superior Industrial (SUP), KBW Retail Bank Index ETF (KRE), and spouse's TSP "S" shares, and
- 23% spread between the Powershares international dividends ETF (PID) plus a few shares of Tate & Lyle PLC (TATYY)
- 8% cash (money market & CDs)
The next decision is whether the assets should be in a taxable account or a Roth IRA. The remaining Berkshire shares will stay in the taxable account. No questions there.
The other individual stocks and the bank ETF will also stay in the taxable account. Over the next 3-4 years they'll be sold for spending cash, leaving us with Berkshire and the three bigger ETFs. Or if one of the bigger ETFs gets way out of whack (e.g., from 25% to 35%) then we'd sell a few shares of it. We're no longer picking individual stocks but we have no compelling reason to part with the ones we're holding.
I'm not sure what to do with spouse's TSP shares. They're only 2% of the total and not worth moving around or selling for other TSP funds. So I'll leave them alone until spouse's Reserve retirement (in 2009) forces a decision.
By happenstance the PID shares have ended up in the IRAs while the other assets are in the taxable account. We're not paying taxes on the dividends but we might be missing foreign tax credits, which I'll learn more about when I get our 2007 1099s. If the foreign tax credits appear to be a big deal then I could sell & buy the PID shares to move them from the IRAs to the taxable account. Of course then I'd have to sell & buy other shares to move them from a taxable account to the IRAs, which could be a fairly messy cap-gains tax bill. I guess I'd have to assess the dubious long-term value of the foreign tax credit against the tax impact.
DVY & IJS also throw off dividends which I don't mind paying taxes on. Or we could move them to the IRAs if we decided to move PID shares to the taxable account. It would greatly simplify our portfolio tracking to keep an asset classes in either the taxable account or an IRA and not splattered among them.
By not rebalancing until an asset gets way out of whack, I'm hoping that we won't be doing it more than two or three times a decade.
Any other issues or suggestions?
Has anyone used a website or a rebalancing spreadsheet that could simplify the process of deciding which assets to hold in taxable accounts or Roth IRAs, as well as the number-crunching of how much to sell & buy?
If I decide to use a spreadsheet, is there a macro or ticker function that downloads share prices from a website? Ideally I'd click a button to update the latest prices before making a decision.
The reason for the rebalancing is Berkshire, which has swollen to over 35% of our ER portfolio. Last year we sold off our last mutual fund, so this year we'll sell some Berkshire shares and move the profits into other assets. When we're done we'll essentially have four asset classes spread among a taxable account and two IRAs:
- 23% Berkshire Hathaway (BRK/B),
- 23% spread between the Dow dividend achievers ETF (DVY) plus a few shares of Intel (INTC),
- 23% among the S&P600 small-cap value ETF (IJS) plus a few shares of Superior Industrial (SUP), KBW Retail Bank Index ETF (KRE), and spouse's TSP "S" shares, and
- 23% spread between the Powershares international dividends ETF (PID) plus a few shares of Tate & Lyle PLC (TATYY)
- 8% cash (money market & CDs)
The next decision is whether the assets should be in a taxable account or a Roth IRA. The remaining Berkshire shares will stay in the taxable account. No questions there.
The other individual stocks and the bank ETF will also stay in the taxable account. Over the next 3-4 years they'll be sold for spending cash, leaving us with Berkshire and the three bigger ETFs. Or if one of the bigger ETFs gets way out of whack (e.g., from 25% to 35%) then we'd sell a few shares of it. We're no longer picking individual stocks but we have no compelling reason to part with the ones we're holding.
I'm not sure what to do with spouse's TSP shares. They're only 2% of the total and not worth moving around or selling for other TSP funds. So I'll leave them alone until spouse's Reserve retirement (in 2009) forces a decision.
By happenstance the PID shares have ended up in the IRAs while the other assets are in the taxable account. We're not paying taxes on the dividends but we might be missing foreign tax credits, which I'll learn more about when I get our 2007 1099s. If the foreign tax credits appear to be a big deal then I could sell & buy the PID shares to move them from the IRAs to the taxable account. Of course then I'd have to sell & buy other shares to move them from a taxable account to the IRAs, which could be a fairly messy cap-gains tax bill. I guess I'd have to assess the dubious long-term value of the foreign tax credit against the tax impact.
DVY & IJS also throw off dividends which I don't mind paying taxes on. Or we could move them to the IRAs if we decided to move PID shares to the taxable account. It would greatly simplify our portfolio tracking to keep an asset classes in either the taxable account or an IRA and not splattered among them.
By not rebalancing until an asset gets way out of whack, I'm hoping that we won't be doing it more than two or three times a decade.
Any other issues or suggestions?