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Selling VFWAX and purchasing VTIAX in taxable account
Old 01-08-2013, 08:33 AM   #1
gone traveling
Join Date: Apr 2011
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Selling VFWAX and purchasing VTIAX in taxable account

I presently own VFWAX(Vanguard FTSE All World Ex US Index) in a taxable account and was thinking of selling and purchasing VTIAX(Vanguard Total International Index).

The reason is twofold:
1. VTIAX has had a index change and is now more broadly diversified to include small caps.

2. On 1/3, I sold another fund for a long term gain and if I sell VFWAX, it will be for a long term loss which I could use to somewhat offset the gain.

Thoughts on this strategy? I assume VTIAX is fine for a taxable account?


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Old 01-08-2013, 09:34 AM   #2
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Well, as you wrote it I wouldn't call it a strategy since you are exchanging one fund for a very similar fund. Both are just fine in a taxable account.

However, if you had written, "I would like to tax-loss harvest my VFWAX and replace it with VTIAX, is that a good idea?" The answer is: It's a great strategy.

I would not do the exchange until VFWAX and VTIAX had stopped losing money in order to get the maximum tax-loss harvesting benefit. There is absolutely no rush on this at all. Maybe wait until a day when VFWAX or VTIAX have dropped 2% or more (watch VEU and VXUS for intraday pricing) and submit order before 4 pm.

Nonetheless, one should not let losses in a taxable account become long-term losses. One should TLH before they go long-term. So if any part of the VFWAX has a short-term loss position, sell it before it goes long-term.

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Old 01-08-2013, 10:00 AM   #3
gone traveling
Join Date: Apr 2011
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Thanks LOL.

At present for VFWAX, I have a STG of a couple of hundred dollars that is considered covered shares and a few thousand LTL that is non covered shares.
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Old 02-21-2013, 09:55 PM   #4
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Both are just fine in a taxable account.
How do you determine what is good for a taxable account? Less CG's?

I'm thinking of FNMIX which is an EM fund that pays monthly dividends. Or do I want one that pays quarterly dividends?
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