End of Year Decisions

[txtrader]

Well, here it is the end of year.......what to do, what to do.....

I have VTIAX , Vanguard Total International Index Fund......I've lost 9k on it this year..
Do I sell it as I'm going to need losses for tax return....do I sell it before dividends are paid....do I keep it and sell something else?

I guess what I'm asking is 'what are you doing with international investments'?

 

[Animorph]

Might be about the same either way, before or after dividends. Assuming the price decreases in line with the dividend amount, you will have a larger capital loss after the dividend. However you will have the gain of the dividend itself. If it is a 15% qualified dividend and you are paying 15% capital gains it'll be a wash in terms of total taxes, though you should have a little extra capital loss to use. If your CG tax rate or the dividend rate is different, than you might be better selling before or after the dividend.

I'm just leaving everything alone this year.

 

[RockyMtn]

I'm going to dump a good portion of my international funds and use the losses to offset some gains. Will buy back the funds I like in 31 days or may just sit on the cash until the folks in Europe get their act together. Will probably do it after distributions.

 

[easysurfer]

I'll probably end up buying more. Depending on how my asset allocations for the international portion shapes up. I'll do the percent calculations at the year end. If the percentage I have is low, I'll buy more to get that percentage back up.

 

[pb4uski]

I'll stand pat. Unfortunately I have plenty of capital loss carryforwards.

 

[Animorph]

One reason I'm not doing any tax loss harvesting is that if CG tax rates increase I'd rather leave the tax basis where it is. No sense getting 15% credit today and pay 20% a few years later. I should be fully into my taxable account sell-down and Roth conversion mode in about a year, so I won't have a really long time to make the tax savings pay off.

 

[Tif7]

I'm just leaving everything alone this year.

+1. I'm 40% non-us.

T

 

[W2R]

Me too. After rebalancing my international funds are supposed to represent only 13% of my portfolio, and I haven't changed that percentage.

When I rebalance in a couple of weeks and have to buy more of my international equity fund, I'll be buying low. I keep telling myself that.

 

[heirloom]

I don't know W2R...

Europe, China and the other EM are beginning to look bad because their exports are declining.
It's a big circle and until Europe settles, I can't see the EM countries picking up. It seems the only 2 countries that are doing good are Australia and UK.

I got out of my int'l. in the spring. I'll look at it probably in the middle of next yr., depending on how their economies are doing.

I'm doing what one of the analysts mentioned on CNBC: 30% fixed, 30% muni/corp bonds, 40% U.S. LC dividend paying stocks until the dust settles.

 

[FIREd]

International stocks represent only 2.9% of my portfolio at this time and I am not planning on making big moves until the end of the year.

 

[clifp]

I look at my taxable portfolio, anything in red by more than $250 gets sold between now and Dec 31 no exceptions.

Vanguard has 14 international funds, if you own the Vanguard Total International VTIAX, sell it and buy Tax managed international fund VTGMX, or the Total World (which includes US) VTWSX. Or sell it and buy some European, Pacific, and Emerging markets, or Schwab or Fidelity international index funds. The tax savings will far outweigh the minor differences in performance over the next few months.

Now if you have lots of capital losses from previous years, than I can see leaving it alone but really it is only two phones calls one now and another month or two from now.

 

[freebird5825]

I have only 8% of my portfolio in VEUSX and BHP. No changes planned.

 

[Trawler]

I know what you mean what to do?? In my case I am tax harvesting an international fund I have a loss on in a Non qualified acct to fund my 2011 Roth contribution with. I do not need the dividend income for cash flow so I plan on selling before that income hits the books as do not want show the income.

 

[txtrader]

Thanks, a lot of good advice here....I'll probably sell it...but, yikes, such a loss really hurts, think I'll stay away from international for a while.

 

[LOL!]

Tax-loss harvesting has 2 parts:
1. Sell to realize the loss.
2. Buy replacement shares to keep your asset allocation the same.

Those replacement shares are bought low since you sold low. Indeed, if international funds have done poorly, those are the funds you should be buying and not avoiding. In other words, whatever happened to "Buy Low, Sell High"?

 

[txtrader]

Tax-loss harvesting has 2 parts:
1. Sell to realize the loss.
2. Buy replacement shares to keep your asset allocation the same.

Those replacement shares are bought low since you sold low. Indeed, if international funds have done poorly, those are the funds you should be buying and not avoiding. In other words, whatever happened to "Buy Low, Sell High"?

Yes, I understand, still, I think I'll sit back and see how international goes for a while.

 

[pb4uski]

Yes, I understand, still, I think I'll sit back and see how international goes for a while.

Many people sat out during the market downturn in 08 (in my case not rebalancing into equities at the time because it was so scary) and wish we had kept the faith. The end result was sell low and buy high.

That and other lost opportunities over the years have taught me to just stay the course and rebalance when my AA gets out of whack so I agree with LOL!

If the choice becomes sell and stay out or hold, hold is likely to be the better decision in the long run based on my experience.

It is hard to steer into the apparent storm though....

 

[clifp]

If the choice becomes sell and stay out or hold, hold is likely to be the better decision in the long run based on my experience.

It is hard to steer into the apparent storm though....

Yes but there are other choices. VTIAX is down 17% YTD I don't get why it is hard to call Vanguard or use the website sell VTIAX and buy one of the numerous other very similar funds?

Take the loss folks, you will feel better in April.

 

[pb4uski]

Yes but there are other choices. VTIAX is down 17% YTD I don't get why it is hard to call Vanguard or use the website sell VTIAX and buy one of the numerous other very similar funds?

Take the loss folks, you will feel better in April.

I agree, if you can utilize the tax loss reasonably soon.

 

[heirloom]

I would sell it, put it in fixed income fund and buy back when everything settles. My VGTSX is -17% YTD too, and am glad I sold when I did.

But I really think it is going to get bad again. They were talking about the EEM fund today and they think it is on its way down because it is below the 50 day moving avg.

 

[ripper1]

Me too. After rebalancing my international funds are supposed to represent only 13% of my portfolio, and I haven't changed that percentage.

When I rebalance in a couple of weeks and have to buy more of my international equity fund, I'll be buying low. I keep telling myself that.

I feel your pain, W2R. My asset allocation calls for 15% of mine. Both my foreign funds RERFX and VGTSX are down 15% year to date. I am at 12% now so I will probably move 3% from others to get back in balance. Doing a morningstar xray though I am only 6% in Europe on a total basis.

 

[W2R]

I feel your pain, W2R. My asset allocation calls for 15% of mine. Both my foreign funds RERFX and VGTSX are down 15% year to date. I am at 12% now so I will probably move 3% from others to get back in balance. Doing a morningstar xray though I am only 6% in Europe on a total basis.

I'm presently at 11% VFWAX and and rebalancing will bring me back to 13%. Ugh. Yes, our situations and plans are remarkably similar.

 

[txtrader]

Anyone read this article? What do you think about UK's action?




Eurozone crisis: Foreign Office plans evacuation of expatriates
Britons living in Spain and Portugal could get government help to leave the countries if the crisis in the eurozone sends their banks into meltdown.


By Donna Bowater10:59AM GMT 18 Dec 2011

The Foreign and Commonwealth Office and the Treasury is putting measures in place to help evacuate thousands of expatriates living in Spain and Portugal in case they are stranded no access to their savings.
The two countries, which both have sizeable British populations, were among those made vulnerable by the "sustained deterioration" in funding.
Spain was warned by credit rating agency Fitch that it was facing a debt downgrade along with Italy, while Ireland, Belgium, Slovenia and Cyprus were also given the warning.
Meanwhile, around one million Britons live in Spain with around 50,000 in Portugal.
The Foreign Office said it was concerned they could be cut off from their accounts if the countries' banks called in loans.

Eurozone crisis: Foreign Office plans evacuation of expatriates - Telegraph

 

[Alan]

Anyone read this article? What do you think about UK's action?

Eurozone crisis: Foreign Office plans evacuation of expatriates - Telegraph

Now that is quite a decision to be facing if you are living in Spain and Portugal, when the UK Foreign Office are using comparisons to "Lebanon in 2006" in their statements.

“We are looking at how we can help evacuate them if the banks in Spain and Portugal collapse, getting people cash, things like that, sending planes. We did similar things in Lebanon in 2006. We are coordinating with the Treasury.”

 

[obgyn65]

Nothing.

I guess what I'm asking is 'what are you doing with international investments'?