Quote:
Originally Posted by Carpediem
@audreyh1...
When you say "all distributions", are you referring to dividends *only*? No cap gains?
Thanks.
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No - in my case I really mean all distributions - dividend and cap gains distributions - are left in cash until I do my annual withdrawal and rebalance in Jan. Once I rebalance, the AA is back to where it is supposed to be.
This is simply a tax efficient way of handling distributions. I need to draw income from my portfolio in Jan, and almost all of my cap gains distributions are paid in December. So I don't worry about reinvesting them until I rebalance, and I don't rebalance until after I take my annual withdrawal.
I'm a total return investor, not an income investor. I don't care whether a distribution is interest/bond dividend, stock dividend, or cap gains distribution. I only care how much the total portfolio has increased or decreased over the year. I withdraw a fixed % or the portfolio each Jan based on the Dec 31 value.