Rebalancing with Vanguard

[DektolMan]

Every Jan. 1st I rebalance and this year I want to slice & dice using a Lazy Portfolio from Paul Merriman FundAdvice.com - Suggested Portfolios

Can I take all my funds in my IRA, move them to Prime MM then turn around the same day & move the funds from Prime MM to others funds using the percentage I need. It seems to me this would be an easy way to do this but I'm not sure if Vanguard allows this.

ADUM

 

[LOL!]

It seems like this would be a question that Vanguard can answer with authority rather than the folks here. I will say that if you want to do something complicated, CALL THEM UP. Don't try to do it through the internet.

 

[DektolMan]

Calling them probably would be the best thing to do.

Thanks,

ADUM

 

[bigla]

I would call them. I know VG won't allow you to make more than one internet or phone trade in 60 days (by letter as often as you want) for most of their equity funds, to discourage "day trading" and increasing costs. I'm not sure if your rebalancing plan would be allowed?
I am a slice and dicer and use an excel spreadsheet to keep track of my AA and use that to rebalance. It's more complicated but if you know how to use excel it does the math.
Good luck
Larry

 

[travelover]

Can't you just do a direct exchange and skip the intermediate MM fund step? You might be able to do a simple spread sheet to calculate how much to decrease some funds and how much to increase others to meet your AA.

 

[LOL!]

Can't you just do a direct exchange and skip the intermediate MM fund step? You might be able to do a simple spread sheet to calculate how much to decrease some funds and how much to increase others to meet your AA.

I have seen about half a dozen posts from folks who tried to avoid calling Vanguard and use the web site to adjust things. All the posts were complaints about how it was all screwed up. Typically, someone used percentages to move funds around without thinking that as soon as the first transaction occurred, the percentages changed. For example, move 10% of VMMXX to VTSMX and another 10% to VFIIX. But once 10% leaves VMMXX, the next 10% is a different dollar amount than the first.

Anyways, you are paying Vanguard to answer their phones. Make them do what you want by calling them up. More importantly, make them understand what you want them to do without you having to figure out a complicated web site.

 

[donheff]

Talk to VG and go over things carefully. It gets a little complicated because you are selling and buying at prices that will not be determined at the time you place your order -- the share prices are set at COB. Some people simply sell funds one day and then buy funds later when the cash is in their account. With the wild swings the market is making that can cause significant losses or gains but is not predictable. I moved funds around a few times recently to re-balance and move things from load funds into VG funds. I had a lot of cash available so I got around the timing problems by selling X number of shares in an equity fund late in the day (estimating the likely close price) and buying Y amount of shares in the target fund using cash (again, estimating the closing price to get the dollars swapped roughly equivalent). You can trade VG funds up until closing (4:00 PM) but you need to check with non-VG funds held in a brokerage account -- there are earlier deadlines for selling them. If I remember correctly, you can swap funds from one VG fund to another in the same account. But I don't think you can just set a dollar amount for funds you are selling (what if the fund lost all value at the closing hours?). You need to specify a number of shares, estimating the selling price if your target is a specific dollar amount.

 

[Retire Soon]

Every Jan. 1st I rebalance and this year I want to slice & dice using a Lazy Portfolio from Paul Merriman FundAdvice.com - Suggested Portfolios

Can I take all my funds in my IRA, move them to Prime MM then turn around the same day & move the funds from Prime MM to others funds using the percentage I need. It seems to me this would be an easy way to do this but I'm not sure if Vanguard allows this.

ADUM

The situation you have described will have to be done on two separate days. That is, there is no way to determine how much money will be in your money market account until after 4 p.m. EST on the day you choose to make the transactions. Mutual funds prices are set after the closing bell, where as stock prices fluctuate throughout the day.