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Best Method For Converting 50+ Stocks In To A 2 or 3 Fund Portfolio
Old 07-25-2022, 04:16 PM   #1
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Best Method For Converting 50+ Stocks In To A 2 or 3 Fund Portfolio

I just recently fired my AUM Wealth Management Company. My taxable brokerage account contains approx. 50+ individual stocks plus a few ETF's. My goal is to shift everything to a two or three, low-cost, index fund portfolio.

Just prior to me firing them, they had recently performed some tax loss harvesting (due to the market drop) and I currently have about a $300,000 capital loss inside this brokerage account.

If I were to bulk replace all existing equities (individual stocks and ETF's), I would incur a capital gain of about $110,000 but because I already have a loss of $300,000 then I'd still have a capital loss at years end.

Would you recommend that I do a bulk swap right now? Should I only sale those individual stocks/ETFs that currently have a loss and/or perform poorly? Here's a list of the stocks/equities:

TCEHY
LYFT
CAT
JNJ
MXI
EWT
DE
SNY
AVGO
IEUR
HMC
MDT
BAC
CCI
IYZ
KWEB
BOTZ
EWJ
GSK
ES
IXJ
UL
XLI
EWL
PPRUY
IGV
TTE
IHI
QQQ
VUG
KCE
WDAY
MA
FINX
SMH
TMO
XLY
RTX
BP
MRK
SHEL
PAYC
AZN
CVX
HLN
SLB
HAL
COST
LLY
COP
DVN
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Old 07-25-2022, 04:24 PM   #2
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If you’ve decided to move all your equities from individual stocks to low cost etfs there’s no better time than right now, because you can offset all the gains.
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Old 07-25-2022, 04:27 PM   #3
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If you’ve decided to move all your equities from individual stocks to low cost etfs there’s no better time than right now, because you can offset all the gains.
Exactly. Keep it simple and just go for it.
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Old 07-25-2022, 04:53 PM   #4
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Forgive my ignorance but I'm new to Fidelity, where my brokerage account is located. Can I place a trade that sells all of my stocks/etfs and then immediately purchase the 2 or 3 low cost index funds? Or do I need to sell each one individually?
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Old 07-25-2022, 04:55 PM   #5
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Forgive my ignorance but I'm new to Fidelity, where my brokerage account is located. Can I place a trade that sells all of my stocks/etfs and then immediately purchase the 2 or 3 low cost index funds? Or do I need to sell each one individually?
You will have to sell all the stock and ETF positions individually to have records of final sales prices. You can buy new (whatever you choose) ETFs anytime you have cash available to trade.
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Old 07-25-2022, 05:36 PM   #6
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Forgive my ignorance but I'm new to Fidelity, where my brokerage account is located. Can I place a trade that sells all of my stocks/etfs and then immediately purchase the 2 or 3 low cost index funds? Or do I need to sell each one individually?
It would be convenient to have a sell it all button I like some of your stocks and ETFs more than others but it you are going for simplicity sell it all . You may have to wait for the trades to settle before you place your buy orders. If you trade when the market is open you can use market orders but if you want to enter trades for execution the next day it is probably safer to use limit orders.
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Old 07-25-2022, 05:44 PM   #7
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It would be convenient to have a sell it all button I like some of your stocks and ETFs more than others but it you are going for simplicity sell it all . You may have to wait for the trades to settle before you place your buy orders. If you trade when the market is open you can use market orders but if you want to enter trades for execution the next day it is probably safer to use limit orders.
I was just chatting with Fidelity and they said their ActiveTraderPro app allows you to sell it all at the same time (I'm playing around with it now)... looks like you still have to type in each stock/etf manually and build a queue of trades.

I just don't want to screw it up because I have $1.5 million sitting in there :-)
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Old 07-25-2022, 05:47 PM   #8
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I was just chatting with Fidelity and they said their ActiveTraderPro app allows you to sell it all at the same time (I'm playing around with it now)... looks like you still have to type in each stock/etf manually and build a queue of trades.

I just don't want to screw it up because I have $1.5 million sitting in there :-)
I'm not a Fidelity account holder and know nothing about the ActiveTradePro system. I suppose it sells the stocks on market prices vs. bid/ask spreads?

Something to ask about as market orders may not be the best way to get good sales prices.
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Old 07-25-2022, 06:33 PM   #9
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I agree sell it all now to offset the gains with the losses. You will still have lot of carryover losses for future years. This year's taxes will be a bunch of documentation, but future years will be easy.

It's not too hard to just sell each one. Especially if you do market order sale, it will transact almost instantly. It will take approx 2-3 days for the money to be available for reinvesting. Then you can buy the funds you want for the simplified self directed portfolio.
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Old 07-25-2022, 06:40 PM   #10
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If you have a margin account, you should be able to sell and buy on the same day.
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Old 07-25-2022, 08:08 PM   #11
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You could also look to see if the gains are concentrated in a few positions you'd like to keep.

For example, I noticed that QQQ is in the list. That is the NASDAQ 100 Index. You may just want to keep that if a tech-centric index will be part of your mix.

But otherwise, hit the ejection handle and rationalize the portfolio into something you can manage easily.
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Old 07-25-2022, 08:39 PM   #12
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Were dividends being reinvested?

If so, that could create some wash sales, and complicate the accounting. Though technically, it shouldn't matter if you sell all of that stock, the IRS may still want to see the accounting. Even then, you might get away with a consolidated statement, but I read here that someone had the IRS come back and ask for the individual trades (what, the IRS needs more work?).

But if you look at a stock, and the reinvestment was more than 30 days ago - no problem. So it shouldn't be hard to avoid this, it just might take 30 more days for a few of them.

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Old 07-25-2022, 08:41 PM   #13
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I agree sell it all now to offset the gains with the losses. You will still have lot of carryover losses for future years. This year's taxes will be a bunch of documentation, but future years will be easy.

It's not too hard to just sell each one. Especially if you do market order sale, it will transact almost instantly. It will take approx 2-3 days for the money to be available for reinvesting. Then you can buy the funds you want for the simplified self directed portfolio.
Are you sure of “2-3 days for the money to be available”? I am able to buy as soon as I have sold and I don’t have a margin account.
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Old 07-25-2022, 08:48 PM   #14
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If you have a margin account, you should be able to sell and buy on the same day.
You don’t need a margin account for that
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Old 07-25-2022, 10:44 PM   #15
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You should have fired them a long time ago. Nobody has the time to actively watch a portfolio with 50 different accounts.

With the stock market in the position like it is, I have no suggestions for you. A lot of studying of each account's past history would be required. It might be time for professional guidance on how to simplify your portfolio to where it's manageable.
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Old 07-26-2022, 09:15 AM   #16
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You should have fired them a long time ago. Nobody has the time to actively watch a portfolio with 50 different accounts.

Right! It took a lot of convincing my spouse that we didn’t need a FA to manage our investments.
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Old 07-26-2022, 09:49 AM   #17
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Are you sure of “2-3 days for the money to be available”? I am able to buy as soon as I have sold and I don’t have a margin account.
As they say, it depends. For Fidelity funds, the money is available as soon as the sale is done at end of the trading day and money is there next morning. For individual stocks it can take a little longer. At least that is my experience. I don't bother with a margin account either. If you look at your Fidelity account, it will tell you when and how much money is available for reinvestment. Since I am mostly a buy and hold, waiting a day or two for reinvesting the funds from a sale is usually not an issue.
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Old 07-26-2022, 06:20 PM   #18
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As they say, it depends. For Fidelity funds, the money is available as soon as the sale is done at end of the trading day and money is there next morning. For individual stocks it can take a little longer. At least that is my experience. I don't bother with a margin account either. If you look at your Fidelity account, it will tell you when and how much money is available for reinvestment. Since I am mostly a buy and hold, waiting a day or two for reinvesting the funds from a sale is usually not an issue.

Well I sold quite a few stocks/ETFs today and was able to immediately purchase shares with those proceeds. Only caveat is they don’t let you sell the newly purchased equity for two days… but I have no plans to do it as I put all of it in VOO
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Old 07-26-2022, 08:25 PM   #19
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Well I sold quite a few stocks/ETFs today and was able to immediately purchase shares with those proceeds. Only caveat is they don’t let you sell the newly purchased equity for two days… but I have no plans to do it as I put all of it in VOO
That has been my experience too. So for the folks who said it takes 2 to 3 days, where did that come from
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Old 07-27-2022, 06:16 AM   #20
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That has been my experience too. So for the folks who said it takes 2 to 3 days, where did that come from
T+2 settlement

https://www.investor.gov/introductio...ins/updated-10

but SEC doesn't care if you don't have to wait
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