EOY loss harvesting and going Long Muni bond fund

[perinova]

I usually don't do EOY loss harvesting but I noticed my bond fund VBTLX at -6% of cost. I also have VCADX which is the intermediate tax free bond fund for California.

I am thinking of selling it all and go to VCLAX, tax free long (16year horizon). The reason is that the yield is the same as a taxable intermediate fund and it may be a good idea to go long on bond funds now.

Shrewed move or I am out of my mind?

 

[Sunset]

If nothing else, you can loss harvest, and in 31 days buy back the same thing. Probably won't change a lot in price.
Could stash your money in a 1 month treasury while waiting or a high paying Money market fund, My Vanguard settlement fund pays 5.2% right now, for example.

Other brokerages have similar temporary spots too.

 

[TheWizard]

In general, TLHing should be done when share prices are down.
End of year has little to do with it...

 

[imbatman]

If you have taxes you will actually owe this year on gains and can reduce that down to a $3K loss credit on your tax return in April......I would definitely harvest that by switching to a similar investment before year end.

Do you live in California though? If not, not sure why you would limit your holdings to those from that state (never know when the whole thing might break off into the Pacific - don't you watch summer blockbusters? Ha ha kind of kidding but concentration risk is a little bit of a thing).

Grab an ETF........MLN or TFI for longer duration or MUB for gigantic and actively traded.

Or if you really want a MF, seems VWAHX is the longest duration with the lowest expense of the big managers.

 

[perinova]

If you have taxes you will actually owe this year on gains and can reduce that down to a $3K loss credit on your tax return in April......I would definitely harvest that by switching to a similar investment before year end.

Do you live in California though? If not, not sure why you would limit your holdings to those from that state (never know when the whole thing might break off into the Pacific - don't you watch summer blockbusters? Ha ha kind of kidding but concentration risk is a little bit of a thing).

Grab an ETF........MLN or TFI for longer duration or MUB for gigantic and actively traded.

Or if you really want a MF, seems VWAHX is the longest duration with the lowest expense of the big managers.

I am in California right now.
Who knows how California will fare >2040 as 16yrs is a long time.However since the yield curve has flatten going long seems an OK decision. (?!?)

VWAHX is a good option but a bit too risky maybe (combination of long and
high yield ).