John Galt
Dryer sheet aficionado
I saw on Vanguard that my current setting is to reinvest capital gains in all of my funds. I didn't even know what this meant, but after a bit of research I figured out this was the decision on what to do with profit from a stock that was sold at a higher price than it was bought.
So my question is, do index funds even have an capital gains? They're not buying and selling stocks, unless they're entering and leaving the index the fund is tracking right? So for example a Total Stock Market index should have no capital gains to redistribute?
Also, for active funds that do trade in and out, what do most bogleheads do, do you reinvest capital gains?
Thanks for the help in advance.
So my question is, do index funds even have an capital gains? They're not buying and selling stocks, unless they're entering and leaving the index the fund is tracking right? So for example a Total Stock Market index should have no capital gains to redistribute?
Also, for active funds that do trade in and out, what do most bogleheads do, do you reinvest capital gains?
Thanks for the help in advance.