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  • Transferring holdings

    Hello, I have been working on learning about investing over the last 6 months. (I just finished the Fire your Financial Advisor course). I feel like I am ready to manage my investments myself. I currently have 2 accounts with Personal Capital, one is a traditional IRA and one is a taxable account. I was getting ready to transfer my holdings over to Vanguard, but I got a little worried when I looked at what I had with Personal Capital. They have me invested in a bunch of different stocks and what I was looking to do was to invest in mutual funds like a S&P 500 index fund, to keep things simple. It seems to me that it may be hard to sell all those stocks to buy a mutual fund without getting in trouble with owing taxes on capital gains. Any Advice?

  • #2
    if it's in an IRA, nothing to worry about now

    if it's in a taxable account there's nothing you can do if you want to make the switch from stocks to index funds

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    • #3
      What do you mean, there's nothing you can do? For the taxable account, should I just make the switch and pay any taxes that I have to?

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      • #4
        Let’s assume you’re worried about a taxable account. You can sell anything with losses, then use those losses to offset capital gains. To the extent that you have gains, you can sell holdings that have long term capital gains and wait until your short term positions move from short term to long term gains.

        If you think we’re due for a pullback in the stock market due to the second wave of Covid-19, continued rioting and looting, or the ever-expanding success and geographic reach of CHAZ, then wait for the downturn for more tax loss harvesting. On the other hand, if things go up, you’ll kick yourself for not selling now.

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        • #5
          How much money are you talking about? If you’re moving to a better portfolio, is it worth it? If you aren’t, why are you changing? I don’t think your decision should be influenced by what you think will happen to the market in the near term, though. jmpo.
          Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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          • #6
            Originally posted by jfoxcpacfp View Post
            How much money are you talking about? If you’re moving to a better portfolio, is it worth it? If you aren’t, why are you changing? I don’t think your decision should be influenced by what you think will happen to the market in the near term, though. jmpo.
            I'm transferring around $240,000. I'm doing it because personal capital charges a asset under management fee, and I want to manage my money myself and reduce my fees.

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            • #7
              You need to analyze the taxable account.
              Yes you need to consider the tax for liquidating.
              That can be avoided by deciding to hold specific investments. Purely a personal cost/benefit choice.

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              • #8
                $240k is alot to re-allocate all at once.
                You can transfer everything "in-kind" to Vanguard to start minimizing on-going fees.
                Then I would do what Hank said in his first paragraph, and consider what jfoxcpacfp said in her last sentence.
                You might need to take a few years to spread the LTCG before getting to the allocation you want.
                OTOH, if there are some solid stocks with very high capital gains, they might be worth just keeping, also,

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