Author Topic: Stay or leave Vanguard Index Fund  (Read 972 times)

Blonde Lawyer

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Stay or leave Vanguard Index Fund
« on: December 09, 2018, 02:52:11 PM »
I have a sum of money in a Vanguard Index Fund that we now realize we will need to use the majority of in the next year or two.  That was not the plan when I put it in there a year ago.  It has about $1500 in gains at the moment.  I know the market can be volatile so I'm thinking of pulling it to their money market account or my savings account.  At the same time, this feels a bit like trying to time the market because if things were less volatile and going up and up I probably wouldn't feel I need to pull it.  That said, if I knew I was going to need it in a year or two, I wouldn't have put it there in the first place so the correct choice is probably to pull it.

If I do that, do I wait for a green day or is that still dangerous timing the market.  I feel like if I pull it on a day things tanked that's dumb because it could go back up the next day, but it could also fall more the next day. 

Thoughts?

mjr

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Re: Stay or leave Vanguard Index Fund
« Reply #1 on: December 09, 2018, 03:18:08 PM »
Look at the 2 extremes of what might happen over the short term.

What's the best that might happen over the next 6 months.  A 10% gain ?

What's the worst that might happen.  A 50% drop ?

If you need it in the short term, take it out of the market.

jacoavluha

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Re: Stay or leave Vanguard Index Fund
« Reply #2 on: December 09, 2018, 05:46:02 PM »
Sell tomorrow. Unless youíre just short of the one year holding period. Then I might wait just to be able to get the long term capital gains tax treatment. But agree, sell if you need the money short term.

You should have an emergency fund. And never put money in equities that you canít afford to lose.

Blonde Lawyer

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Re: Stay or leave Vanguard Index Fund
« Reply #3 on: December 09, 2018, 06:33:52 PM »
Thanks we do have an emergency fund.  This is an above and beyond that scenario.  I'd rather not go into detail here just yet for privacy purposes but I very much appreciate your advice.  Thank you.