The Money Mustache Community
Learning, Sharing, and Teaching => Investor Alley => Topic started by: greenjb on September 15, 2017, 08:38:15 PM
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Mustachians,
Prompted by this forum, I recently parted ways with my broker and transferred the brokerage fund over to Vanguard. I'm a big believer in simplicity. Apart from this incoming fund, my non-retirement money is split between VTSAX, VTIAX, and VBTLX. Here is my dilemma: the broker has me invested in about ten different funds, and I can't decide whether I should liquidate them (and take the capital gains tax hit) or leave them as is -- or sell a few of the funds with higher expense ratios and reinvest just that money. Also, the fund with the highest expense ratio (DoubleLine Core Fixed Income Fund Class N) offers the option to "exchange" along with Buy/Sell. I'm not even sure what that is. I'd love advice on how I should proceed. I'll paste the positions below. Thanks in advance!
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There is no point moving the funds to Vanguard if you dont sell them.
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SCHB is a fine fund. E.g., see Three-fund portfolio - Bogleheads (https://www.bogleheads.org/wiki/Three-fund_portfolio#Other_than_Vanguard.2C_Boglehead-style). No need to sell it unless it doesn't fit your desired asset allocation (AA) (https://www.bogleheads.org/wiki/Asset_allocation). Thus, determining what you want your AA to be should come before any buying and selling.
The "exchange" option means "sell some (or all) of this, and immediately buy [some specified fund] with the proceeds."
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That top one looks like the biggest loser. Fixed income with fees that high?! Some of the rest are mostly fine if you don't want to take capital gains immediately, though that's up to you. My account at Wealthfront has a couple of those Schwab ETFs and they're a perfectly fine alternative to Vanguard. (Wealthfront mostly prefers Vanguard funds, but sometimes they swap for tax loss harvesting.)
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SCHB is a fine fund. E.g., see Three-fund portfolio - Bogleheads (https://www.bogleheads.org/wiki/Three-fund_portfolio#Other_than_Vanguard.2C_Boglehead-style). No need to sell it unless it doesn't fit your desired asset allocation (AA) (https://www.bogleheads.org/wiki/Asset_allocation). Thus, determining what you want your AA to be should come before any buying and selling.
The "exchange" option means "sell some (or all) of this, and immediately buy [some specified fund] with the proceeds."
And note that you will still have a tax liability associated with any capital gains.
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There is no point moving the funds to Vanguard if you dont sell them.
Don't I save the 1 percent management fee I was paying the broker?
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There is no point moving the funds to Vanguard if you dont sell them.
Don't I save the 1 percent management fee I was paying the broker?
Yes, you do.
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I guess it depends on your personal arrangment. My managed funds were without any management charges on the account, but each fund paid my advisor. The funds charged 2.5% MER and 6% DSC regardless of which broker I hold them at.
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