Author Topic: Selling VXUS and buying VTI ETF  (Read 2890 times)

Bluethunder

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Selling VXUS and buying VTI ETF
« on: January 26, 2017, 11:00:04 PM »
Hello.

I have about $20000 invested in Vanguards VXUS (taxable account).  Right now it is showing as an Unrealized Loss of about $1000.  I want to sell my whole position and reinvest into VTI.  I've been seeing the phrase "wash sale" but I'm thinking that the funds are different enough that my $1000 loss would somehow help me on my taxes?  I just wanted to get some opinions before I do anything stupid.

Kalergie

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Re: Selling VXUS and buying VTI ETF
« Reply #1 on: January 26, 2017, 11:41:34 PM »
A few questions that could help you make the right decision:

Why did you buy VXUS in the first place?
Do you already hold VTI or do you want to shift from 100% intl to 100% USA?
Why are you inclined to do this move? Because your VXUS lost a 1,000$?
What will you do if VTI drops a 1,000$ after you bought it? Will you go back to VXUS because it might have gone up a 1,000$
Did you make an investment strategy before you bought VXUS? If yes, what is it and why are you changing it now? If not, please think about a strategy that you can stick to.





markbike528CBX

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Re: Selling VXUS and buying VTI ETF
« Reply #2 on: January 26, 2017, 11:46:42 PM »
SELL, it will make my near future VXUS buy even cheaper :-)

I was just advised to buy more international ( via VXUS) by by a Vanguard advisor.

I was planning to anyway.
 

Bluethunder

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Re: Selling VXUS and buying VTI ETF
« Reply #3 on: January 26, 2017, 11:50:45 PM »
I bought VXUS because I was basically trying to buy the whole stock market.  But I'm thinking that VTI has companies in it that have international components anyway so makes sense to just stick to plain VTI.  The expense ratio is also lower, but I guess going from .12 to .05 isn't saving much.  I have about $40000 in VTI right now and I plan on just holding this forever.  I'm trying to simplify.  But maybe its not a good idea?

Kalergie

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Re: Selling VXUS and buying VTI ETF
« Reply #4 on: January 27, 2017, 12:11:56 AM »
I bought VXUS because I was basically trying to buy the whole stock market.  But I'm thinking that VTI has companies in it that have international components anyway so makes sense to just stick to plain VTI.  The expense ratio is also lower, but I guess going from .12 to .05 isn't saving much.  I have about $40000 in VTI right now and I plan on just holding this forever.  I'm trying to simplify.  But maybe its not a good idea?

Would you say this if VXUS had gained rather than lost? Going all US has its merit and you'll probably find many investors who are 100% VTI. But your first sentence indicates why you initially bought VXUS and you will find a lot of investors who would agree with you. At this stage, it won't matter much if you change your asset allocation since your portfolio is still small. But as you are growing your stash, be wise and don't flip flop around!

AdrianC

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Re: Selling VXUS and buying VTI ETF
« Reply #5 on: January 27, 2017, 05:34:32 AM »
Vanguard recommend 60% VTI, 40% VXUS for a diversified portfolio.

VXUS has a lower valuation than VTI (if that matters...maybe...maybe not).

But, if you insist on selling you will get a tax-loss for that $1000. Wash sale applies to like securities only. VTI and VXUS are not.

NoStacheOhio

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Re: Selling VXUS and buying VTI ETF
« Reply #6 on: January 27, 2017, 06:53:16 AM »
I bought VXUS because I was basically trying to buy the whole stock market.  But I'm thinking that VTI has companies in it that have international components anyway so makes sense to just stick to plain VTI.  The expense ratio is also lower, but I guess going from .12 to .05 isn't saving much.  I have about $40000 in VTI right now and I plan on just holding this forever.  I'm trying to simplify.  But maybe its not a good idea?

VXUS is international excluding United States, and VTI is United States total market index. Wash sale doesn't apply because the funds are basically completely opposite. But you need to pick an allocation and stick with it. There are always scenarios in which you need to change your allocation, but think through ahead of time what might trigger a change (major life event, retirement, etc.). If you just want to do some tax-loss harvesting, but maintain your allocation, then choose another fund that tracks a different international index (say VEA).