I got a Vanguard pop-up the other day asking whether my purchases (largely of VTSAX) *edit: in my taxable account* should be classified as FIFO, Spec ID, or AvgCost. Vanguard's default is Average Cost, so that's what I was inclined to go with. My dad suggested Spec ID is best for harvesting losses or gains, but Vanguard notes that using a method other than Average Cost means I'll need records for any shares purchased before 1/1/12, and with regular, automatic share purchases, dividend reinvestments, and my habit of dropping a few extra dollars in there if I happen to have them, I haven't kept track of every investment. (Or any, really, although I assume I can go back through Vanguard's records and record each transaction, probably?)
My dad is my usual go-to for advice and I think I understand the theory behind why he likes Spec ID best, but he also likes complicated investments and active trading and thinks I'm crazy for using index funds, so I wondered if people who like to keep things simple had a different thought, or if I should do that and just go back and make a spreadsheet of every old trade. I'm moving my way-too-much-cash into VTSAX right now (putting extra cash in twice a month in addition to my regular investments), and I want to do whatever makes the most sense. I'd love any advice. Thanks!
*Thanks, Brewer.