Author Topic: TLH WITH VMMXX  (Read 2227 times)

George

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TLH WITH VMMXX
« on: August 26, 2015, 01:36:06 PM »
If I wanted to park moneys for TLH  in VMMXX, don't I have to set up VMMXX to not reinvest dividends and also choose " specific shares " to simplify things.  Are there any reasons do set it up this way, since this is not a bank account is a mutual fund that throws off small amounts of dividends etc.

Thank you in advance.   

forummm

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Re: TLH WITH VMMXX
« Reply #1 on: August 26, 2015, 04:53:53 PM »
What fund do you own now that you're trying to sell?

George

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Re: TLH WITH VMMXX
« Reply #2 on: August 26, 2015, 05:08:15 PM »
 I have VTSAX, but I want to bring more cash and park it in VMMXX until I'm ready to sell VTSAX and buy with the combine moneys VHCIX. I just need to know how I should set up VMMXX so it does not complicate things for me now or years later.       

forummm

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Re: TLH WITH VMMXX
« Reply #3 on: August 26, 2015, 07:50:59 PM »
I'm really confused about what you want to do. If you have VTSAX and the shares you've purchased are now worth less than what you paid for them you can sell them to harvest a tax loss. You probably don't want to just put them in VMMXX though because that's a money market fund and you'll be out of the market. You could just buy a similar fund like VFIAX (it's called an "exchange" from VTSAX to VFIAX). Then after 30 days you could exchange back to VTSAX if you want.

George

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Re: TLH WITH VMMXX
« Reply #4 on: August 26, 2015, 09:27:35 PM »
I understand and agree completely with what your saying, but I have a special circumstance where after I to sell VTSAX and I need to put the money on hold in the money market fund because I may be needing the money, when I decide I don't need the money I will buy like you suggested VFIAX. I also plan in the future to keep some money in the money market fund instead of the bank. I hope this clarifies things.
Could you help me on how to properly set up the money market fund, should I have the dividends not reinvested but go into my checking account and have the cost basis to specific shares ? 

Thanks

forummm

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Re: TLH WITH VMMXX
« Reply #5 on: August 27, 2015, 10:37:47 AM »
I understand and agree completely with what your saying, but I have a special circumstance where after I to sell VTSAX and I need to put the money on hold in the money market fund because I may be needing the money, when I decide I don't need the money I will buy like you suggested VFIAX. I also plan in the future to keep some money in the money market fund instead of the bank. I hope this clarifies things.
Could you help me on how to properly set up the money market fund, should I have the dividends not reinvested but go into my checking account and have the cost basis to specific shares ? 

Thanks

Money market funds don't have changes in value (except in a global financial crisis). You buy a share for $1 and sell it for $1. The earnings are paid in dividends. You don't need to worry about capital gains. Just park the money there until you need it. However, you can probably get better interest just putting it in a high-yield FDIC-insured savings account. Money market funds are paying almost nothing right now.

George

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Re: TLH WITH VMMXX
« Reply #6 on: August 27, 2015, 11:45:58 AM »
I understand, You also recommended I use VFIAX instead of VHCIX, but the reason I wanted to start harvesting with VHCIX is because I'm 60 and retired and I was looking for something less volatile than VTSAX & VFIAX and I noticed that VHCIX only declined 24% in 2008 where as VTSAX declined 37%, I know health care is not the safest but it has treated me very well over the past years.
I don't have another fund I can harvest with VHCIX, do you recommend one or any other two.
Do you use a third fund to harvest with VTSAX and VFIAX in case the market keeps dropping.

Thanks       

forummm

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Re: TLH WITH VMMXX
« Reply #7 on: August 27, 2015, 01:17:25 PM »
I understand, You also recommended I use VFIAX instead of VHCIX, but the reason I wanted to start harvesting with VHCIX is because I'm 60 and retired and I was looking for something less volatile than VTSAX & VFIAX and I noticed that VHCIX only declined 24% in 2008 where as VTSAX declined 37%, I know health care is not the safest but it has treated me very well over the past years.
I don't have another fund I can harvest with VHCIX, do you recommend one or any other two.
Do you use a third fund to harvest with VTSAX and VFIAX in case the market keeps dropping.

Thanks       

Don't look at relatively short term past returns. The healthcare fund is much less diversified than VFIAX. If you want something stable for retirement, you want to add bonds, not change to a less diversified (i.e. more risky) stock fund.

https://personal.vanguard.com/us/FundsInvQuestionnaire
https://personal.vanguard.com/us/funds/tools/recommendation
https://personal.vanguard.com/us/insights/saving-investing/model-portfolio-allocations
https://personal.vanguard.com/us/insights/investingtruths/investing-truth-about-risk
https://investor.vanguard.com/mutual-funds/balanced

You probably want something more like a LifeCycle or Target Retirement fund.