Race from $2M to $4M...and Beyond!

[2sk22]

I haven’t paid super close attention to NW this year, but my QQQ is apparently up 45% this year!  I have it in a Roth account and sometimes wonder how it’s possible for so much money to be made by so many tech employees.  I’ve had it for so long that I forgot about it, but being up over 1000% it is becoming a substantial part of my NW…. The compounding is bonkers.

Jonathan Clements has a a nice blog post about how the effect of compounding sneaks up on you: https://humbledollar.com/2018/03/the-tipping-point/

[Car Jack]

There have been some big swings in the market this year - I was just looking at a spreadsheet where I track our NW. From mid July to the end of October, we had a decrease of almost 7% but much of that has already been reversed in just the past week! I did a big rebalance in March and haven't changed our asset allocation since then. Anyone else seeing big swings?

This "Anyone" freely admits she's not really paying attention. It's so unlikely that we'll ever run out of funds that I just don't worry about it any more.

I look forward to big swings.  Why?  Tax loss harvesting.  I was able to TLH $78,000 worth.  No, not a $78k loss, that's just what the sell/buy was.  I'm still under $3k in loss for this year.  Schwab's site is nice because I can go in and see what my realized loss is and if it flips over $3k, I'll do some selling for gains.

Now that everything is going up again, when I'm ready to buy, I'll buy.  I don't have to worry that I'm buying high because if things drop, then it'll be tax lost harvesting time again.

[ATtiny85]

Never understood being excited by a chance to TLH.

[ixtap]

Never understood being excited by a chance to TLH.

Especially in this case where they didn't reinvest. I see the tax benefits of selling at a loss more of a consolation prize when it happens.

[secondcor521]

Never understood being excited by a chance to TLH.

It's a way to reallocate in a taxable account without paying taxes.  If you don't need to reallocate in a taxable account, it's not really useful other than, depending on the situation, the $3K offset of ordinary income.

[Fomerly known as something]

Never understood being excited by a chance to TLH.

It's a way to reallocate in a taxable account without paying taxes.  If you don't need to reallocate in a taxable account, it's not really useful other than, depending on the situation, the $3K offset of ordinary income.

I harvested 30k or so from my bond funds last year changing between US and CA tax exempt.  I still have another 15k or so from changing between my old and new international funds a few years ago.  Never was out of the market and all 4 funds are ones I’m happy with.  When I start selling assets in retirement, it will keep my gains lower.

[ATtiny85]

When I start selling assets in retirement, it will keep my gains lower.

How so, didn’t you lower your basis? Or did you mean it a different way?

I TLH and appreciate the $3k knocked off at our pretty high marginal rate, but I would prefer a string of 2021 type years and not 2022 types. (I don’t bother with small TLH moves, I just keep buying) Car Jack seems to be thrilled with their sell low buy high technique.

[Fomerly known as something]

Because I can now offset the first 50k in gains from my paper losses.

[ATtiny85]

Because I can now offset the first 50k in gains from my paper losses.

But those 50k in gains just get you back where you were. I would prefer to have 50k in gains from the original spot. As ixtap said, it’s sort of a consolation prize. Useful to do, but it’s just a good repair job after a fender bender that allowed you get some old scratches repainted. Nice to have, but I would rather not have the accident. At least in most cases. I have used some market blips to improve my portfolio by getting out of some pre-MMM/Bogleheads investments that were not the best. But now, when VTSAX dumps, it is not enjoyable to harvest losses.

Anyway, we are here in this thread to be happy and encourage current members and welcome newcomers to this wonderful level of portfolios.

I normally only update the household portfolio spreadsheet twice a year, maybe only once in Dec. i keep loose track and make rebalancing moves when needed, but never update 401k levels or add dividend reinvestment values. If the market can stay calm and not loose its mind over the next five weeks, we will pin a new all time high on the board. Especially with what should be a sizable taxable extra contribution in late December. End of year is arbitrary (unless we are talking taxes), but still will be nice.

[ixtap]

End of year is arbitrary (unless we are talking taxes), but still will be nice.

We do our snapshots and rebalancing when RSUs vest. The vesting schedule changed when DH went part time, so we just skipped a snapshot rather than doing an extra.

[Car Jack]

Never understood being excited by a chance to TLH.

I see it as a chance to say "Oops, I bought too high, let's reset that and buy at the new, lower price and while we're at it, get a tax loss".  In this last bout, I sold BRK/b and bought SCHB.  The third I use for potential TLH pairs is VTI. 

If my taxable account goes to my heirs, everything gets stepped up in basis.  So even more win for the family.

[Bateaux]

My investment strategy has gotten more and more simple. Majority about 80 percent is S&P 500 or VTSAX. The rest in a stable value fund or cash. A company pension that will soon pay about 60K a year for the longest living of either me or my wife. Drawing 4% off the 401K will supply more money than we've ever spent. Concentrating on hiking, boating and biking. My time as an investor are coming to a close. Other than a few Roth transfers, financial life is going to be simple.

[Another Reader]

There have been some big swings in the market this year - I was just looking at a spreadsheet where I track our NW. From mid July to the end of October, we had a decrease of almost 7% but much of that has already been reversed in just the past week! I did a big rebalance in March and haven't changed our asset allocation since then. Anyone else seeing big swings?

This "Anyone" freely admits she's not really paying attention. It's so unlikely that we'll ever run out of funds that I just don't worry about it any more.

The rent checks, pension checks, and other sources of income roll in every month without fail.  Other than stacking cash in short term T-bills, I don't really look at the accounts much.  I guess if the SHTF in real estate, I might consider going into purchase mode again.

[Taran Wanderer]

We’re approaching behind territory (again), and I feel like we’re still in the middle of our accumulation phase. Well, also, a lot of what we have is tax-sheltered and in VTI or equivalent, so it’s not kicking off dividends or rents, and it feels awkward to think about selling it off. Instead, we’re still working. 

[flyingaway]

My investment strategy has gotten more and more simple. Majority about 80 percent is S&P 500 or VTSAX. The rest in a stable value fund or cash. A company pension that will soon pay about 60K a year for the longest living of either me or my wife. Drawing 4% off the 401K will supply more money than we've ever spent. Concentrating on hiking, boating and biking. My time as an investor are coming to a close. Other than a few Roth transfers, financial life is going to be simple.

I am in a similar boat, retired and no longer focused on fine tuning my portfolio. I have five years of expenses in CDs and another five years in total bond funds, the rest is in total market funds or similar. Our current focus is to enjoy life by spending money, booked our December trip to Mexico, January trip to Ecuador, and February-March trip to Asia, each one is longer than the previous one.

[Bateaux]

My investment strategy has gotten more and more simple. Majority about 80 percent is S&P 500 or VTSAX. The rest in a stable value fund or cash. A company pension that will soon pay about 60K a year for the longest living of either me or my wife. Drawing 4% off the 401K will supply more money than we've ever spent. Concentrating on hiking, boating and biking. My time as an investor are coming to a close. Other than a few Roth transfers, financial life is going to be simple.

I am in a similar boat, retired and no longer focused on fine tuning my portfolio. I have five years of expenses in CDs and another five years in total bond funds, the rest is in total market funds or similar. Our current focus is to enjoy life by spending money, booked our December trip to Mexico, January trip to Ecuador, and February-March trip to Asia, each one is longer than the previous one.

Once the total is big enough and the cash/bond portion of that is big enough you're done. Tax strategy maybe a little. I'm thinking we'll be in the 22 percent bracket most of our lives. If we move up a bracket, is that really a reason to complain in retirement!?