If I invest new funds into VTSAX, holding both VTSAX and VLCAX, how would tax-loss harvesting (TLH) work in practice? Specifically, if a TLH opportunity arises, I understand I could sell VLCAX to buy VTSAX. Can I also do the reverse simultaneously—sell VTSAX to buy VLCAX, effectively oscillating between the two without adding more funds solely for TLH purposes?I would invest new money into VTSAX (assuming you've satisfied the 30-day wash sale rule) and not worry about the orphaned VLCAX shares. If another opportunity to TLH VTSAX and VLCAX happens then you may end up with money in VFIAX or similar or even have a chance to put everything back into VTSAX. But I wouldn't worry about it.My question is: Should I open a new position in VTSAX for any new investments, or continue to invest in VLCAX? I'm contemplating a future switch back to VTSAX during a downturn, but the timing is uncertain.
I do try to keep a limited world of TLH partners (1-2 partners per asset class) so that I don't end up with too many funds. So if you need to TLH VTSAX shares in the future I'd reuse VLCAX first so that you avoid having a third fund.
(this whole post is based on the premise that you chose VTSAX in the first place for a reason)
Statistics: Posted by othrif — Sun Mar 24, 2024 11:40 pm — Replies 4 — Views 291