Vanguard Growth & Income Inv VQNPX

[alloykat]

I purchased this fund 10 years ago in a taxable account when I knew nothing about investing and have not made additional contributions to it. It is valid at 30K with 8K in long term gains. It is actively managed fund with a 0.34% expense ratio. In deciding between selling to reinvest in an index fund, making an additional 20K contribution to get to Admiral Shares class, and leaving as is, I am leaning towards selling prior to the declaration of distributions on 12/22.

Why is the advice sometimes to sell in a bear market to avoid paying as much in LTG taxes as opposed to selling in a bull market where even if I have to pay taxes on gains, I am still making more money to reinvest? It seems more logical to sell when it high even if you have to pay taxes. What am I confused about?

[jfoxcpacfp]

alloykat wrote:

Why is the advice sometimes to sell in a bear market to avoid paying as much in LTG taxes as opposed to selling in a bull market where even if I have to pay taxes on gains, I am still making more money to reinvest? It seems more logical to sell when it high even if you have to pay taxes. What am I confused about?

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That's never my advice. You always want to put profits before taxes.

1. Don't try to time the market


2. Invest in an appropriately-diversified equity fund portfolio


3. Rebalance annually

There is no way to give appropriate advice otherwise w/o knowing your comprehensive portfolio, however a 36% return after 10 years (assumed with dividends reinvested) is not acceptable in my book for a portfolio. Hopefully you have a more well-balanced portfolio.

 

[jz]

I agree with Johanna:   profits >>>>>taxes.  Never sell stocks during a stock market downdraft.

I also agree that this actively managed growth fund has underperformed the SPY index over 10 years.  Your cap gains tax bracket may fall under the Trump admin.; consider deferring any sale until tax reform.