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  • Sell now or wait?

    My wife and I are slowly moving to a 3 fund portfolio plus REIT.

    Before we became educated on this, we had recently moved to a Fidelity FP. They recommended we put all Roth $ into their Blue Chip Growth Fund (ER 0.79) and all 403b $ into their Balanced Fund (ER 0.41).

    We had $200k in Roth. Now Currently down 22%.
    We had $350k in 403b. Now Currently down 12%.

    We are both 50, and plan to retire in 10 yrs. When we retire we will not draw from the Roth, and if we draw from 403b it will be a very small amount (TBD) because we will have a guaranteed $130k per year pension.

    We would like to get to the 3 fund portfolio and REIT, but don’t know whether we should wait to do this - we essentially bought Fidelity Blue Chip Fund and Balanced Fund high and would be selling low. Is it better to wait for the market to be better and the large losses to get back to zero before selling?

    Thank you for any and all advice.



  • #2
    What is the purpose of locking in a loss in a Roth or 403b, I think I am missing something?

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    • #3
      The balanced fund is a 70/30 fund with a slightly higher ER for the tradeoff of someone else doing the work for you. The growth fund tilts towards large growth companies so that means higher potential gains for higher risk/volatility.

      With the growth fund, any further downward trend or recovery will likely get magnified. If you wait for either of these things to happen, it's just timing the market.

      In tax advantaged accounts, it doesn't matter when you switch allocations as there's no tax consequences. If you want to switch allocations, make sure it's the right one for you and just switch whenever.

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      • #4
        Fidelity Blanced Fund and Blue Chip Growth Fund - the 5 largest holdings are the same stocks, so make sure you want to overweight apple, msft, tesla, meta and alphabet

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        • #5
          Originally posted by Sstrath View Post
          My wife and I are slowly moving to a 3 fund portfolio plus REIT.

          Before we became educated on this, we had recently moved to a Fidelity FP. They recommended we put all Roth $ into their Blue Chip Growth Fund (ER 0.79) and all 403b $ into their Balanced Fund (ER 0.41).

          We had $200k in Roth. Now Currently down 22%.
          We had $350k in 403b. Now Currently down 12%.

          We are both 50, and plan to retire in 10 yrs. When we retire we will not draw from the Roth, and if we draw from 403b it will be a very small amount (TBD) because we will have a guaranteed $130k per year pension.

          We would like to get to the 3 fund portfolio and REIT, but don’t know whether we should wait to do this - we essentially bought Fidelity Blue Chip Fund and Balanced Fund high and would be selling low. Is it better to wait for the market to be better and the large losses to get back to zero before selling?

          Thank you for any and all advice.

          It looks like your situation has taken quite a turn for the worse over the last month. You’ve aged four years and lost over half your qualified funds. https://forum.whitecoatinvestor.com/...627#post330627

          The silver lining is that selling and rebalancing in your Roth and 403(b) shouldn’t be a taxable event.

          Comment


          • #6
            Originally posted by Hank View Post

            It looks like your situation has taken quite a turn for the worse over the last month. You’ve aged four years and lost over half your qualified funds. https://forum.whitecoatinvestor.com/...627#post330627

            The silver lining is that selling and rebalancing in your Roth and 403(b) shouldn’t be a taxable event.
            tf? lol

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            • #7
              That’s a perfect, and funny appreciated response. Danger in writing posts late at night. Fund totals above are for me only (not combined with significant other) - my mistake. Our Roth and 403b accounts are down by that percentage, but still coming in for a combined total of around $700k. But all the same significant losses. Truly am 50 ;-). Retirement likely in 10yrs.

              We recognize that there are no tax consequences to selling, but wonder if we should wait rather than sell low (although we would buy other index funds also low - those index funds have not seen such 20% losses). A wash considering it’s a long time before needed? We would be purchasing index funds (total market, international and bond with $ from sale).

              Appreciative of all advice, as well as funny ones too due to mis typing :-).

              Comment


              • #8
                Originally posted by Sstrath View Post
                Before we became educated on this, we had recently moved to a Fidelity FP. They recommended we put all Roth $ into their Blue Chip Growth Fund (ER 0.79) and all 403b $ into their Balanced Fund (ER 0.41).
                I'll bet they did.

                Originally posted by Sstrath View Post
                We would like to get to the 3 fund portfolio and REIT, but don’t know whether we should wait to do this - we essentially bought Fidelity Blue Chip Fund and Balanced Fund high and would be selling low. Is it better to wait for the market to be better and the large losses to get back to zero before selling?
                If you truly want to get to a four-fund portfolio and hold it for the long-term, and everything is in tax-protected accounts, then just do it.

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                • #9
                  No harm. Certainly not trying to “dox” you or provide more details than you offer. Most posters here are anonymous or semi-anonymous.

                  That said, the more accurate information you provide, the more accurate the free advice you get is likely to be. A non-fellowship trained pediatrician asking for career advice but claiming to be a surgical oncologist (or vice versa) is unlikely to get accurate advice.

                  In your case, you have a pretty good pension coming. I think you mentioned $130K per year. It wasn’t clear whether that was a combined amount for you and your spouse, or if it’s that much per year for each of you. Clearly that makes a big difference for how much you’ll need in retirement funds. You also didn’t mention how much you make, how much you spend per year now, and how much you plan to spend on ten or twelve years when you retire. A fully paid off house helps with retirement. But some places like New Jersey have $30K per year (each and every year) just for property taxes. Clearly that increases your baseline minimum expenditures in retirement, even with a paid off house, unless you sell and move to Florida or something.

                  What funds are available in the 403(b) and what are their expense ratios? I’ll presume that you have a Roth IRA with Fidelity, so everything from Fidelity should be available. You should be able to get one of Fidelity’s zero expense ratio index funds. No great reason to keep paying 79 basis points there.

                  Give up on trying to time the market. There's no need to wait for these two funds to get back to their previous valuations. You don't know beforehand whether your new investments will outperform or underperform your current investments prior to fees. You should, however, be able to get low or no fee index funds from Fidelity and capture market rate returns.
                  Last edited by Hank; 04-22-2022, 04:44 PM.

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                  • #10
                    Thanks for all responses! Very helpful.

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                    • #11
                      If that's the way you're headed, then just do it now.

                      I doubt your crystal ball works any better than mine.

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                      • #12
                        This might be dumb- but maybe this isn't the worst time to put bonds in the Roth. Specifically long duration. (*** not financial advice).

                        I think there are better ER funds to capture a similar outlook and volatility. That would really be the only objective of selling, IMO.

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