Who is buying s&p now??

[WorkforFIRE]

If you buy $10000 worth of a fund on Dec 1, 2 weeks latter you get a $500 dividend. Now you have $9500 in the fund. $500 in cash and taxes on the $500 owed to the government for this year. If you wait until Dec 16, and you buy the same fund. You have $10000 in the fund and no taxes due for now.

Interesting. So is it expected for the fund to go down from 10000 to 9500 in those 2 weeks as we lead up to the dividend payment? Essentially it sounds like it goes down by the dividend percent payout.
Or is this unique to this year and how the market is behaving?

[bovie]

Interesting. So is it expected for the fund to go down from 10000 to 9500 in those 2 weeks as we lead up to the dividend payment? Essentially it sounds like it goes down by the dividend percent payout.
Or is this unique to this year and how the market is behaving?

The fund NAV decreases at the time the dividend is paid. Not unique to this year.

Smooth all of this out over the several decades you plan to hold the fund and it’s pretty much irrelevant.

[Random1]

Interesting. So is it expected for the fund to go down from 10000 to 9500 in those 2 weeks as we lead up to the dividend payment? Essentially it sounds like it goes down by the dividend percent payout.
Or is this unique to this year and how the market is behaving?

This is how it always works. $10000 is $10000, you are just getting some of your own money back and are forced to pay taxes on it, when maybe you do not want to pay taxes. Like above, over the long term it really doesn't matter. But if you can control your timing a little you can avoid some taxes. I think there a misconception that you are actually getting some thing, like" I just bought this fund two weeks ago and wow, I just made $500". This has to do with the inherent inefficiencies of certain funds and declaring dividends and capital gains prior to year end to zero out the books. A fund can't hold a profit from year to year, it needs to distribute these gains to the shareholders. Ususally this is done on a quarterly basis, but there tends to be a larger settling of the accounts prior to year end. This is why if this is a taxable account , you may be better with the ETF version of the same fund, because they have a better mechanism of not distributing all of the gains.

[bovie]

This is why if this is a taxable account , you may be better with the ETF version of the same fund, because they have a better mechanism of not distributing all of the gains.

*Unless using a Vanguard fund with an associated ETF "share class"

[Tangler]

Bought more today! VTI, VXUS, + vanguard tax-managed capital appreciation index fund + vanguard tax-managed small cap index fund.

Buying the whole market! 2022 has been a great year to buy!

Keep buying my friends. Stay the course!

[Tangler]

I can only pray that you are correct. I bought more VOO this week.

Long term play: 20 years from now it will likely be higher!

[WorkforFIRE]

buy buy buy. Next week starting 2023 with big buys including Backdoor roth for me and my wife

[Tangler]

buy buy buy. Next week starting 2023 with big buys including Backdoor roth for me and my wife

Roger that!

BDR, fund solo 401k (tempted to fund for full year!), I-bonds? (think I will add some more to these too, but hard to resist buying stocks while they are down 18-20% from last Jan.

I know you cannot perfectly time the market, but when you are down -20 it sure seems like a reasonable time to buy, esp. If buying for when you are 70-75.

Will be interesting to see what happens in 2023 and for the next 20 years.

[WorkforFIRE]

Roger that!

BDR, fund solo 401k (tempted to fund for full year!), I-bonds? (think I will add some more to these too, but hard to resist buying stocks while they are down 18-20% from last Jan.

I know you cannot perfectly time the market, but when you are down -20 it sure seems like a reasonable time to buy, esp. If buying for when you are 70-75.

Will be interesting to see what happens in 2023 and for the next 20 years.

I think I’m going to hold off on I-bonds. I rather out it in the market with it being down 20%

Can you fully fund solo 401k without earned income yet? Didn’t know you could do that

[childay]

I think I’m going to hold off on I-bonds. I rather out it in the market with it being down 20%

Can you fully fund solo 401k without earned income yet? Didn’t know you could do that

You are correct

[MMJB LLC]

The current hopium on this thread may serve as a good contra. Will see what 2023 brings.

[Tangler]

I think I’m going to hold off on I-bonds. I rather out it in the market with it being down 20%

Can you fully fund solo 401k without earned income yet? Didn’t know you could do that

I have a small business, I pay myself from the business. I will need to check with my accountant but i think I can fund employee contributions to solo 401k in Jan, but……I am no CPA.

Feel like a good time to invest? Yes! Down 18-20% from last year.

[Tangler]

Bought some last week & some this week. I did back door Roth for Wife and I and contributed first months worth to our solo 401k for 2023.

I am an OLD fart now (turn 50 this year) so the max for my solo 401k is now 30k for employee contributions + more for the employer contribution (profit sharing)......wow! $2,500 per month for next 12 months.......wow.

Anyway, my message for you younger critters: Just keep buying. I will try to keep this thread going. Even at 49, I have a long time before I will be taking RMDs.

Plenty of time to compound. Keep buying folks.

[Tangler]

I think I’m going to hold off on I-bonds. I rather out it in the market with it being down 20%

Can you fully fund solo 401k without earned income yet? Didn’t know you could do that

Update: my CPA confirmed you CANNOT fully fund solo 401k without earned income.

As is often the case, I was wrong.

You MUST have earned income to fund solo 401k (income withheld). My error. Sorry for the confusion.

Never the less: Keep buying!

[bovie]

Bought some last week & some this week. I did back door Roth for Wife and I and contributed first months worth to our solo 401k for 2023.

I am an OLD fart now (turn 50 this year) so the max for my solo 401k is now 30k for employee contributions + more for the employer contribution (profit sharing)......wow! $2,500 per month for next 12 months.......wow.

Anyway, my message for you younger critters: Just keep buying. I will try to keep this thread going. Even at 49, I have a long time before I will be taking RMDs.

Plenty of time to compound. Keep buying folks.

I don't think you'll have a problem keeping this thread going...how else would we know that you keep buying without the weekly update?

Congratulations on your recently expanded "old fart" tax-protected space!