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So in terms of index funds, is it better to have just one "total stock fund" or separate SP500, mid-cap and small cap index funds? It seems the total stock funds are heavily weighted towards the SP 500, and may not be giving enough exposure to the small caps.
anybody know of an article describing the dollar value cost of the tax inefficiency of mutual funds vs index funds? i am trying to figure out what its costing me to be getting all these distributions today (if anything). if i was paying just the long term capital gains, id be less concerned. however, im also paying a significant amount of short term, so that's costing me money. however, my primary investing account is performing very well, so i need to wonder if that out-performance is worth the additional costs.
anybody know of an article describing the dollar value cost of the tax inefficiency of mutual funds vs index funds? i am trying to figure out what its costing me to be getting all these distributions today (if anything). if i was paying just the long term capital gains, id be less concerned. however, im also paying a significant amount of short term, so that's costing me money. however, my primary investing account is performing very well, so i need to wonder if that out-performance is worth the additional costs.
I have read and seen in publications, probably BogleHead authors or Jack himself. It varies with the active funds management. There is a number out there for funds. Good luck finding it, there are chapters on the tax inefficiency of active funds.
but remember what is tax efficient early on can be a tax torpedo later as decades of pent up gains can make changes in your portfolio both painful or slow.
have to sell in drips and drabs over time and a drop in the market can destroy not only all the efficiency but negate those low fees as well.
it really is a double edge sword like anything you kick down the road long enough.
but remember what is tax efficient early on can be a tax torpedo later as decades of pent up gains can make changes in your portfolio both painful or slow.
have to sell in drips and drabs over time and a drop in the market can destroy not only all the efficiency but negate those low fees as well.
it really is a double edge sword like anything you kick down the road long enough.
It really gets into interestif discussions. Id like to see a model that sold VOO and bought spy every 13 months and went back and forth over time paying ltcg as you go
it would be so hard to do as each persons marginal tax rate would be a factor.
but this is something that few think about along the way. the piper gets paid at some point and then you may cringe.
it is no different than all my life i wanted that tax deduction on my 401k .
well now that i am retiring i wish i did all roths. now that the pay checks are stopping tax free social security and roth income would have been amazing .
instead i have rmd's eventually up the kazoo and 85% of my ss will be taxed forever.
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