Fun with Tax Loss Harvesting When the Stock Market Goes South

What’s a girl to do when her short term and long term “gains” are actually bright red losses?

Sell! Sell! Sell!

Now, before you berate me for selling when the market is down, let me explain, I am not selling to get out of the market.

My Vanguard shares were down significantly enough that I wanted to take action. Investing in index funds, I don’t have a strong opinion on one or the other. I had a dividend appreciation fund and a small-cap fund that today were mutually down about $500. That’s a $500 loss I can take against any gains made this year. I could wait for it to go down even more (it probably will) or, I could just pull out the money now and plop it straight into another “different” investment to reap the potential gains (or further losses) of being in the stock market this year.

I pulled out a good $23k from these two investments, and moved them into my Vanguard Healthcare fund which I’m slowly but surely plugging away at the $50k minimum for the Admiral version (I love me a good low-fee admiral fund.) So now my healthcare fund is at about $34k and I’ll have $500 in losses to write off come tax time next year. Not so shabby.

Note I’m not a tax professional and I don’t actually know what I’m doing, so get some real advice before you take any of mine. 🙂

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