Stock Market Thread

[WRXtranceformed]

And someone smarter on money stuff than I am should explain to me why paying taxes every time Betterment and Wealthfront rebalance still keeps me ahead because it sure feels like Im getting fucked on that one every year.

Yeah man that is why I prefer to speak with a human smarter than me on this topic when I do rebalance, because it may not actually make sense to give up some positions.  I don't do it that frequently (maybe once every few years unless there's dramatic shifts like recently).  You can hedge some of your tax liability by taking forced losses of underperforming funds and moving that money elsewhere, which definitely does help in the long run.  But if you're rebalancing frequently you're just constantly paying taxes on those gains and that sucks.

I also like the control over knowing when funds or individual stocks are sold because there are other ways to negate your tax liability.  I set up a 529 for my son late last year because in SC you can deduct 100% of your contributions with no limits.  So I'm taking these chunks of gains and buying down my tax liability with them while keeping them in an investment vehicle that I wanted to build anyway.  Double whammy bonus  The only real downside aside from the obvious restrictions of that money being in a 529 is that you lose 5% of that up front on initial investment. But you definitely make out ahead in the long run from the tax benefits and growth in that fund, and SC's 529 is a killer program as far as they go.