Reallocating assets in funds within a Roth IRA while market is down

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manouche
Posts: 3
Joined: Wed Dec 29, 2010 1:15 am

Reallocating assets in funds within a Roth IRA while market is down

Post by manouche »

I have a Vanguard Roth IRA that is made up of four Vanguard mutual funds. Since I retired, have been meaning to move some assets to rebalance the assets, but I have not yet done that. I don’t depend on the IRA for my retirement, but still would like to make smart decisions about managing it, as it is substantial.

I know that I can move assets between funds without any tax consequences. My main question is the timing of the move. When managing taxable funds, I would sell high and buy low. With the market down in most sectors now, I am wondering what move to make.

My main strategy is to lessen the stock assets and move to a more conservative fund (treasuries, bonds, etc). It would be easy to just go online and move a percentage of assets between funds. Since prices on most everything that I have are down, is this not a good time to be rebalancing assets ? There is no opportunity to take losses to use against gains, so the losses are just “built in”. Assets in a fund with higher price/share could buy more shares at a low price of another fund.

Excuse the long explanation. I realized that I was developing my thoughts in this as I wrote.

I would love to hear any input on this subject
delamer
Posts: 17453
Joined: Tue Feb 08, 2011 5:13 pm

Re: Reallocating assets in funds within a Roth IRA while market is down

Post by delamer »

Today is the best day to move your assets in order to achieve your desired asset allocation.

This is true since you have no way of knowing what the stock or bond markets will do tomorrow.

Asset allocation is a decision about your portfolio in the long-term; don’t let short-term market conditions affect that.
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
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