Too many funds?

Investing
#1

@Jeremy This one’s for you! Over the last two years my excitement learning from you has led me to invest so much of my savings. Thank you.

But until this week, I had thought diversifying meant holding many different index funds and ETFs. I now realize I don’t need so many and I’m not sure how to go about fixing this. I assume I should sell a couple (the ETFs) and buy those I want to keep (the index funds) but very nervous what this means tax wise. Any suggestions?

I currently have: VOO/SPY, VXUS, VTIAX, VTSAX.

#2

Are the ETFs in a taxable account? If so i wouldn’t sell them and create a taxable event until it’s worth it to tax loss/gain harvest.

If the ETFs are in a Roth or traditional IRA and you just want to simplify then go for it.

#3

They are all in my taxable brokerage account. Thanks, now I need to go learn about how to determine “when its worth a tax loss/gain harvest”.

#4

Tax-Loss Harvesting Definition.

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#5

Hi @madison333 - I agree with what @Chadmethner said. It’s not necessarily a bad thing that you own duplicates in your account - there is just no real benefit from owning multiple of very similar index mutual funds / ETFs. Assuming that the funds are higher now than when you originally purchased them, you will owe capital gains tax if you sell them. So, it’s probably not worth selling them and paying the tax. If any of the funds were below the price you purchased them (you have an unrealized loss), then you could sell and consolidate.

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