Sticky: Tax-Managed/Exempt/Deferred Investments

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Submitted by flu on November 13, 2012 - 7:21am

I'm creating this section to collect information on different investments that have favorable tax treatments

Submitted by flu on November 13, 2012 - 7:28am.

Anyone own this particular fund?

Vanguard California Intermediate-Term Tax-Exempt Fund Investor Shares (VCAIX)

https://personal.vanguard.com/us/funds/s...

Holdings:

https://personal.vanguard.com/us/FundsAl...

Average annual return is about 5.29%..Most investments are intermediate term 5 year... And income is tax exempt from federal and state (assuming you're CA residence)...

Thoughts?

Submitted by flu on November 13, 2012 - 7:32am.

There's also a longer term fund with a return of 6.4% averaged since 1996...

(VCITX)

https://personal.vanguard.com/us/funds/v...

https://personal.vanguard.com/us/funds/s...

Reality, it's really not performing at 6.4% recently..Closer to 5%...

Thinking about switching my investment options for post-tax accounts next year...Putting all the conservative, tax friendly slow growth crap in post tax accounts, and all the frequent trading/churn investments in Roth /IRA rollover....

Submitted by no_such_reality on November 13, 2012 - 9:51am.

5.29% post tax is starting to look pretty good. It'll look better if Obama succeeds in getting the Republicans to roll back investment income tax rates to be treated like regular income.

Submitted by flu on November 13, 2012 - 10:22am.

no_such_reality wrote:
5.29% post tax is starting to look pretty good. It'll look better if Obama succeeds in getting the Republicans to roll back investment income tax rates to be treated like regular income.

NSR, I think you mean 5.29% in a post tax account that is tax free.

Yes..Actually, if you notice on the two funds above that invest in intermediate muni bonds, the yield over the most recent years are above the average of 4-6%... Don't know how long that will last. I guess if one has concerns about a CA bankruptcy, then one would stay away...But with all the new tax initiatives, I don't think that will happen. They will just kick the can down the road.

Added bonus..figure that I'm more paying taxes in CA, I might as well be on the recipient side of the benefit too. 6% tax free is kinda like 8% taxed (for me at least) so it's a wash. And there's a change it might be better than 6%.. Doing these in post tax accounts will cut my tax bill significantly next year and doing aggressive trading and dividends in Roth/IRA/401k will have an added favorable tax treatment too.

Anyone else got anything else that are tax-exempt or tax friendly?

Submitted by flu on November 13, 2012 - 10:43am.

Admiral shares offer even reduced costs... Minimum investment is $50k though..

VCADX

https://personalp.vanguard.com/us/funds/...

Submitted by SK in CV on November 13, 2012 - 10:43am.

flu wrote:
There's also a longer term fund with a return of 6.4% averaged since 1996...

(VCITX)

https://personal.vanguard.com/us/funds/v...

https://personal.vanguard.com/us/funds/s...

Reality, it's really not performing at 6.4% recently..Closer to 5%...

Thinking about switching my investment options for post-tax accounts next year...Putting all the conservative, tax friendly slow growth crap in post tax accounts, and all the frequent trading/churn investments in Roth /IRA rollover....

Obviously there's some great risk here too. After a 30 year bull market, it would seem there isn't a whole lot of upside left in bonds. I know more than one very smart trader that have been tens of millions short on treasuries for a couple years now. Eventually they'll be right.

Submitted by no_such_reality on November 13, 2012 - 10:52am.

I don't see interest rates moving lower. The question is which of the bond funds will best handle flat or rising interest rates.

Submitted by flu on November 13, 2012 - 10:52am.

SK in CV wrote:
flu wrote:
There's also a longer term fund with a return of 6.4% averaged since 1996...

(VCITX)

https://personal.vanguard.com/us/funds/v...

https://personal.vanguard.com/us/funds/s...

Reality, it's really not performing at 6.4% recently..Closer to 5%...

Thinking about switching my investment options for post-tax accounts next year...Putting all the conservative, tax friendly slow growth crap in post tax accounts, and all the frequent trading/churn investments in Roth /IRA rollover....

Obviously there's some great risk here too. After a 30 year bull market, it would seem there isn't a whole lot of upside left in bonds. I know more than one very smart trader that have been tens of millions short on treasuries for a couple years now. Eventually they'll be right.

I know, a lot of people think bonds are gonna crater... I don't need to keep this in here that long. Maybe hopefully just 4 years :)

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