9

I'm not going to be a day trader and I don't have enough time to be an active trader in the sense that I will not be making several trades a month. Instead I'm more of a buy and hold investor. I find myself logging into Vanguard looking at my ETF/Mutual funds in my brokerage account each day and watching the grass grow, so to speak.

Is there anything I can be doing right now while letting my investment grow to help it improve? I'm waiting for the 18 months (Still about a year away) to trade so that I don't get hit with the higher tax bracket, but I guess I'm a little impatient and am just a little tired of not having any control.

Thanks for your input.

  • How much have you invested? Do you have an IRA? 401K? – mhoran_psprep Jun 20 '12 at 1:47
  • Invested 6k in ETFs and 6k in Mutual funds. I have a 401k in which I am currently investing 21%. – Eric Jun 20 '12 at 12:57
12

Stop watching.

When I first got a job where I could log in to a website and view accounts, I did so pretty heavily for a few months. Typically there isn't any harm, but there are downsides; you might be more tempted to trade or act on a rumor. You simply have more opportunity to act on a whim if you are logged in to your account.

So stop watching. I have will power issues, so I can't have too much junk food in the house, and I learned to quit logging into my brokerage account. (I still stare at quicken every couple nights.)

Just setup up systems to automatically deposit money and make purchases. Once a year on your birthday, log in and do whatever maintenance you need to do like overbalancing and such.

If you really are a buy and hold type investor (I am, for all the reasons you cited) then be a buy and hold and stop watching one.

8

By definition, ETFs are passive investments, so you do not really need to monitor it day-to-day. Basically, if your investment timeframe is long ie. 5-10 years, then you should not be wasting time monitoring small changes in prices.

2

You describe yourself as buy and hold. So it is time to act like it. The decision to sell an investment is not based only on the taxes involved. Taxes are only part of the equation.

That being said...

Look at the options you have available in your IRA and 401K. Selling all or part of a position doesn't trigger taxes. Make this part of the investment portfolio the part that is most active.

The parts that will trigger tax considerations should be the one that changes the least.

But still periodically look at your investments as whole and rebalance your investments and how your new money is flowing into those investments.

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