|
|
Post by steadyeddy on May 8, 2022 13:09:52 GMT
I am seeking advice/opinions on which CEFs to sell for Tax Loss Harvesting.
1. My holdings of PDI/PTY/PDO have 8% to 10% paper loss (not counting distros I got monthly for about 6 months).
Which of these would you sell? Would you buy more of the other(s)?
Thanks.
|
|
|
|
Post by yogibearbull on May 8, 2022 13:36:44 GMT
Use sequencing for tax-swaps. IMO, the older/merged PDI and the newer term-structure CEFs PDO, PAXS are similar with the same managers. If you don't want to use the newest PAXS, do the tax-swap in 2 steps. 1st, say, from PDI into PDO, and then 30+ days later, from PDO back into PDI, and repeat as needed  . This may not work for high premium PTY that may move in its own way. So, no comment on that. |
|
|
|
Post by steelpony10 on May 8, 2022 13:44:19 GMT
steadyeddy , So a whole 6 months and a forever unknown market bites you? What was the reason you invested in a CEF? Is that still valid? It better not be because other anonymous posters are doing it. Lol. More sure income in all markets is a good reason and PIMCO is a top manager in this area. We invested for the distributions. After awhile you’ll get all your money back and it’s all free money after that. So if you don’t need the current distributions DCA them into the worst losers at the present time, equities, or even put those three on reinvestment catching monthly shares compounding at 8% rates instead of waiting on equities.Maybe try some patience and do nothing. There’s always much greater long term money to be made in all markets.
|
|
|
|
Post by yogibearbull on May 8, 2022 13:55:17 GMT
Beauty of tax-swap is that one maintains position and the tax benefit is just free lunch. Like Chicago "philosopher" Rahm Emanuel said, why let a crisis go to waste?
|
|
Deleted
Deleted Member
Posts: 0
|
Post by Deleted on May 8, 2022 13:58:27 GMT
YBB's TLH technique looks good, but if not a lot of money is tied up in these CEFs, I would hold and wait until year's end to see if they recover once the market bottoms or settles down. Their X-date is Wed., 5-11, and this week may be volatile.
|
|
|
|
Post by steadyeddy on May 8, 2022 14:56:50 GMT
@haven, yogibearbull, steelpony10, thanks for your thoughtful responses. I do not want to lose the distribution stream from these CEFs given PIMCO is perhaps the best manager out there. I need to think a bit more. |
|
|
|
Post by Chahta on May 8, 2022 16:31:03 GMT
steelpony10, steadyeddy, I get the point. But I call it “making lemonade”. Sure the CEF purchase should be a long term purchase if for income. So why not take advantage of the loss? This is a once in a while opportunity in this crappy market. There is generally very little we can do to avoid taxes and this is a gift IMHO.
|
|
|
|
Post by yogibearbull on May 8, 2022 17:01:29 GMT
|
|
|
|
Post by Fearchar on May 8, 2022 21:12:13 GMT
steadyeddy , could you clarify some? Do you have gains that you wish to offset? Otherwise, I believe you can only claim $3K in losses. and, you'll have that much more in gains in the future to report (assuming they recover). 
|
|
|
|
Post by steadyeddy on May 8, 2022 21:19:58 GMT
yogibearbull, if I understand your suggestion, you are saying I can sell one of PDI/PDO pair and buy the other one before 5/11 so my income stream remains essentially intact. Then, after 30+ days reacquire the position I would sell now. Right? I think I will sell PDO which has higher tax loss $ and plough those dollars into PDI & PTY equally (which have smaller tax loss $). In the long run, is there a reason to hold all the 3 CEFs? Thanks
|
|
|
|
Post by steadyeddy on May 8, 2022 21:21:35 GMT
steadyeddy , could you clarify some? Do you have gains that you wish to offset? Otherwise, I believe you can only claim $3K in losses. and, you'll have that much more in gains in the future to report (assuming they recover). , No.. I am only talking about whether to harvest losses or not among these 3 CEFs. Understand the $3K per year thing but the Tax Loss bucket will carry over for years and years.. |
|
|
|
Post by steadyeddy on May 8, 2022 21:22:25 GMT
steelpony10 , steadyeddy , I get the point. But I call it “making lemonade”. Sure the CEF purchase should be a long term purchase if for income. So why not take advantage of the loss? This is a once in a while opportunity in this crappy market. There is generally very little we can do to avoid taxes and this is a gift IMHO. , yes TLH is a gift for the long term (as long as it takes to claim losses against gains over the years). |
|
|
|
Post by steadyeddy on May 9, 2022 12:22:22 GMT
Here are 3 charts comparing price to NAV of PDI, PTY and PDO for Year-To-Date 2022 PDI vs XPDIX price -8.7% vs NAV -10% PTY vs XPTYX price -12.5% vs NAV -11.3% PDO vs XPDOX price - 19.7% vs NAV -10.8% We all know that PDI and PTY have been around longer and are somewhat the darlings (based on Fido community posts), but PDO also has decent following though newer. Given this data, which one should I be buying more? should I go with the popular ones? |
|
|
|
Post by Fearchar on May 9, 2022 12:49:58 GMT
steadyeddy, How much do you own of each? I'm currently at 3.86% in PDO 1.28% in PDI 4.03% in PIMIX Considering selling the PIMIX and putting the proceeds into PDO, but no rush.
|
|
|
|
Post by Chahta on May 9, 2022 13:27:23 GMT
steelpony10 , steadyeddy , I get the point. But I call it “making lemonade”. Sure the CEF purchase should be a long term purchase if for income. So why not take advantage of the loss? This is a once in a while opportunity in this crappy market. There is generally very little we can do to avoid taxes and this is a gift IMHO. , yes TLH is a gift for the long term (as long as it takes to claim losses against gains over the years). This year I will use $3000 to offset partially my Roth conversion and cover gains in equity funds. |
|
|
|
Post by steadyeddy on May 9, 2022 13:29:14 GMT
steadyeddy , How much do you own of each? I'm currently at 3.86% in PDO 1.28% in PDI 4.03% in PIMIX Considering selling the PIMIX and putting the proceeds into PDO, but no rush. , as % of portfolio value: PDI 0.4%; PTY 0.4%; PDO 0.7% - overall taxable CEFs are 6% of PV. |
|
|
|
Post by Fearchar on May 9, 2022 14:16:47 GMT
steadyeddy , You own a lot less than I. Those are essentially inconsequential amounts (1.5%) for the PIMCO CEFs. If I recall correctly, there are posters claiming much (probably too much) more. I think we are both at good levels.
|
|
|
|
Post by steadyeddy on May 9, 2022 17:02:46 GMT
steadyeddy , You own a lot less than I. Those are essentially inconsequential amounts (1.5%) for the PIMCO CEFs. If I recall correctly, there are posters claiming much (probably too much) more. I think we are both at good levels. , agree. The topic though is about harvesting tax losses. |
|
|
|
Post by FD1000 on May 9, 2022 22:34:59 GMT
Steady, this is exactly what I did in 2008. The only year I ever lost money (25%). I had losses in 2 funds. I replaced them with others which had better performance and carry over the losses for years.
Again, smart investors make the right choices which have nothing to do with higher distributions. Distributions don't compansate for performance or volatility.
BTW, YTD high distr stocks are doing great and much better than CEFs. No problem, it is one of my favorite categories. See HDV
|
|
|
|
Post by steadyeddy on May 10, 2022 0:00:40 GMT
steadyeddy , How much do you own of each? I'm currently at 3.86% in PDO 1.28% in PDI 4.03% in PIMIX Considering selling the PIMIX and putting the proceeds into PDO, but no rush. , so you prefer PDO over PDI? IS it because of wider margin between NAV and Price declines? |
|
|
|
Post by Fearchar on May 10, 2022 23:12:29 GMT
steadyeddy , How much do you own of each? I'm currently at 3.86% in PDO 1.28% in PDI 4.03% in PIMIX Considering selling the PIMIX and putting the proceeds into PDO, but no rush. , so you prefer PDO over PDI? IS it because of wider margin between NAV and Price declines? Yes; Greater discount to NAV with nearly equal NII rates. |
|
.
