4 ms·

Why can't I buy VTI and dividend reinvest? I compared that to Betterment since 2004 and it wins handily. What am I missing? Tax loss harvesting sounds fancy

Why can't I buy VTI and dividend reinvest? I compared that to Betterment since 2004 and it wins handily. What am I missing? Tax loss harvesting sounds fancy but what's the actual bottom line benefit after fees?

zazpowered 10y ago
VTI is less diversified, you basically only have US stocks. I probably wouldn't mind being only invested VTI but some people want more diversification.
- matwood 10y ago
  Yeah, I would consider VTI to be one of my portfolio pillars along with international, bonds, and REITs.
Veratyr 10y ago
Betterment maintains a more diversified portfolio and optimizes it for a few things like downside risk, explained here: https://www.betterment.com/resources/investment-strategy/portfolio-management/portfolio-optimization/ https://www.betterment.com/resources/investment-strategy/por...
sulam 10y ago
I don't use a robo-advisor, but TLH saves me 6 figures in taxes every year. Sadly I'm not comfortable disclosing the size of my portfolio. It's big enough to have an account with most bankers, but not big enough to require dedicated staff. :)
- matwood 10y ago
  > but TLH saves me 6 figures in taxes every year. This is a bit misleading since the only way to save 6 figures on capital gains every year from TLH is to have realized > 6 figure loss at some point in the past. The offset on regular income is also maxed at 3k/year. The losses/gains must also be in a taxable account. https://www.bogleheads.org/wiki/Tax_loss_harvesting#Using_a_loss_from_one_tax_lot_to_offset_the_capital_gains_from_another https://www.bogleheads.org/wiki/Tax_loss_harvesting#Using_a_... TLH can be useful in certain situations (like yours), but I think generally it is oversold by the likes of Wealthfront and Betterment.
- narrator 10y ago
  So you have big capital gains somewhere else in your portfolio that lets you take big deductions from TLH?
  - sulam 10y ago
    Yes, absolutely. I also have an AMT overhang, but I doubt that will be used up in my lifetime.
deleted 10y ago
[deleted]

zazpowered 10y ago

VTI is less diversified, you basically only have US stocks. I probably wouldn't mind being only invested VTI but some people want more diversification.

matwood 10y ago
Yeah, I would consider VTI to be one of my portfolio pillars along with international, bonds, and REITs.

Veratyr 10y ago

Betterment maintains a more diversified portfolio and optimizes it for a few things like downside risk, explained here: https://www.betterment.com/resources/investment-strategy/portfolio-management/portfolio-optimization/ https://www.betterment.com/resources/investment-strategy/por...

sulam 10y ago

I don't use a robo-advisor, but TLH saves me 6 figures in taxes every year. Sadly I'm not comfortable disclosing the size of my portfolio. It's big enough to have an account with most bankers, but not big enough to require dedicated staff. :)

matwood 10y ago
> but TLH saves me 6 figures in taxes every year. This is a bit misleading since the only way to save 6 figures on capital gains every year from TLH is to have realized > 6 figure loss at some point in the past. The offset on regular income is also maxed at 3k/year. The losses/gains must also be in a taxable account. https://www.bogleheads.org/wiki/Tax_loss_harvesting#Using_a_loss_from_one_tax_lot_to_offset_the_capital_gains_from_another https://www.bogleheads.org/wiki/Tax_loss_harvesting#Using_a_... TLH can be useful in certain situations (like yours), but I think generally it is oversold by the likes of Wealthfront and Betterment.
narrator 10y ago
So you have big capital gains somewhere else in your portfolio that lets you take big deductions from TLH?
- sulam 10y ago
  Yes, absolutely. I also have an AMT overhang, but I doubt that will be used up in my lifetime.

deleted 10y ago

[deleted]