4 ms·

If you liquidate your portfolio you're going to have to recognize (pay tax on) capital gains.

• tunesmith 4y ago
  Good point, but how about for retirement portfolios? I'm trying to point out the irrationality of it - after all, I don't think people desist from liquidating only for tax/fee reasons. "I would sell everything today and DCA back in over the next year if not for those pesky taxes and fees! (shakes fist at sky)"
  • andrewf 4y ago
    Having thought about it a bit more - I'm not sure what motivation I'd have to sell then immediately DCA back in, my position would end up in the same place! If at the beginning of 2022, I'd had a crystal ball saying "stocks will crash in March then rebound in December", then I have a motivation: I do want to switch to a stock-light position, hold that for a while, then move back. In that situation I'd be inclined to DCA on the way out in January, as well as DCA back in during December. I want to reduce variance more than I want to increase the expected value.
    • tunesmith 4y ago
      So that's why I think it's a good argument for lump-summing a windfall rather than DCA-ing a windfall.