RetireJapan

Hey folks,

So up until now I've mostly been just buying additional units in the Mutual Funds (predominantly Emaxis) within Monex.

Recently though I'm feeling a bit overexposed to certain asset classes / geographies and I'm looking to switch out of some products and move into others (and maybe do a bit of profit taking at the same time).

My question is, is it possible to sell certain mutual funds and use it to buy other mutual funds without triggering a sale (which would generate income / exposes us to tax). I know this can be done within an iDeCo since this is moving funds within the wrapper (and because you can't take funds out anyway).

In this case I'm referring either to NISA wraped products, or non-NISA (tokutei) products in my normal brokerage account.

I assume the answer is NO, I can't 'switch' between products. The only available method would be to perform a 'sell' of Product A, followed by a 'buy' of Product B.

Any advice welcome.

Thanks
-JM

Correct. Outside of iDeCo, you are limited to buying and selling. My general strategy is just to stop buying the thing I want less of (not sell it) and buy the thing I want more of going forward. Not as clean as a straight sell/buy, but no tax consequences.

RetireJapan wrote: ↑Mon Mar 15, 2021 5:03 am My general strategy is just to stop buying the thing I want less of (not sell it) and buy the thing I want more of going forward.

This is what I do too - if it's in a NISA. I usually sell it off in the December before it drops out of the NISA.

If it's not in a NISA, I just sell it and pay the capital gains tax. Like to keep my portfolio clean.

I use SBI, not Monex, but don't think that makes a difference in this case.

I was going to also point out that before you start tinkering too much, remember the Fidelity study that discovered that their best performing customers were the dead ones (AKA they just left their account alone). But it turns out that such a study doesn't seem to have been published (but is still a useful myth): https://saverocity.com/independentlyfin ... not-wrong/

I'd try to avoid selling and realising any capital gains. When you pay tax, you not only lose that money but also any future gains you might have had. $100 you pay to the taxman today could be potentially worth $400 in 20 years' time if left to compound (assuming an average 7% growth rate).

fools_gold wrote: ↑Tue Mar 16, 2021 3:14 pm I'd try to avoid selling and realising any capital gains. When you pay tax, you not only lose that money but also any future gains you might have had. $100 you pay to the taxman today could be potentially worth $400 in 20 years' time if left to compound (assuming an average 7% growth rate).

Yep, you need to consider this cost against the benefit of correcting your over-exposures. Pricing the latter might be difficult, however.