I have too much of my net worth in AAPL. I’m looking to diversify to reduce my risk but want to reduce my tax burden. I’ve been told by an advisor about exchange funds (not ETFs). Have you invested in exchange funds? What has your experience been and how have your returns been? #personalfinance #investments
Same, I have too much of my networth in TSLA. Let me know if you find a good fund.
I have not but have looked closely at it. You can get the historical returns in an information pamphlet from that advisor, and for the ones I looked at they reasonably tracked the indices they are trying to hit, which is a good sign The main drawbacks I see are: 1) high fees (0.8%/yr or more) 2) no assurances about what the fund will return to you when you exit. In fact, they explicitly say (when asked) they they will distribute whatever the fund manager wants to get rid of, for them to continue tracking their index Also keep in mind that it won't help if you (like I) want to change asset allocation in a meaningful way. eg I want to increase bond holdings, but this won't accomplish that (other than the 20% of real-estate it holds, while you are in the fund) All in all, it isn't necessarily a bad idea and I'm still considering it myself for a portion of my appreciated stock, but that had me less excited. I'll probably still go into one for a minority of my shares, gift a bunch to a DAF or foundation (which helps me increase my bond allocation), perhaps do some upstream estate planning to gift or "sell" to elderly parents, and also hold a bit more than I naturally would
Thanks. I’ve never understood how donating to charity can reduce taxes on the money you have not donated.
It's only slightly less "costly" than selling outright, at least in CA at the highest tax bracket. Marginal income tax is about 51%. Cap gains is 37.1%. So it "costs" 12% in order to get 100% available for current or future charitable giving
“i have too much money in the safest and highest return on capital company in the world. how can i reduce my risk by buying riskier companies?”
"I understand idiosyncratic risk. How can I diversify to offset that?"