VTMFX
VANGUARD TAX-MANAGED BALANCED FUND ADMIRAL SHARES
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I have Vanguard and Fidelity. They each have strengths and weaknesses. I much prefer ETFs over Mutual Funds when an ETF is available because of the mid day purchase and limit orders. Vanguard has some amazing mutual funds you can’t get anywhere else. VTMFX, VMSXX. Fidelity has some interesting mutual funds, FNLIX. I really like the dollar based buying on Fidelity. Vanguard doesn’t support this. Vanguard performance reporting and tax forms are better. Fidelity has better bond trading, I think. Vanguard is better for earning on sweep and cash accounts. But access to money is worse. Can only push to a cash management account on vanguard, and the ACH from Vanguard has some weird security limits. Fidelity is more open allowing push and pull from any account. Fidelity allows you to have an HSA. Vanguard’s 529 has some excellent mutual funds. Due to the discipline forced by Vanguard, I have found I made more money at Vanguard than at Fidelity, though I prefer the flexibility and tools of Fidelity. I find Fidelity customer service to be better, until you need the trading desk, then vanguard is better.
In taxable accounts there are concerns with capital gains passed on from index funds, dividends passed on from index funds, and capital gains from selling index funds. Index funds can be mutual funds or ETF’s. ETF’s are generally considered more tax efficient, but a stock index mutual fund can be just as tax efficient as an ETF. To be most tax efficient in a taxable account, I recommend low turnover, low cost, and low yield index funds \[an example is Fidelity’s FZROX total stock market that has only a 1% turnover ratio\]. With bond index funds, I would recommend a municipal/state specific fund to reduce your tax burden. Vanguard has a 50/50 tax-managed balance index fund that I invest in. It’s specifically put together to be tax efficient. You can do it yourself, especially if your state of residence has a bond fund available, buy pairing a tax efficient index fund with your state specific bond fund. The Vanguard 50/50 ticker is VTMFX.
If you want to preserve the investment and generate dividend income, consider investing in Vanguard’s Tax Managed Balance Fund. The ticker symbol is VTMFX. I would also make sure you are maxing out a Roth IRA annually in a good balanced fund like VBAIX, so you have money growing tax free. Good luck.
VTMFX is good for reducing taxes inside taxable taxable acct
60% US stock / 35% intermediate tax-exempt bonds / 5% cash. Ticker example would be 60% VTI / 35% VTEI / 5% VUSXX. If you want to be a little more conservative, you can go 40-50% stock and up the bond fund. If you want a one-stop-shop for 50% stock / 50% tax-advantaged bonds, VTMFX.
Vanguard Tax Managed Balanced Fund (VTMFX). Safe place to park your money until you figure out what you want to do with the rest of your life. [https://investor.vanguard.com/investment-products/mutual-funds/profile/vtmfx](https://investor.vanguard.com/investment-products/mutual-funds/profile/vtmfx)
This is what I do. ETFS may be more tax efficient than individual stocks and mutual funds though. You may want to look into it. Taxable Brokerage is a viable option for use between early retirement and that age 59 1/2 mark that tax deferred kicks in, apart from the exceptions that exist. Vanguard's VTMFX has served me well in my brokerage acct as far as being tax-efficient for the last 6 years. Bought and held even through COVID
What about VTMFX (Vanguard Tax-Managed Balanced Fund Admiral Shares)? It’s riskier than a HYSA but better returns - worth a look.
Generally speaking, any security that has low turnover, low(ish) dividend yield, pays qualified dividends, etc is tax efficient enough. Here's an article on tax efficient investing: https://www.bogleheads.org/wiki/Tax-efficient_fund_placement I've considered VTMFX (essentially 50% VTI + 50% VTEB municipal bonds) in a single fund but I decided to just stick with my overall asset allocation of 80/20 stocks/cash equivalents across almost all accounts I have. Makes things simpler for me.
5-10 years out I’d stick it in a balanced fund, but that might be more aggressive than you prefer If you’re at vanguard I like VTMFX
Ignore Reddit financial advice. Build a buffer in a taxable brokerage account so that you never run into a situation where you need to take a loan. Nobody ever regretted having liquidity. If you’re at Vanguard VTMFX is a great fund for this.
Would probably get a fund like VTMFX that holds munis for ease of use, rather than buying munis directly (which I have no idea how to do).
VTMFX is a good way to go. Don’t listen to people telling you to put this money in a 100% equity index fund. Not a good choice for a horizon possibly short as 3 years