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I am going to transfer my very small ($2,129)Vanguard Balanced Index Fund IRA to the new Janus Global Technology Fund. Since it's an IRA, it's not going to affect me tax-wise. I know that JAGTX is a new fund, but I'm willing to take the risk ... it's up over 100% while VBINX is hovering in the 5% range. My question relates to timing. Should I wait until after the Vanguard dividend distribution in December, or transfer the funds now?
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Greetings, Mousekaroo, and welcome. You asked:

<<I am going to transfer my very small ($2,129)Vanguard Balanced Index Fund IRA to the new Janus Global Technology Fund. Since it's an IRA, it's not going to affect me tax-wise. I know that JAGTX is a new fund, but I'm willing to take the risk ... it's up over 100% while VBINX is hovering in the 5% range. My question relates to timing. Should I wait until after the Vanguard dividend distribution in December, or transfer the funds now?>>

While that timing issue may have merit in a taxable account, it has little affect if any within an IRA. When a fund pays a dividend, the share price of that fund falls by about the same amount immediately thereafter. So as an example, say you had 100 shares today at $10 per share. The account is worth $1K. The fund pays a dividend of $1 per share, so you receive $100. After the dividend is paid, the share price is $9. That means you have $900 in shares and $100 in dividends (assuming no reinvestment), for a total of $1K. In a taxable account, you would pay income taxes on the dividends, but in an IRA you won't. Thus, waiting to transfer your IRA won't change things for you.

Regards..Pixy
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Mousekaroo posted:

"I am going to transfer my very small ($2,129)Vanguard Balanced Index Fund IRA to the new Janus Global Technology Fund. Since it's an IRA, it's not going to affect me tax-wise. I know that JAGTX is a new fund, but I'm willing to take the risk ... it's up over 100% while VBINX is hovering in the 5% range. My question relates to timing. Should I wait until after the Vanguard dividend distribution in December, or transfer the funds now? "

Mutual fund dividend and gain distributions in December are a moot point for IRA/401K holdings because there are not taxes owed.

The question is whether you think VBINX will increase more than JAGTX while you hold VBINX until January. If you think JAGTX will rise more than VBINX, then move now. If you think JAGTX will drop, hold VBINX.

It is a timing issue and I have never been very good at timing. In my IRA and 401K, if I think an issue is doing poorly and I find an issue I think will do better, I move on it. Sometime waiting would have been better but only nominally.

BGP
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