Key insights
- An investor is considering taking profits in their IRA after an 80k gain since January. They are weighing the option of reinvesting Q2 dividends before selling and are concerned about a potential market downturn. They also question whether to reinvest dividends in small-cap ETFs (VXUS, VBR, SCHA) and utilities (XLU) given current interest rate expectations. The investor views small caps and utilities as defensive plays.
So IRA portfolio has risen 80k since January and would like profits. Is it better to DRIP the Q2 dividend and then take profits or is there a better order to do that? Hopefully the market won’t crash before then.
Some of the bigger positions are 10-15% of portfolio while others are around 5-15%. But some are up 15% and the profit would be nice to hold for a dip.
Also are small caps like VXUS VBR and SCHA worth dripping now at their current prices? thinking it might be awhile before rates are lowered and they rise again. Small caps and utilities XLU are my defensive plays.
Thank You.