Hope the title is clear enough.
I recently purchased an ETF in a consolidated sector with high risk/high reward potential.
It makes up about 5% of my taxable account with the remaining invested in total market funds with 60/40 US/INT allocation.
My plan is to capture the gains when they are there and let it ride during negative (from cost-basis) periods. I would then take those gains and purchase shares of my total market ETF's, treating the gains as additional income, so I can reinvest in my long-term holdings. This "income" would of course be short-term gains.
Opinions wanted as whether this a decent plan, others who may do something similar, or if this makes no sense at all.
My gut tells me *it depends*: We will not know the benefit, if any, until being able to look back at the past performance of this "strategy".
The amount out short-term gains, annually, needed from the feeder fund to make this a better use of the capital invested (the 5% allocation) is something I think I could calculate and probably will. Still want to hear from others as I always find that beneficial.
Thanks all