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Post by chang on Jan 16, 2021 4:15:57 GMT
4) Buying single stocks isn't easy. If you want to do both: use mainly index mutual funds and buy up to 5 single stocks. The first guarantee market return and the second may allow you to hit a home run. +1. For me, it's mainly for fun. Example: I always had my eye on McCormick. I figured that people would always buy salt and oregano no matter what. A few years ago it dropped to $59. I bought 100 (?) shares (cannot remember exactly), and stupidly ( stupid!, stupid!, stupid!) I never bought any more. I have 225.78 shares now. Is it a needle-mover for my portfolio? Of course not. But it's fun to own. One day I will sell it to fund a purchase, may a motorbike or something. Right now I own only MKC, RTX and JPM, and none of them are needle movers. Incidentally, I am in no way disparaging people whose portfolio consists in large part of major stock holdings. Kudos to them for eliminating CG distributions! I simply do not possess the skills to do that. There is another advantage to owning individual stocks. On a day when everything is down, that stock might be up. Today for example, the bright spot in my portfolio was McCormick, up 1.98%. (Note: since I sold RTX, my only stocks are MKC and JPM. No others on my radar, but I never preclude adding some for fun.)
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Post by JR.FA on Jan 18, 2021 23:08:16 GMT
I'm surprised not to find any posts here. I invest to augment my pension, so have chosen to invest for income. I am all in individual stocks, No bonds, no mutual funds, and my portfolio produces a yield of about 5%. While I hold "the usual suspects" like utilities and REITs, I have a special fondness for pharmas, and I have been searching out tech stocks that pay good dividends, such as IBM, STX, NTAP. Have you considered AVGO, Kathy? We use it in our equity dividend portfolios.
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Post by xray on Jan 19, 2021 16:37:02 GMT
For kathiel ....
If/when retired, you might find "CEF's" a very good to invest. The NAV's [available each day (normally)] against the current [traders] MktPrc is always a good way to start analysis evaluations [going forward]. Add to this that the CEF's are run by professional managers [with supposedly all of the necessary qualifications]. Some of us look at "Manager" performance for a 3month period as a guide for putting what we like into our watch list [prior to buying]. Insider buying/selling is another analysis point...
Disclosure: Many of us in retirement use 10% dividend as a guide for any new investments [found that some that meet that criteria are "undervalued"]....
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Post by uncleharley on Jan 19, 2021 18:22:38 GMT
I also like to use the premium/discount that a CEF is selling at as a sentiment indicator for that fund. Sentiment is of course a contrary indicator. The higher the premium is, the less likely I am to buy it. I may hold a CEF with a high premium for a while, but I will not add to the position.
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Post by xray on Jan 19, 2021 20:33:24 GMT
For uncleharley ....
Be careful what you wish for....
The premium, when adding shares, may not mean much in certain instances. A good example of this is currently RIV [coming off their RO [rights offering] with lots of cash to invest [NAV will be lagging the MktPrc in the short term IMHO]. The timing of their investment from cash to specific additions to their portfolio is unknown but we know they carry some cash for investment. My current analysis shows RIV at 10star [report grade of 100] and paying a 12.03% dividend [COB Friday]. Some of us "dollar cost averaged Up" today. Has been a great player in the CEF world as some of us already have >$1500 in CapGain....
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Post by uncleharley on Jan 19, 2021 21:57:03 GMT
For uncleharley .... Be careful what you wish for.... The premium, when adding shares, may not mean much in certain instances. A good example of this is currently RIV [coming off their RO [rights offering] with lots of cash to invest [NAV will be lagging the MktPrc in the short term IMHO]. The timing of their investment from cash to specific additions to their portfolio is unknown but we know they carry some cash for investment. My current analysis shows RIV at 10star [report grade of 100] and paying a 12.03% dividend [COB Friday]. Some of us "dollar cost averaged Up" today. Has been a great player in the CEF world as some of us already have >$1500 in CapGain.... There will always be caveats and no one should make a buy/sel/hold decision that is based on one indicator. However I still think that the premium/discount of the NAV is a very good sentiment indicator for a specific CEF.
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Post by retiredat48 on Jan 23, 2021 1:28:22 GMT
Chang earlier posted: "Whenever one of my mutual funds (in a taxable account) pays an ugly CG distribution, I think about people who only own individual stocks. From a tax standpoint, you couldn't do better."
Not so.
Instead of OEF's, Exchange Traded Funds are great in taxable, re not having capital gains distributions. For you see, the government/IRS has given ETFs recognition that in the way they use what is called "creation units", buying and selling each day as part of operations, they are exempt from most gains as having to call them capital gains. Thus, the annual payout of capital gains for ETFs is nil to very small.
And if you hold until death, you get a step-up in cap gain benefit (although Biden may do away with this).
So use ETFs in taxable, as cap gain distributions can be brutal in slowing growth, if you have to pay taxes on same.
For example, if you own an allocation in domestic small caps, in taxable, the ETF is like a mini-IRA. USA Small Caps pay very little in annual dividends; and the ETF wrapper keeps cap gains to a bare minimum. Same growth as if in an IRA!
R48
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Post by chang on Jan 23, 2021 1:36:24 GMT
retiredat48 Right, you mentioned this a year or two ago on M* and it was news to me at the time. There aren't a lot of ETFs I really like; SCHD is one, though, and I am happy to own it in a taxable account. Edit: what about Vanguard ETFs which are simply another share class of an OEF? For example VIGAX/VUG, VBILX/BIV, etc. Does the ETF have any tax advantages that the OEF does not? retiredat48 yogibearbull
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Post by yogibearbull on Jan 23, 2021 2:42:32 GMT
retiredat48 Right, you mentioned this a year or two ago on M* and it was news to me at the time. There aren't a lot of ETFs I really like; SCHD is one, though, and I am happy to own it in a taxable account. Edit: what about Vanguard ETFs which are simply another share class of an OEF? For example VIGAX/VUG, VBILX/BIV, etc. Does the ETF have any tax advantages that the OEF does not? retiredat48 yogibearbull Vanguard has its US-patented ETF class that it hasn't licensed to anyone. It has both advantages and disadvantages. Note that there were large identical realized CG distributions in some VG bond index funds [OEFs, ETFs] and VG institutional total stock market fund [OEF, ETF] in 2020. Advantage for VG ETF is that it can tap into larger pool for in-kind trading without any tax implications. Disadvantage is that huge redemptions in one hit the other, and then both [OEF, ETF] take the same hit. On the whole, advantages outweigh disadvantages. BTW, VG has only self-standing ETFs in Europe and it may also introduce those in the US. In fact, its forthcoming active ultra-short-term bond ETF will be a self-standing ETF [so 2 firsts].
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