Money and Investing (formerly Pfizer Stock prices)
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I’m very heavy in tech / software via PE fund where I am locked in for years. Took profits through the Santa rally and plan to continue next week.
I’m expecting inflation to catch up to the market later this year and am looking for places other than TIPS to park cash while waiting. So far I’m writing PUTs every few weeks against dividend paying ETFs.
Anyone like airlines / travel while hoping for a retreat in COVID?
I’m expecting inflation to catch up to the market later this year and am looking for places other than TIPS to park cash while waiting. So far I’m writing PUTs every few weeks against dividend paying ETFs.
Anyone like airlines / travel while hoping for a retreat in COVID?
My largest holding is in Private Equity, followed by real estate, and then the equities holdings I manage myself.
I’m looking for ideas for the equities I manage and usually approach from a macro perspective. From a value standpoint I am leaning towards airlines / travel for a near term bounce as weather provides a tailwind against COVID heading into 2Q22
I’m looking for ideas for the equities I manage and usually approach from a macro perspective. From a value standpoint I am leaning towards airlines / travel for a near term bounce as weather provides a tailwind against COVID heading into 2Q22
!st some background:
I do not do estimated taxes (never did, see below*). My RMDs consist of 2 parts: federal & State tax withholding (almost all of the value of my RMDs) and the rest transferred to taxable brokerage accounts where they are invested. My RMD's come from a maturing IBonds ETF; I ladder them many years out and each one matures in December where they liquidate and distribute proceeds that are used for that year's RMD's.
My investments consist of 1/3 401K (requiring RMD's) 1/3 Roths (regular ad back door) and 1/3 taxable. There are no bonds in my taxable accounts; only stocks and index funds as they have favorable tax rates as LTCG.
Other than all my F&S taxes, I am lucky to have sufficient pensions and SS and no mortgage or loans such that no other money comes out of my portfolio's.
So to answer your question: By % gain consists of (value of portfolio on Dec 31 - value on Jan 1)/Value on Jan 1. My RMD's come out in mid Dec when I have a pretty good idea of my tax liabilities so technically the gain I posted is understated.
* IMHO, never do estimated if you can avoid it:
When I was a principal in my company (and accounting did whatever I told them — always legal) what I would do is withhold $0 for taxes (couldn't do anything about FICA) until the fall when I guessed on my tax liability. I would figure out my tax liability divided by the # of weeks were left when if I withheld 100% of my salary I would meet it (FICA was gone by then and I already w/h max to my 401K). I belived in getting my $ into my 401K as early in year as possible so that they were invested as early as possible.
When I retired and before 70 1/2 I did the same with withholding on my pensions, i.e., changed withholding to 100% toward the end of the year and 0% prior.
With my RMD's after I hit 70 1/2 — explained above.
The problem with RMD's, IMHO, is if you make a mistake there are penalties. I define mistakes as either being late on a payment or under estimating or over over estimating (and hence the penalty is giving gov't a interest free loan. PS. I am pissed when I get a tax refund when I file in April as that means I miscalculated and loaned the Gov't money interest free. I could never understand why people intentionally over withhold so they get a large refund instead of just withholding correctly and having some sort of automatic savings account for the same amount being over withheld.
These schemes have been done by me for 40 years w/o incident from tax agencies. It seems under the rules that money withheld this way is presumed by the IRS as being w/h evenly through out the year even though income (say a big stock gain or a bonus at being of the year), is not.
Seems like a lot of work but actually maybe a couple of hours per year, perhaps even less time than doing estimated.
r
I do not do estimated taxes (never did, see below*). My RMDs consist of 2 parts: federal & State tax withholding (almost all of the value of my RMDs) and the rest transferred to taxable brokerage accounts where they are invested. My RMD's come from a maturing IBonds ETF; I ladder them many years out and each one matures in December where they liquidate and distribute proceeds that are used for that year's RMD's.
My investments consist of 1/3 401K (requiring RMD's) 1/3 Roths (regular ad back door) and 1/3 taxable. There are no bonds in my taxable accounts; only stocks and index funds as they have favorable tax rates as LTCG.
Other than all my F&S taxes, I am lucky to have sufficient pensions and SS and no mortgage or loans such that no other money comes out of my portfolio's.
So to answer your question: By % gain consists of (value of portfolio on Dec 31 - value on Jan 1)/Value on Jan 1. My RMD's come out in mid Dec when I have a pretty good idea of my tax liabilities so technically the gain I posted is understated.
* IMHO, never do estimated if you can avoid it:
When I was a principal in my company (and accounting did whatever I told them — always legal) what I would do is withhold $0 for taxes (couldn't do anything about FICA) until the fall when I guessed on my tax liability. I would figure out my tax liability divided by the # of weeks were left when if I withheld 100% of my salary I would meet it (FICA was gone by then and I already w/h max to my 401K). I belived in getting my $ into my 401K as early in year as possible so that they were invested as early as possible.
When I retired and before 70 1/2 I did the same with withholding on my pensions, i.e., changed withholding to 100% toward the end of the year and 0% prior.
With my RMD's after I hit 70 1/2 — explained above.
The problem with RMD's, IMHO, is if you make a mistake there are penalties. I define mistakes as either being late on a payment or under estimating or over over estimating (and hence the penalty is giving gov't a interest free loan. PS. I am pissed when I get a tax refund when I file in April as that means I miscalculated and loaned the Gov't money interest free. I could never understand why people intentionally over withhold so they get a large refund instead of just withholding correctly and having some sort of automatic savings account for the same amount being over withheld.
These schemes have been done by me for 40 years w/o incident from tax agencies. It seems under the rules that money withheld this way is presumed by the IRS as being w/h evenly through out the year even though income (say a big stock gain or a bonus at being of the year), is not.
Seems like a lot of work but actually maybe a couple of hours per year, perhaps even less time than doing estimated.
r
You are correct, withholding from W-2 earnings is assumed to be spread evenly throughout the year and that is smart tax planning on your behalf.
Some people working for big corporations can have some difficulty getting thier HR department to make changes tinely and correctly.
As a side note, some people are extremely bad with money and in my expierence some people rely on these refunds as their only way to save money. If they adjusted things to withhold properly they would find a million ways to blow that extra $200 a week in their pocket instead.
Not everyone can be a genius : )
Some people working for big corporations can have some difficulty getting thier HR department to make changes tinely and correctly.
As a side note, some people are extremely bad with money and in my expierence some people rely on these refunds as their only way to save money. If they adjusted things to withhold properly they would find a million ways to blow that extra $200 a week in their pocket instead.
Not everyone can be a genius : )
I don't have to deal with any K1's as I don't have any investments that issue them.
That said I used to handle finances for elderly family member who had them and they were always a pain in the ass as they always came in close to April 15 and they commonly had crreced K1's after filing resulting in amended returns. He used to do estimated done but when I took over we used my method of with holding from 401K and SS to meet tax liabilities and no estimated.
This went on for 8 years w/o IRS incident until he died.
Also, I helped out another elderly relative who did estimated.
She screwed up in that each estimated payment was 100% of her total tax liability instead of 25% per payment. So by Sept she already paid in 3X her year's tax liability. She sent in her Sept estimated 10 days late (she was 92 and confused a bit) and IRS charged her penalty and interest on the excess money.
She asked for my help and we stopped the estimated merry-go-round and simply W/H from her SS and pension enough to cover those incomes plus investment income.
Unless you have a windfall like winning the lottery or some major killing in the stock market, I don’t see why anyone does estimated assuming you have enough SS or RMDs that you can do excess with holding from those accounts. Even if on salary you can over with hold more than you salary requires to meet investment incomes tax liability.
That said I used to handle finances for elderly family member who had them and they were always a pain in the ass as they always came in close to April 15 and they commonly had crreced K1's after filing resulting in amended returns. He used to do estimated done but when I took over we used my method of with holding from 401K and SS to meet tax liabilities and no estimated.
This went on for 8 years w/o IRS incident until he died.
Also, I helped out another elderly relative who did estimated.
She screwed up in that each estimated payment was 100% of her total tax liability instead of 25% per payment. So by Sept she already paid in 3X her year's tax liability. She sent in her Sept estimated 10 days late (she was 92 and confused a bit) and IRS charged her penalty and interest on the excess money.
She asked for my help and we stopped the estimated merry-go-round and simply W/H from her SS and pension enough to cover those incomes plus investment income.
Unless you have a windfall like winning the lottery or some major killing in the stock market, I don’t see why anyone does estimated assuming you have enough SS or RMDs that you can do excess with holding from those accounts. Even if on salary you can over with hold more than you salary requires to meet investment incomes tax liability.
well I am no where close to SS and claiming 0 for salary doesn’t come close to offsetting the investment distributions. You are correct about the K1s and I typically don’t get finals until August so every year it’s an extension for me. What can make it even worse is having to file in multiple states depending on the nature of the particular investment. I live by estimated taxes.
At my age when I was "not close to SS", I remember specifying the actual $ amount I wanted with held on my W4
"Line 4C Extra withholding. Enter any additional tax you want withheld each pay period "
It's been a long time and I forgot exactly how I did it but I recall withholding any amount I wanted. I probably did this for over 20 years w/o any IRS problems or NYS.
I suspect the state form has a similar entry.
"Line 4C Extra withholding. Enter any additional tax you want withheld each pay period "
It's been a long time and I forgot exactly how I did it but I recall withholding any amount I wanted. I probably did this for over 20 years w/o any IRS problems or NYS.
I suspect the state form has a similar entry.
Don't know if I agree about "great job"
Should a 74 yr old really be so heavily invested in stocks?
If you watched some guy bet on red at roulette and hit red 5 times and would you say to him "great job"?
Anyone who says that he predicted that the boring S&P and total stock market funds I have would double in past 5 years is full of it. I just got lucky.
The question is do I press my luck or cash out.
Should a 74 yr old really be so heavily invested in stocks?
If you watched some guy bet on red at roulette and hit red 5 times and would you say to him "great job"?
Anyone who says that he predicted that the boring S&P and total stock market funds I have would double in past 5 years is full of it. I just got lucky.
The question is do I press my luck or cash out.
Here is how I look at a lot of money left on the table:
I always had term life insurance to protect my family. Once they no longer needed protection (college done, house paid for, etc) I stopped.
Was that a bad idea? I didn't die so was it foolish to leave all that money "on the table" that I could have put to investing?
Similarly with fire insurance etc.
Yes, your conservative views limited upside gains but you theoretically benefited by limited downside loses — consider it like the cost of insurance.
BTW, Isaving bonds purchased directly from the treasury ( treasurydirect.gov ) are now paying 7.12%. Alas you can only invest $10K per person per year. Note that they are adjusted every 6mo by inflation. As close to zero risk as you can get.
I always had term life insurance to protect my family. Once they no longer needed protection (college done, house paid for, etc) I stopped.
Was that a bad idea? I didn't die so was it foolish to leave all that money "on the table" that I could have put to investing?
Similarly with fire insurance etc.
Yes, your conservative views limited upside gains but you theoretically benefited by limited downside loses — consider it like the cost of insurance.
BTW, Isaving bonds purchased directly from the treasury ( treasurydirect.gov ) are now paying 7.12%. Alas you can only invest $10K per person per year. Note that they are adjusted every 6mo by inflation. As close to zero risk as you can get.
I believe you posted the inform about treasury direct sometime ago. Valuable tool!!
Ty
With the exception on the home I own ( no plans to sell for 5-10) all my retirement funds are concentrated in equities/bonds/cash- Hence the conservative view-Little if any pension that I am not eligible for, for another 7 years.
Although my thinking is slightly flawed I am close to having enough savings to retire soon without being invested in the markets. Inflation will take a significant check out of this, I realize…
I sleep easier knowing this, as opposed to seeing a 20-30 percent correction and than have to listen to the pros say dont worry, the market will come back
Ty
With the exception on the home I own ( no plans to sell for 5-10) all my retirement funds are concentrated in equities/bonds/cash- Hence the conservative view-Little if any pension that I am not eligible for, for another 7 years.
Although my thinking is slightly flawed I am close to having enough savings to retire soon without being invested in the markets. Inflation will take a significant check out of this, I realize…
I sleep easier knowing this, as opposed to seeing a 20-30 percent correction and than have to listen to the pros say dont worry, the market will come back