Money and Investing (formerly Pfizer Stock prices)

[genius]

The point I'm trying to make is forget about the volatility in the market as far as investing for a newborn's college as the horizon is 18+ years and since no one is successful in timing the market (well proven ) stocks have done better than fixed income investments in the long run.
Now if someone who needs income vs potential for growth (say someone retired or perhaps wanting to buy a house or help funding a kids imminent college costs or even something as simple as funding the next couple of years RMDs) then some solid involvements, as close to being cash, are needed. Treasuries are not that but I Bonds are. (yeah, too bad only 10K/year per person - but for the average Joe over a decade not a bad thing to do)

So IMHO, someone with a newborn funding for college 18+ years away would be wise to invest aggressively at the beginning gradually turning conservative as the $ horizon approaches. If grandpa wants to gift an I Bond, sure thank you grandpa, but would be better to put some cash into a 529 the Dad or Mom can allocate to aggressive investments.

Disclaimer: genius is not a FA, but what is posted is exactly what was done and junior has graduated from college with advanced degrees into good paying career and not a penny in college loans and no strain whatsoever on parents finances.

 

[Bricktop]

Yeah, I wouldn't want to inconvenience my heirs when they got the $$$.
Hint, it's not peanuts.

Spend your kids inheritance. It builds character

 

[genius]

Spend your kids inheritance. It builds character

I have everything a need at the spending level I'm at. It isn't my intent to leave a big inheritance but depending on how things work out, there is a good possibility that there will be some $ left.

 

[Bricktop]

I have everything a need at the spending level I'm at. It isn't my intent to leave a big inheritance but depending on how things work out, there is a good possibility that there will be some $ left.

You went from $$$ to $. Depends on what your definition of big is. Hint hint.

 

[genius]

You went from $$$ to $. Depends on what your definition of big is. Hint hint.

It depends of the burn-down of $'s during the last couple years of life.
Anyway, I was discussing this with a buddy in that my goal is to spend my last nickel just as I draw my last breath.

He called me a small thinker and said that his goal was to spend all his wealth and then bump up against all his credit limits when he takes his last breath.

 

[Satisfied customer]

It depends of the burn-down of $'s during the last couple years of life.
Anyway, I was discussing this with a buddy in that my goal is to spend my last nickel just as I draw my last breath.

He called me a small thinker and said that his goal was to spend all his wealth and then bump up against all his credit limits when he takes his last breath.

I was intrigued Genius and made a few accounts and did the $10k in each for the I bonds. I have to say the platform is horrendous but what could I expect from the government. Thanks!

 

[trader1]

It depends of the burn-down of $'s during the last couple years of life.
Anyway, I was discussing this with a buddy in that my goal is to spend my last nickel just as I draw my last breath.

He called me a small thinker and said that his goal was to spend all his wealth and then bump up against all his credit limits when he takes his last breath.

If I had the balls, I would do just the same

Unanswered question
- When do we take that last breath?

I should live by the thought YOLO and monger every day

 

[trader1]

Not much talk about market volatility lately..

Nasdaq down about 5% as I write this…
Do think we have some more to go, but think it’s time to put a little money to work…

On a side note, FA suggested they were going to look at some individual bonds to buy as yields creep up

 

[pokler]

Not much talk about market volatility lately..

Nasdaq down about 5% as I write this…
Do think we have some more to go, but think it’s time to put a little money to work…

On a side note, FA suggested they were going to look at some individual bonds to buy as yields creep up

VTIP

 

[Satisfied customer]

Picked up some HNDL today

 

[genius]

.....Do think we have some more to go, but think it’s time to put a little money to work….....On a side note, FA suggested they were going to look at some individual bonds to buy as yields creep up

If you think anyone knows, you are kidding yourself.

The way I look at it, it is not the % declined but when the market was last at today's prices. So I look at it as time lost not $ lost.
Prediction of a correction came by some "experts" all along the spectacular ride up past couple of years.

Look at the charts of the investments you have and you will see what I mean.

Ps. I would think (other than the fact that you can't invest too much into them) that my advice on I Bonds is looking pretty good right now.

 

[OSMonger]

Look into taxable munis for excess yield without compromising in credit quality. Much smaller market but there are great opportunities.

 

[trader1]

Look into taxable munis for excess yield without compromising in credit quality. Much smaller market but there are great opportunities.

Individual bonds or Mutual Fund?

 

[pokler]

Individual bonds or Mutual Fund?

Individual..They were issued in the Obama years under a Build America program. But you can find tax free muni's at similar yields as the muni market is disjointed now.
You can find tax free muni funds yielding about 7.5% and selling at discounts to nav. RFMZ is one .

 

[genius]

Individual..They were issued in the Obama years under a Build America program. But you can find tax free muni's at similar yields as the muni market is disjointed now.
You can find tax free muni funds yielding about 7.5% and selling at discounts to nav. RFMZ is one .

Apropos muni funds, I could never see the advantage of buying a bond mutual fund as opposed to an individual bond (I'm talking about solid investment grade bonds). I treat fixed maturity bond ETF's the same as an individual bond but with even lower risk. Management fees are small as they don't do any managing — the bonds n the ETF are whatever they are.

For example I have a 5 year ladder of fixed maturity investment grade bond ETF's in my IRA (rolled from my 401K and individual IRAs) with each ETF maturing (they liquidate and cash out to investors) in Dec of each year that I use for cash for my RMD's. I don't care about changes in interest rates (which can dramatically affect bond funds asset values) as I know exactly what I'm buying into in terms of interest and cash at maturity.

My thinking is I also don't care about stock prices in terms of selling stock to meet RMD's if the market is down when I need to sell or if interest rates have climbed (bond fund prices will drop when that happens) and I need to sell those for my RMD's.

Please educate me if my thinking is flawed.
Thanks.

 

[pokler]

Apropos muni funds, I could never see the advantage of buying a bond mutual fund as opposed to an individual bond (I'm talking about solid investment grade bonds). I treat fixed maturity bond ETF's the same as an individual bond but with even lower risk. Management fees are small as they don't do any managing — the bonds n the ETF are whatever they are.

For example I have a 5 year ladder of fixed maturity investment grade bond ETF's in my IRA (rolled from my 401K and individual IRAs) with each ETF maturing (they liquidate and cash out to investors) in Dec of each year that I use for cash for my RMD's. I don't care about changes in interest rates (which can dramatically affect bond funds asset values) as I know exactly what I'm buying into in terms of interest and cash at maturity.

My thinking is I also don't care about stock prices in terms of selling stock to meet RMD's if the market is down when I need to sell or if interest rates have climbed (bond fund prices will drop when that happens) and I need to sell those for my RMD's.

Please educate me if my thinking is flawed.
Thanks.

There is no need to sell in the IRA for RMD as you can distribute in kind. Your bond strategy is solid in this environment as it migrates risk of rising rates and you can't do tax loss swaps and no advantage to tax free income . But in non Ira accounts some of these closed end fund like the I noted can make sense as a 7.5 yield can be taxable equivalent of 10 depending on tax bracket. They are volatile but you can swap one for another and use the loss for gain offset .

 

[trader1]

There is no need to sell in the IRA for RMD as you can distribute in kind. Your bond strategy is solid in this environment as it migrates risk of rising rates and you can't do tax loss swaps and no advantage to tax free income . But in non Ira accounts some of these closed end fund like the I noted can make sense as a 7.5 yield can be taxable equivalent of 10 depending on tax bracket. They are volatile but you can swap one for another and use the loss for gain offset .

With respect to the fund that you mentioned earlier..
- A respectable yield of 7.5%
- The fund appears to be down 25% off its highs from a few years back ( not taking into account distributions.. if any)

Assuming one wants to stay somewhat risk adverse, ( and of course no one could have predicted the rapid rise in rates lately), why would I want to invest in a fund like this as opposed to a solid blue chip that would pay 4-5% dividend ..
( of course the stock could depreciate too.. )

Is this a fair question?

 

[pokler]

With respect to the fund that you mentioned earlier..
- A respectable yield of 7.5%
- The fund appears to be down 25% off its highs from a few years back ( not taking into account distributions.. if any)

Assuming one wants to stay somewhat risk adverse, ( and of course no one could have predicted the rapid rise in rates lately), why would I want to invest in a fund like this as opposed to a solid blue chip that would pay 4-5% dividend ..
( of course the stock could depreciate too.. )

Is this a fair question?

It's only meant for the bond part of your portfolio. Because it's down so much makes it worth looking at. These types of funds that use leverage are volatile and can pop up just as easily as it went down and while you wait you get the taxable equivalent of 9-10%. And of coarse it distributed from day 1 ..lol.

 

[genius]

There is no need to sell in the IRA for RMD as you can distribute in kind. Your bond strategy is solid in this environment as it migrates risk of rising rates and you can't do tax loss swaps and no advantage to tax free income . But in non Ira accounts some of these closed end fund like the I noted can make sense as a 7.5 yield can be taxable equivalent of 10 depending on tax bracket. They are volatile but you can swap one for another and use the loss for gain offset .

Thanks for your comments.

Right, I could do my RMD "in kind" but as I want a % of my taxable IRA in bonds anyway (I'm heading to to my mid-70's this year and and perhaps 80%+ of my IRA is in stocks) I use the cash from my RMD to go directly to my FED & NYS taxes. Most of the RMD that is left goes to QCD's for certain charities I support: Doctors without Borders, certain veteran's groups, certain scholarship groups, et. al.

I do not withhold anything from all my other investments, pensions and SS and do not do estimated (never did and never will — I like to keep my money until the last possible day). IRS considers withholding directly from IRA's as being evenly distributed throughout the year.

I had a minor problem with 2020 when gov't suspended req for RMD's so I did same withholding scheme with SS and pensions toward end of the year.

When I was working I would do zero withholding from my paycheck (exc 401K and FICA of course) and withhold my whole paycheck during the later part of the year to meet tax liabilities. Never got a refund (I refuse to lend money to gov't for zero interest) and never had any penalties for — like forever (or at least when I had my own company and could easily change withholding without squawks from accounting.

Just a quirk I have (along with many others).

 

[richieny]

Put some money in I Bonds earlier in the year. Pretty sure you cannot buy them in an IRA.