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There's a way for you and your wife to get around the $10,000 limit this year if you and she do not plan to buy any Series I Bonds next year (in 2023 calendar year) since interest rate may be lower in 2023 than 2022.
In addition to the $10,000 in Series I Bonds that you will buy for yourselves, buy $10,000 in Series I Bonds as a gift to each other in your separate TreasuryDirect accounts. You each will have to hold the Series I Bond gift in your own TreasuryDirect gift box until 2023 before you can deliver it to the recipient to avoid exceeding the annual $10,000 limit.
You buy I Bonds as a gift in two stages: buying and delivering.
You must give the recipient’s name and Social Security Number in the buying stage. Only a personal account can buy or receive gifts. A trust or a business can neither buy a gift nor receive a gift.
The bonds you buy as a gift go into a “gift box.” You can’t cash out the bonds stored in your gift box. This is analogous to you going to a store and bringing back the gift to your closet. The gift already has the recipient’s name on it. You can’t steal the gift for yourself.
The recipient doesn’t know you bought a gift for them until you deliver the gift to them. This is analogous to bringing the gift from your closet when you visit family. You’ll need the recipient’s TreasuryDirect account number to deliver a gift.
I Bonds stored in your gift box are in limbo. You can’t cash them out because they’re not yours. The recipient can’t cash them out either because they don’t have them yet.
There’s a minimum wait of five business days between buying and delivering to make sure your bank debit clears. There’s no maximum stay in the gift box. You can pre-purchase gifts and wait to deliver them at a much later time. You can also choose to deliver gifts in bits and pieces as opposed to in one lump sum.
Purchase Limit
Delivered gifts count toward the $10,000 annual purchase limit of the recipient in the year of delivery. You can still buy gifts for others even if you already bought the maximum for yourself.
You can buy a maximum of $10,000 for any recipient in one purchase but there’s no limit in how many recipients you buy for or how many times you can buy for the same recipient in any calendar year. If you’d like, you can buy $10,000 worth of I Bonds for each of your 20 family members or you can make 5 separate purchases of $10,000 each for the same family member, all in the same calendar year. The limit is in how much you can deliver to the same recipient in the same calendar year.
If the recipient also bought the maximum for themselves this year, delivering additional I Bonds to them will put them over their annual purchase limit. You’ll have to wait to deliver in a year they’re not buying the maximum themselves. If you bought more than $10,000 as gifts for the same recipient, you’ll have to wait to deliver the gifts across multiple years.
Interest and Holding Period
Interest and the holding period start in the month of your purchase. If you pre-purchase gifts and wait to deliver them to the recipient at a later time, bonds in the gift box still earn the same interest rates as other bonds. The holding period for cashing out also starts right away. If five months have passed between the time of purchase and the time of delivery, the recipient only has to wait another seven months before they can cash out as opposed to the full 12 months for freshly purchased bonds.
[ . . . ]
Pre-Purchase/Frontload
It also works to a limited extent if you think the high interest rates on I Bonds are only temporary. You can buy a gift for your spouse and hold it in your gift box. Have your spouse do the same for you. Wait until interest rates drop and the two of you don’t buy I Bonds anymore. Then you can deliver the gift to each other. The older gift bonds earned the high interest rates in the years past and they have aged enough for immediate cashout.
We’re buying each other a gift this year to keep undelivered in the gift box in addition to our normal purchases. If the interest rate is still good next year, we’ll buy normally and keep the gift in the gift box. If the interest rate isn’t good anymore, we’ll skip the purchase, deliver the gift, and cash out immediately.
Because there’s a limit in how much you can deliver to the same person each year, don’t go overboard with this. If you hold $100,000 in the gift box and the interest rates are no longer competitive, those bonds will be in limbo for a long time while earning uncompetitive interest rates.
There's a way for you and your wife to get around the $10,000 limit this year if you and she do not plan to buy any Series I Bonds next year (in 2023 calendar year) since interest rate may be lower in 2023 than 2022.
In addition to the $10,000 in Series I Bonds that you will buy for yourselves, buy $10,000 in Series I Bonds as a gift to each other in your separate TreasuryDirect accounts. You each will have to hold the Series I Bond gift in your own TreasuryDirect gift box until 2023 before you can deliver it to the recipient to avoid exceeding the annual $10,000 limit.
AZuser, Thx for this valuable info. I can offer a word of caution to all. I placed an order to Buy $10K of I Bonds on a newly opened TD account. I received an email for TD the next day, however, when I went to confirm the bonds in my account - I did not see it!! So on or about April 29 or 30, I scheduled another order for $10K to take place May 3, 2022, guessing the original order did not register. TD sent me an email on May 3 or 4, indicating that I went over the $10K per annum amount. They will return the Funds taken from my linked checking acc't - but it takes 8 to 10 WEEKS!! So, I'm out of $10 K for 10 weeks. So, two points here: Go Slow with the account opening; And pay attention to the Bond registration process too. The first order was made as me the only Primary Owner. The second order (which will be reversed ) was made more thoughtfully by adding my spouse as Secondary Owner. I don't see any manner to add secondary Beneficiaries (my 2 adult Sons for instance). That serves to Remind you folks... Pay attention to your Beneficiaries on All your Assets: 401Ks, Bank Accounts, Life Insurance, etc... I learned that very important fact form a PBS Financial Expert seminar (No Not SUZY O), 401ks especially. From what I recall, if you don't have your spouse (or whoever), named as the beneficiary, the entire account is part of your estate. If the survivor needs monies from that 401K to make estate tax payments, that Triggers Distributions which will cycle further tax liabilities in terrible cycle trap.
I'm going to see if I can have TD re-direct that second Bond Purchase to either my Wife's account ( I have not yet purchased an I Bond under her account) or Redirect it as a Gift as you described here . I tried calling.....1 and 1/2 hour Wait time on the phone. That's the Gov't.
I see some folks are looking at Inflation rates into the near future (6 months from now). Unless the current administration employs some "trickery" with the business stats, it doesn't appear likely that Inflation will reduce by any sizeable margin in the near term IMHO. I'm 70 yo. Saw this in the late 70s into the early 80s, until the measures that Reagan put in place to reduce interest rates, and thus inflation. I guess you have to do the math: High gas. oil, natural gas prices, higher shipping costs, restrictive supply distribution, refusal to pump more Domestic Oil, the damages of COVID, and now the Ukraine attack are all markers in the wrong direction. I digressed - these are political/social/ economic issues for different Forums.
After Blowing $300 Billion, U.S. Shale Finally Makes Money
Industry scraps pump-at-any-cost model that burned investors
Drillers set for record $30 billion of free cash flow in 2021
June 17, 2021
Marathon Oil Corp. used to represent everything that was wrong with U.S. shale: enormous debtloads, lavish executive pay and a seeming willingness to spend whatever it took to boost output. The company hemorrhaged money, and the stock plunged 84% from a peak in 2014 through the end of last year.
This year, CEO Lee Tillman took a different tack. He cut his own pay 25%, got rid of its corporate aircraft and with oil output down 20% after the pandemic, pledged to leave it there. The result? The stock doubled this year. Its peers are doing well too. U.S. wildcatters are the second-best performing sector in the S&P 500 Index.
After years of booms and busts that produced astronomical losses along with a whole lot of oil, the fracking industry seems to have found a sweet spot. It’s poised to generate more than $30 billion of free cash this year, a record, according to Bloomberg Intelligence. While that’s just a blip compared with the $300 billion that Deloitte LLP estimates the sector burned over the previous decade, it marks at least a temporary revival for an industry that a year ago had been largely written off by investors.
For sure, frackers have benefited from the 50% run-up in global oil prices this year as demand roars back in places where the pandemic has receded. Just as important to their bottom lines, though, has been the ability to hold back on new supply, to avoid drilling the more marginal wells they would have in years past. They’re saving cash instead of spending money to ramp up output at all costs.
It’s a turnaround from the early days of the shale revolution a decade ago, when new horizontal drilling and hydraulic fracturing techniques unlocked vast oceans of crude from rock previously considered impermeable, loosening the OPEC cartel’s grip on global production.
[ . . . ]
. . . to teach these old dogs a new trick: Discipline and prudence.
Oil Prices Top $100, Yet Some Big U.S. Frackers Let Their Production Fall
May. 7, 2022
Oil prices are at their highest in years and politicians want companies to pump more. But most large American frackers are standing pat, or even letting production decline, and instead are handing investors cash.
Much of the U.S. shale industry recently reported higher profits than in the same quarter a year earlier, but companies aren’t reinvesting more in production -- indeed, some have let U.S. output slip as they focus on paying investors. Nine of the largest U.S. oil producers this week said they shelled out a combined $9.4 billion to shareholders via dividends and share repurchases in the first quarter, about 54% more than they invested in new oil developments.
Limited spending, supply-chain constraints and harsh winter weather in some regions, analysts said, took a toll on shale production, which has increased only modestly so far this year. Some producers, including Pioneer Natural Resources Co., Marathon Oil Corp., APA Corp., formerly known as Apache, and Devon Energy Corp., reported drops in their domestic oil output from the prior quarter, down between 2% to 8%.
That some of the largest shale companies allowed production to slip amid the highest oil prices in years shows the extent to which the industry has adopted restraints on spending and made substantial growth in domestic output far less feasible than it was the last time oil prices topped $100 a barrel.
Even as Biden administration officials have urged shale executives to pump more to help ease high gasoline prices, most reporting earnings this past week said they wouldn’t alter spending plans in pursuit of growth, touting low rates of reinvestment in oil and dividend yields higher than most in the S&P 500 index.
“We are not adding any growth capital due to higher prices,” Marathon Chief Executive Lee Tillman told investors this week. “We are staying disciplined.”
Marathon, which has seen its stock price jump about 67% from the start of this year, said its first-quarter U.S. oil production was down about 8% from the prior three-month period. Pioneer’s output was down about 2%, adjusting for a divestiture. Coterra Energy Inc., the company formed by the merger of Cimarex Energy and Cabot Oil & Gas Corp., was about 6% lower.
I guess there is Always more than Meets The Eye on this topic and many others. Where the Bloomberg story may somewhat remiss is that they do not report on the Numerous and Expensive Obstacles that the Federal Government imposes on the Fracking and Oil Drilling Industries. Oil Pipeline work has been forced to Shut down, day one under biden ( I am Unable to use capital letters for his name). And of course Fracking is a No-No. But to curtail LNG, where supposedly there is more than 200 years of supply in USA alone, yet, the USA will continue to buy OIl and LNG from Russia, and emplore Iran and the Saudis to Pump more Oil is laughable, Climate Crazies Driven Energy Policies.Again, I am digressing, but I am very Angry, especially when we (New Yorkers - Bronx / Queens) have a bartender just a few years ago [thankfully not my area] , being a member of the House of Rep (AOC), spewing that the Cow's Farting are Polluting the environment???? What??? This is OUR Future!!
On Jan 1st I revamped my 'Income Mockfolio' to be 20% bond funds, 20% income/dividend funds, 20% covered call income funds and 40% stocks. The estimate target based on forward looking dividend yield was 4.72%. In Q1 the annualized yield increased from 3.67% (10/1/21) to 5.10%.
Dividend 'mockfolio' for Q2 ....
Tgt Forward Looking Yield is down from 4.63% in Q2 to 4.13% in Q3.
Total actual yield is up from 1.26% in Q1 to 1.36% in Q2.
Income is up Year-over-Year from $1071 Q2 2021, to $1558 Q2 2022 (includes change in portfolio value; $100k initial value).
3 of the 5 covered call funds slashed yields. Only JEPI and NUSI have retained premium yields as of June 30.
Overall equity value is down about 10% YTD, about 9% better than the S&P500 over the same period.
Top 5 losers in terms of equity lost since purchase:
Intel (INTC) ... -35.98%
NUSI Covered Call Fund ... -31.16%
Vanguard BLV Bond Fund ... -29.10%
Vanguard VCLT Bond Fund ... -25.00%
QYLD Covered Call Fund ... -20.82%
Top 5 winners in terms of equity gained since purchase:
Exxon Mobile (XOM) ... 112.40%
Paychex Inc (PAYX) ... 58.36%
Pfizer (PFE) ... 49.63%
Simon Property (SPG) ... 49.29%
Invesco PEY Dividend Fund ... 47.42%
Current MockFolio composition (by Type and Dividend Contribution):
I see some folks are looking at Inflation rates into the near future (6 months from now). Unless the current administration employs some "trickery" with the business stats, it doesn't appear likely that Inflation will reduce by any sizeable margin in the near term IMHO. I'm 70 yo. Saw this in the late 70s into the early 80s, until the measures that Reagan put in place to reduce interest rates, and thus inflation. I guess you have to do the math: High gas. oil, natural gas prices, higher shipping costs, restrictive supply distribution, refusal to pump more Domestic Oil, the damages of COVID, and now the Ukraine attack are all markers in the wrong direction. I digressed - these are political/social/ economic issues for different Forums.
As the Inflation Numbers that came out yesterday, Slaughtering the Stock market, it looks like my comments in May were correct. This is Despite the so-called Inflation Reduction Bill - Watta a complete JOKE, fooling the general public with dropping gas prices by using US Oil Reserves. Watch the prce per barrle climb again - Saudis reducing oil production (sure, why not, the extra oil supply was reducing the price per barrel). JOEFLATION is here for a long while. You can't reduce Inflation by Spending more $$$$ by the Gov't and on the other hand tripling interest rates almost Overnight. House Building is slowing dramatically. Mortgage rates are the highest in a decade. It;s been a great 21 Months of economic destruction by this Illustriative potus.
It's BS spewing which the "high" note when biden annlounces a month ago that we had "0" % inflation in July !! That says it all.
As the Inflation Numbers that came out yesterday, Slaughtering the Stock market, it looks like my comments in May were correct. This is Despite the so-called Inflation Reduction Bill - Watta a complete JOKE, fooling the general public with dropping gas prices by using US Oil Reserves. Watch the prce per barrle climb again - Saudis reducing oil production (sure, why not, the extra oil supply was reducing the price per barrel). JOEFLATION is here for a long while. You can't reduce Inflation by Spending more $$$$ by the Gov't and on the other hand tripling interest rates almost Overnight. House Building is slowing dramatically. Mortgage rates are the highest in a decade. It;s been a great 21 Months of economic destruction by this Illustriative potus.
It's BS spewing which the "high" note when biden annlounces a month ago that we had "0" % inflation in July !! That says it all.
Hyperbole doesn't help.
What is the 30-year fixed rate today? What was it two years ago? Is that 'Triple'?
What is the average 30-year fixed mortgage rate over the past 40-years? How does that compare to today? To 2 or 4-years ago? Why were interest rate so depressed for the past decade?
What is the WSJ Prime Rate today? What was it two years ago? Four years ago? Is that 'Triple'?
What economic policies under the previous administration were deflationary? Tariffs? Strong Dollar? Tax cuts? ... which economic policies between 2016 and 2020 did NOT encourage inflation? Are these chickens coming home to roost?
Not to mention, you gleefully took advantage of the rate of inflation a couple of months ago. Not so happy now, I guess?
40 year histories are ancient history. 4 years ago you could get a 15 year fixed mortgage at 2.125% . Today about 4.875 %. So I stand corrected - they doubled+. Sorry for the exaggeration.
Hold on to your wallet when the fed raises rates next week by at least 75 basis points.
If you want history , as a mortgage loan officer / asset manager for 48 years,. Take a guess what the Prime Rate was in January 1981? 21% !!!! What caused that. Inflation driven by Energy costs (Oil Embargos, etc.) . After the Federal Govt usurped the states lending usury rates kept at 9.5% for mortgage loans despite the fact that Banks (I worked for a Savings bank in Brooklyn at that time was paying 15% for a 8 Year Time deposit) , mortgages were available after years of no lending at 19%! It took about 18 to 24 months of Reaganomics to finally drive down the interest rates.
Hyperbole ? No History. Inflation, primarily driven first by high energy costs affects Everything and all markets. The ridiculous policies of this Administration is to blame for the current economic chaos. Forty Eight years ago, outside forces controlled the Oil market (OPEC) and created the world wide Inflation through controlling Oil / gasoline. Now, in 20 months, we have Internally created and self imposed renewed Inflation wrecking the average American Household. As a retiree, at 71, on Fixed Income we [the wife and I ] are going backwards in a major Hurry.
4 years ago you could get a 15 year fixed mortgage at 2.125% . Today about 4.875 %. S ....
And what was the published Prime Rate at that time? I'll look it up for you:
Today: 5.50%
4-Years Ago: 5.25%
What evidence do have showing correlation between gas prices and CPI Inflation, and what is the R^2 of that correlation? Other than one instance 50-years ago when they coincided, I mean.
As a 'mortgage loan officer / asset manager for 48 years' you damn well know that from 2009-ish forward mortgage interest rates were artificially depressed due to quantitative easing from the mortgage crisis 'great depression' (which I can only assume based on your self-described job title, you participated in precipitating). That's why historical rates matter: because the last 10-years of mortgage interest rates have been 'manipulated' to be lower than they naturally would be in a 'free' market.
It's interesting you bring it up because I was golfing with a mortgage broker/manager yesterday and he says that you all (the industry) expect 30-year fixed rates to return to historic norms between ~4.5% - 6.0%, which in the long run would be much healthier for housing/housing starts since it will depress the 'bid it up at any cost' mentality of the past few years (which has be extraordinarily inflationary for housing).
To be clear, I am not saying inflation doesn't exist, nor that it does not slow the economy as a whole. I think we both agree on it does. I am also not saying that energy prices are not higher than they have recently been. They are.
I'm saying that I think you're inferring cause/effect on things that may or may not be correlated because your portfolio is taking a hit. I.e. Sour grapes.
That this is a 'Dividend Stocks" Thread and the only part of my personal portfolio that isn't significantly depressed is ... surprise .... Dividend Stocks.
Down less than 2% YTD compared to over 18% for the broader market, and 12.5% for my total portfolio (as of a few days ago).
FWIW , You are correct.....I'm in the Wrong Thread.
I was wrong to not really study the portfolio of dividend paying stocks that you so eloquently setforth in this thread. You are a stock Whiz Kid, who says that Dividend paying stocks have lost < 2% YTD in market value. I have "sour grapes" from AT&T, VZ, Bank Stocks, Shipping Company stocks (ZIM, GOOG) Lumen Technologies, and others that demonstrate as of today a significant loss far grteater than 2% YTD. The real winner and regrettably I didn't buy 6 or 8 months ago was Exxon Mobil. As for Your other recommendations - I will do more homework.
Your golfing buddy Mortgage banker / broker is correct about normalized single family mortgage rates at 4.5 - 6% , however, that was 15 years ago. They were considerably less than that for the past 15 years. The Prime rate is not in direct corrleation with Mortgage rates, but rather it is an indicative rate for credit going forward. As the Fed will keep raising rates into the forseeable future (like Next week), the mortgage rates shall follow in kind. Housing values will decline as thay are already doing, quickly in response to the Fed's reaction to the Inflation they Created literally overnight, because the higher than "normal" rate (whatever they say it was and will be), brings down the values. But you already know that. Like Bonds, rates go up, values go Down. But I am digressing again from the Thread. These are overall economic observations. I am not and do not proclaim to be an Economist.
As a 'mortgage loan officer / asset manager for 48 years' you damn well know that from 2009-ish forward mortgage interest rates were artificially depressed due to quantitative easing from the mortgage crisis 'great depression' (which I can only assume based on your self-described job title, you participated in precipitating). That's why historical rates matter: because the last 10-years of mortgage interest rates have been 'manipulated' to be lower than they naturally would be in a 'free' market.
FWIW... In 1999 Clinton insisted to Fannie Mae & Ginnie Mae that they should ease credit and lend people more money. Easy Money. In fact, he said in a statement "that anybody that wants a house, should be able to get a house". That action plan of easing credit for mortgage loans ignited - actually exploded the advance of easy money to deadbeat credits. Wall Street went Crazy as they usually do, creating Derivatives and Securitizations of Shit paper at high interest rates, charging the average person loan points - gouging left and right. To top it off, Insurance Companies and Rating Agencies went along for the ride on the Money Train by insuring these Pools of Mortgage loans and giving them hiogher than deserved Ratings. All Bull Shit. When the continual Mortgage Refinancings gave birth to Securitizations whereby, Ameriquest, Country Wide, New Century and other Block Buster Mortgage Banking outfits (all of whom are Ouit of Business) were then faced with tons of Mortgage Delinquencies, the Music Stopped and it all came Crashing Down. A Mortgage PONZI scheme. The bank (without naming the bank) I worked for during that period of 2002 to 2021, concentrated on making commercial mortgage loans on rental apartment houses, primarily in NYC on Rent Stabilized apartment buildings . Those loans were Rock Solid loans, not a One in delinquency!
I again have digressed and aplogize for that. Perhaps one day I will create a separate General Discussion thread to really Trade Stories of That ERA of the Clinton years forward.
FWIW , You are correct.....I'm in the Wrong Thread.
I was wrong to not really study the portfolio of dividend paying stocks that you so eloquently set forth in this thread. You are a stock Whiz Kid, who says that Dividend paying stocks have lost < 2% YTD in market value. I have "sour grapes" from AT&T, VZ, Bank Stocks, Shipping Company stocks (ZIM, GOOG) Lumen Technologies, and others that demonstrate as of today a significant loss far grteater than 2% YTD. The real winner and regrettably I didn't buy 6 or 8 months ago was Exxon Mobil. As for Your other recommendations - I will do more homework.
.....
My point is not that you are in the wrong thread, but that overall dividend stocks, which this thread is focused on, have held up better YTD than the broad market. While we all like a rising market, years of decline are inevitable and blaming this or that for the decline(s) is, at best, crying over spilt milk.
Originally Posted by Almatti
....
Your golfing buddy Mortgage banker / broker is correct about normalized single family mortgage rates at 4.5 - 6% , however, that was 15 years ago. They were considerably less than that for the past 15 years. The Prime rate is not in direct corrleation with Mortgage rates, but rather it is an indicative rate for credit going forward. As the Fed will keep raising rates into the forseeable future (like Next week), the mortgage rates shall follow in kind. Housing values will decline as thay are already doing, ....
His position is the near/mid-term future will see 30-fixed rates stabilize to their historical range of 4.5% - 6%. A return to the pre-housing collapse norm. And, yes, that will depress the bubble-like housing prices of the past couple of years, which is a good thing. Stabilization and a return to sanity as compared to speculative bubbles, cornered markets and unfettered greed (which I might guess, you have benefited from).
Originally Posted by Almatti
....
FWIW... In 1999 Clinton insisted to Fannie Mae & Ginnie Mae that they should ease credit and lend people more money. Easy Money. In fact, he said in a statement "that anybody that wants a house, should be able to get a house". That action plan of easing credit for mortgage loans ignited - actually exploded the advance of easy money to deadbeat credits. .....
All true, but again avoiding the topic at discussion and the point made in my previous posts. Specifically, because of that financial fiasco, interest rates were unnaturally depressed for much of the last decade. They were NOT normal. They were an exception. An artificially low exception.
Expecting that to continue in perpetuity is either folly or naivete. Over the 10-years 2011 - 2020 the average rate of inflation has been 1.7%. Over the past 60-years (1960- 2020) it's been 3.68%. Which of those is the anomaly?
Your market/inflation/anti-administration rant reminds me of:
At 71 yo, I am "allowed" to Rant at More Than The Cloud!. With the Economic Black Cloud we are currently experiencing now, (Look at the Futures this morning), my generation and many others now have 301K which were true 401ks just 20 months ago. Like everything else - there is now a new Norm for everything. As a Non Skilled Investor who did NOT listen to advice from other simple people who told me that I should not be in the Stock Market at more than 10-20%, I got Burned. As I watched INFLATION increase almost daily since the Spring of 2021, I sought to attain additional Income form Divi Stocks. Oh, received Divis, but lost more than 20% in Capital Value. With Inflation at 15%-20% (forget the Gov't stats which are Completely Manipulated , exlusing Vital Life commodities from the numbers since Jimmy Cartwer was President), reperesents a TAX. We all are losing $$$$$ everyday.
I sought to attain additional Income form Divi Stocks. Oh, received Divis, but lost more than 20% in Capital Value. ....
.....
They will recover. They ALWAYS recover. And if they don't the world has changed beyond the understanding of any of us.
Although I do realize that with each passing year each loss is more impactful and that we have less time to wait on the next recovery and growth cycle.
legend , I've looked into and own 2 Shipping company stocks. Both had high dividend payout rates, however, the dividend have shrunk per the last payout dates. Moreover, those stocks have lost 3-40% of market value which has far exceeded the ROR on the stocks. Information I see about all International Shipping companies indicates that shipping rates are falling dramatically hence the falling dividends and Market Value. I will carefully watch and try to evaluate whether the values have Bottom. If not, I will sell - eat my loss and look to invest those dollars into relatively short term (13 & 26 weeks) US treasuries for now. Foolishly, and more so at my age, I "jumped" in coherst by the Bear market up ticks a few months ago. I have lost over 25% on my portfolio since January ( not accounting for the agression I pursued for dividned Stocks in the past months); at this rate in this Economy heading into a disastrous WH Admin driven Recession, it will Take years to get that invested money back, never mind a positive yield. I Shoulda, Coulda, Woulda , but didn't simply go after safety investments of Treasuries , even though the yields are far behind the Inflation rates, at least, it would not have compounded the losses "enjoyed" in the stock market. I got Fooled Again (excuse The Who pun).
I will comliment the poster who alerted me to US Treasury Series I Bonds back in April. My wife and I invested the limits of $10K each - Purchased I Bonds with current Yields of 9.62% - that are based on the Inflation rates, every 6 months. There is a Buzz that the Max Limits of $10K PP may be raised to $30 K PP !.
They will recover. They ALWAYS recover. And if they don't the world has changed beyond the understanding of any of us.
Although I do realize that with each passing year each loss is more impactful and that we have less time to wait on the next recovery and growth cycle.
Bearcat, I would really like to see your opinions of stock investing directions? Per our exchange in early September, you indicated that your portfolio had a YTD loss of < 2%. I foolishly "gambled" looking for Dividend Yields and got Burned big time. Now I'm at the crossroad of Selling out , take the losses and invest in US Treasuries - for now, to park the money and stem further losses with meager yields. Do you see a upcoming Comeback? Your Thoughts are much appreciated.
I didn't Practice what I was prteaching to my sons: Don't be fooled by the Up Ticks in the market during the Roaring Bear heading right for us... I put $$$ in, fooled by the Upticks (DOW at 30K - headed up to 35K only a few months ago).
Bearcat, I would really like to see your opinions of stock investing directions? Per our exchange in early September, you indicated that your portfolio had a YTD loss of < 2%. I foolishly "gambled" looking for Dividend Yields and got Burned big time. Now I'm at the crossroad of Selling out , take the losses and invest in US Treasuries - for now, to park the money and stem further losses with meager yields. Do you see a upcoming Comeback? Your Thoughts are much appreciated.
I didn't Practice what I was prteaching to my sons: Don't be fooled by the Up Ticks in the market during the Roaring Bear heading right for us... I put $$$ in, fooled by the Upticks (DOW at 30K - headed up to 35K only a few months ago).
Betting on market direction in the short term is for experts and chumps ... and those groups are not mutually exclusive.
My post was on Sept 15th and indicated those numbers were 'from a few days ago' ... so, let's say Friday Sept 9th.
I have a combination of PEY and VYM in my portfolio and it is relatively small compared to my total portfolio (~2%). As of Sept 9th those two ETFs were down about -0.66% and -4.25% respectively. In my mix, that works out to about -2%, YTD Sept 9th.
For the broad market I usually use the S&P500, but also have shares in VXF (which is a 'full market make up' when combined with the S&P500). As of Sept 12th that Index and ETF were down -13.76% and -19.30%, respectively. My total mix at that time was down around -12.5%.
All of those are significantly lower today than they were about a month ago.
On the overall market, I take a simplistic view: Some form of an organized/regulated stock market has existed for hundreds of years. The only way the market never recovers is if that market effectively dies.
In our case that means, literally, the end of the American experiment. I don't think that is the case here. Through World Wars and Cold Wars, Great Recessions and Great Depressions, our country, and our markets, have grown in the long term.
The S&P500 was fully constituted with 500 companies in 1957. The underlying index dates back to the 1920's. Since 1957:
- There have been 15 down years and 51 up years .... 77% up years;
- The 90th percentile CAGR is:
9.96% Return for any consecutive 30-year period 1957-2022
7.05% Return for any consecutive 20-year period 1957-2022
3.32% Return for any consecutive 10-year period 1957-2022
-0.15% Return for any consecutive 5-year period 1957-2022
Conclusion: Investing in the broad market for the long-term is 90% likely to trend to the overall market average annual rate of return (around 11%).
- S&P500 years to full recovery 1957-2022 ...
If the S&P500 is down for 1 consecutive year, it takes, on average, 1.96 years to fully recover. This has occurred 9-times since 1957 (not including 2022 because we can't include the recovery time).
If the S&P500 is down for 2 consecutive years, it takes, on average, 2 years to fully recover. This has occurred 1-time since 1957.
If the S&P500 is down for 3 consecutive years, it takes, on average, 4 years to fully recover. This has occurred 1-time since 1957.
The S&P500, since 1957, has never been down for 4-consecutive years.
Conclusion: The S&P500 always recovers and it takes about 1-year per year of decline.
Basically, ride it out or believe that the American experiment is dead ('no one gets hurt on the roller coaster unless they jump out').
Personally, I've been buying just as aggressively, if not moreso, through all of 2022 as I did in 2021 .... dollar cost averaging is a thing.
^ Same. Buying now is like buying on sale. The market will come back and will likely come back fast when the fed stops raising rates. That will be seen as a sign that things are getting better and the rallies will start.
Investing for the quick gain is stupid and a futile attempt. There was some experiment done many years ago where they pitted a pro trader against a cat for stock picks and the cat won. Play the long game and you can't lose.
You have to remember that my age is 71. Timing the market is a Gambler's game for sure. Like Las Vegas , Craps You Lose! But w/o metaphors, being on fixed income, with Inflation, and a quickly receding Stock market, it becomes very Scary to watch how fast I am going Backwards. I will take a serious look at Bearcat's advice. But Comebacks are for the younger people. I need the NOW. I thought I was doing the right thing chasing some good paying dividend stocks, but yeah, I got some Divis, but the market values Far Outweigh the Divi returns, eroding that into the basement.
As I stated... I didn't Practice what I preached. When the Bear market Blipped upward to recover to an appx DOW from 30K to 35K, I Shoulda, Coulda, Woulda, got out of the market. As the general Media likes to say. "Your 401K is now 201K - Don't look at your statements".
Please appreciate the positions of the Senior Citizens (like me), seeking not wealth, but some sense of stability. Most people who are not retired as Social Security recepients and some penson money (which is fixed until death), will receive an Increase of the announced COLA based on the CPI, that's coming out today, estimated at about 8.7% - the highest in 40 Years!! Wow, but he that giveth, taketh Away. Medicare premiums go UP, Supplemetal heath ins. goes UP, Dental Ins. Goes UP, etc. The increases far out weighs the SS increases. It's a BS notice to the public to say....You will receive a $144 increase in your average SS check monthly, a tactic being used to show : Look what the POTUS is doing for the elderly! Farcical.
I'm Rambling, because it is Scary. I have been through these markets before, but I was working and moved with the Flow, recovered over the years. This is different for the 68 Million on SS.
At the age of 71, your portfolio should be mostly in bonds and not stocks...probably not a great time to make that transition since you'd be selling at a low point to switch but consider doing that when the market goes back up.
Sam Doe1, You are right, I really should be in Bonds for most of my portfolio. I did pursue some higher Divi stocks, seeking some current income but got Burnt. Volatility is making me lose sleep. You cited a "at Experiment" - I remember way back when, the WSJ used to a Qtrly analysis of Dart Board Throwers vs. the Experts. Many times the Dart Board throwers' stocks beat the experts. They have Stopped doing that for apparent reasons.
Now, I face the prospect of timing my Move: Sell off the stocks I have (there will be losses) and invest in US Treasuries (13 & 26 Week Bills). Other advice in this direction is welcomed. I will be doing much more homework about my existing 401K sitting with my former Employer's Manager - 80% in MMA and 20% in my former employer's stock which pays a decent Divi BUT fluctuating market values. Hitting 72 Next year will require transferring out $$$$$ per the Tax laws. Self Directed ROTH IRA? Appreciate obtaining reliable source info. I don't have a financial Planner.
Are you stable enough that you don't need to sell off stocks? If you're not in need of selling right now then don't. The markets will recover and go up, sell at that point.
Samdoe, Yes, I was stable enough to wait for some recovery. Lumen Technologies, one of my choices, has done terribly the past months. And i don't know why? They landed more contracts for technology installs in variuos states, yet, the market doesn't like them or it is being sold short!! Keeps bouncing around $5.50 +/- , purchased in the $8 price with a $1 Annual Divi. per share. I don't see a sunny horizon. At what point shoud i bite the Bullet - sell and reinvest in either new 13 or 26 week Treasury Bills or anotjher better performing Divi Stock ?
Preferred stock shares are issued with a guarantee of a dividend payment, so if a company fails to issue those payments as promised, the total amount owed to the investors is recorded on its balance sheet as dividends in arrears. If a company has dividends in arrears, it usually means it has failed to generate enough cash to pay the dividends it owes preferred shareholders.
Appears to be special dividend events from above ^ and the history you posted.
Thanks for posting the dividend history as I should have looked it up before posting what I did.
Appears to be special dividend events from above ^ and the history you posted.
Thanks for posting the dividend history as I should have looked it up before posting what I did.
At first I wasn't sure. Since the normal dividends said 'US Currency', I thought it might be implying that the special dividend was being paid in some other way, as additional stock shares, for example.
ThX Folks, some good Food for Thought and Consideration. RWAY is very interesting. KHC (Heinz) appears a solid Divi stock too with a moderate Divi return around 3.7% and solid steady growth in capital value. As I posted some months ago, at my age, I'm looking to limit market value losses, adding solid Divi Income Stocks to combine with Series I Bonds (which are limited to $10K per year for each of us) and I have been buying T- Bills 13-17-26 weeks, laddering best I can for the decdent State Tax Free returns. But with the major legislation of Debt Ceilings in Congress and the current WH Admin, - it leaves me a bit fearful for future Interest payments.
ThX Folks, some good Food for Thought and Consideration. RWAY is very interesting. KHC (Heinz) appears a solid Divi stock too with a moderate Divi return around 3.7% and solid steady growth in capital value. As I posted some months ago, at my age, I'm looking to limit market value losses, adding solid Divi Income Stocks to combine with Series I Bonds (which are limited to $10K per year for each of us) and I have been buying T- Bills 13-17-26 weeks, laddering best I can for the decdent State Tax Free returns. But with the major legislation of Debt Ceilings in Congress and the current WH Admin, - it leaves me a bit fearful for future Interest payments.
From the 'dividend mock-folio' I've been tracking, here are 1 ETF Fund and 8 Stocks that, from 7/13/2020, meet the following criteria:
- Current forward dividend yield > 3.5%;
- Equity price up since 7/13/2020
- Equity price up YTD 2023.
Based on what you've posted in the past, I'd be very leery of investing in a small number of dividend stocks, regardless of recent performance, or 'blue chip' status. IMHO, you'd be better off with some kind of index mix ... PEY + VYM, for example. Much broader, more diverse exposure at reasonable dividend returns. PEY is a little pricey at around 0.55% fees, but VYM is very affordable with fees below 0.10% ... or something similar ... SPYD, SCHD, DGRO, VOOV, SPHD, etc.
THX BearCat94. I'll look into this stock. Took your earlier advice, Bought RWAY. First 500 Shares, then another 1000 the other day. Divi look pretty good. X-Divi date is 3/6. My personal problem sometimes is stay too Married to some stocks for the Divis, at the expense of Capital Price roller coasters. At my stage of the game, I have been buying more T -Bills and probably will buy another $10K for my wife and I (Total $20K) in the 2023 year. Decent 6.92% Interest (Inflation based rate) for the next 6 months. But that's for $$$$$ that Hopefully isn't needed for 5 years. The rules of that game is you cannot cash them in year 1, thereafter years 2-5, cashing them costs you the last 3 months Interest. But like all Treasuries - Thay are State and City Tax Free. In NY that's 11-12% (without NYC taxes - which I don't pay). Since we have 5 Grandkids (2 very nearby, the other 3 a 130 mile trek) close by, it Keeps us from moving to Florida, like the last 400,000+ New Yorkers in the past 26 months! That's not counting the many others from CT & NJ.
04-18-2022, 09:31 AM
I confirmed it 20 days ago.
.... Dividend Stocks.
