Trying to find the balance between being the person my dog thinks I am and the people our parents warned us about.
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I'll be standing in line behind you.
From the pros: The following is a press release from Fitch Ratings:
https://www.reuters.com/article/fitch-affirms-rite-aid-corporation-at-b/fitch-affirms-rite-aid-corporation-at-b-outlook-stable-idUSFit3Xj6rv
Fairly lengthy
Not sure, but don't think it will go that low. Five years ago it hit about $1 for a low. But then, with the sale of stores and the alleviation of over $4B in debt, the situation was not as bad as it used to be. Also, due to the rulings in NY, they are keeping some of their better performing stores. Granted, there is still a lot of room for improvement. Another take https://finance.yahoo.com/news/2-zombie-stocks-coming-back-143100700.html
I'll take some zombie stocks in my bag. Happy Halloween.
Doing well as expected. We dodged the frost. Closing in on one year of retirement. Can't believe that went so fast! I also need to get the bikes out and get more active. Too much time behind the computer.
No frost in our yard. Threat gone for the next two weeks or so. Time to get rest of veggies out of garden and get the greenhouse ready. Then off to Orlando for the AAII national meeting (should be interesting as I'm a first timer) and then to upstate NY mid-November for a week. Still dealing with wife's mom's health issues and sorting things out. Maybe I can bring home some Utica Club. LOL!
Hola bankanistas! Up for air. Been a busy last month. I should go back to work - have more time to post! LOL! Hope everyone is doing well and enjoying Fall. Today's agenda is to get sensitive plants indoors on the possibility of a little frost about 6-7 a.m. tomorrow morning.
Thanks Tardis. What I seemed to recall. Just crunch time this week, so didn't have time to re-research it. Just finished a stats exam at midnight (why does an old guy do this to himself?); currently uploading files to send to a patent attorney on another project as I type; and giving a workshop at 2:30. Happy hour at 5!
Have a great weekend.
P.C. run amok again.
She probably read the following recent article on some "research" conducted earlier in the year. http://www.slj.com/2017/09/industry-news/cat-hat-racist-read-across-america-shifts-away-dr-seuss-toward-diverse-books/#_
So, Ms. Soeiro is "a librarian with a graduate degree in library science." She is not alone. Any credible library is run by someone with an MLS or MLIS degree; it's generally a requirement for schools and colleges. They are also employed by large corporations and law firms. Nice pic of her, too, in a Dr. Seuss hat.
G/M fung. No, not on Hawaii time, but had been up until 5:30 a.m. working on a take-home stats exam. Why do I do this to myself at this age?
But yes on the irrevocability of the charitable trusts. All charitable life income gifts are designed to be irrevocable (CGAs, CLUTs, CLATs, NIMCRUTs, flip trusts, Pooled Income Funds (PIFs)) - that's why the income tax deduction is allowed.
Thanks for the conversation on the topic as I'm rewriting some of my materials for a workshop on Introduction to Planned Giving for Small Nonprofits that I will be conducting at the end of the month for some of our local nonprofits. Gets me thinking early about it.
Maybe some of our fellow iHubbers will now know what to do with their RAD million$ to shelter their gains from taxes and do good in their communities
I don't think this is an overnight double-bagger. I expect this to slowly rise to the $2.50-$3 range over the next couple of months as the dust settle on the current deal.
I can't remember if there are any restrictions on RAD under the current deal as to whether it can put itself up for sale until all of the stores are transferred to WBA. Anyone know? Then we are looking at early 2018 for any significant upward movement.
JMO - been wrong on things before - other stocks, choice of college majors, some women, last job, etc.
Where am I not correct? Be more specific. I put a lot of info out there.
Depending on the investment inside the CRT, the payout is either taxable (if funded with stocks, mutual funds, biz income, rental income, royalties, other taxable investments) or non-taxable (if funded with tax-free munis or other tax-free govt bonds for example).
If you try to fund a CRT with taxable appreciated assets and reinvest them with tax-free income assets, you still get the charitable tax deduction on the donation, but the IRS will recharacterize the munis as taxable assets and your income stream is taxable. Pesky IRS! If you could do that every charity in the US would be hawking them and the every tax-free municipality would be issuing debt right and left.
You can buy an annuity in a CRT but there is no advantage as both are tax-deferred instruments. Like putting an annuity in an IRA. Also, you are now paying an unnecessary layer of fees on the annuity in addition to the annual cost of running the CRT.
There are two main types of CRTs - charitable remainder annuity trusts (CRATs) and charitable remainder unitrusts (CRUTs). For practical purposes CRATs produce the same results as charitable gift annuities (CGAs) - steady fixed income with a charitable tax deduction. CGAs are better for the recipient in the sense that some of the payment is treated as return of principal and not taxed, where as all income from the CRAT is taxed. CRATs are better for charitable institutions that do not meet the requirements to be licensed to issue CGAs - each state regulates them differently via their Dept of Insurance. CRATs and CRUTs are regulated by the IRS. For example, in NY (unless it has changed since I was there) you cannot fund a CGA with real estate. In Florida you can. I would run into that problem with high net worth very elderly snowbirds who attended a winter CGA program in Florida and came back to NY wanting to set one up with our organization. I'd have to tell them no can do and they would get very upset and insist that they could do, not understanding the different state regs. One of the problems of dealing with elderly people is that they get fixated on a wrong idea and don't let go. Difference between them and terriers - the terrier eventually gives up.
Then I moved to Florida to set up another program and got the full experience of some very slimey, scammy financial professionals, not that NY doesn't have any.
Back to CRUTs. You could fund one with tax-deferred retirement plan assets such as an annuity. Since the money in the annuity is already tax deferred (but eventually taxable), there is no charitable deduction, and, because of the IRS rules on converting taxable assets into non-taxable income producing assets, the payments are not tax-free.
The best bet for my situation is to do ROTH conversions by doing a tax-free trustee-to-trustee rollover from my 403b to my rollover IRA, then on a year-by-year schedule, convert a portion of the regular rollover IRA into a ROTH IRA trying to stay in the lower tax brackets, paying a one-time tax. Now let the ROTH grow and take future tax-free distributions as needed.
Thanks. I've looked at those (built two planned giving programs from scratch in the 1990s). Between CRUTs and CRATs they have some of the same issues as variable vs. fixed annuities. CRTs can also go broke thru mismanagement, whereas an annuity generally will only go broke if the issuer goes bankrupt. Since the vast bulk of our net worth is in employer sponsored plans, it makes little or no sense to fund a CRT with pre-taxed retirement funds. I would have to get consistently high returns in a net-income CRUT (also net of trust expenses) to make it superior to a high paying annuity and returns in a CRUT are not guaranteed. No responsible charity is offering CRUTs higher than 6%, maybe higher with a short life expectancy, if they manage it. If I manage the CRUT I have to pay all of the costs myself, and it is a net income CRUT there are potential IRS issues with self-dealing. I can get 6% from a TIAA annuity at low-cost.
That's the other part of the equation in financial planning - everyone's finances/asset base are structured differently. If I had a lot of highly appreciated assets with a low basis, a CRT would be an excellent solution.
Thanks, but no kids, no grandkids so the generation skipping isn't a factor. Sounds like they probably have a proprietary algorithm for determining the distribution schedule and obtained a business methods patent.
Yes, most employer provided 403b (at least in the no-profit world) plans I have seen have very limited choices. That is the key difference - the amount and variety of options.
You commented about reading the prospectus. Here is an example of the TIAA Death Benefit:
Amount of death benefit
If you die during the accumulation period, the death benefit is the amount of your accumulation. If you and your annuity partner die during the annuity period while payments are still due under a fixed-period annuity or for the remainder of a guaranteed period, the death benefit is the value of the remaining guaranteed payments. About as simple as it gets. CGAs offer no death benefits; the remainder of the corpus goes to the charity that issued it.
One of our other plans is thru VALIC. Theirs is a bit better because if the employee dies during the accumulation period it is the greater of the accumulation or sum of contributions. That at least gives some added protection in periods of severe market downturns. That clause hit home during 2000-2002 when my wife's plan value went about 30% below the contributions up to that time.
But there is a trade-off. This is all pretax money so I can convert it into an annuity, skip capital gains and just pay tax on the income stream. If I did a total withdrawal, I would have a taxable event with the feds and my state taking approx. 45.3% off the top at the marginal tax rate and only 54.6 cents on the dollar to buy a commercial annuity.
I'll reinvestigate the options in VALIC and Lincoln Financial as I could do a rollover, but I recall their guaranteed rates being lower and the expense ratios of the undelying investment choices being higher.
Well, fungderf, at least we can agree on that one. IMO, if AMZN would pick up any of RAD, it would be just EnvisionX, but there are other stand-alone PBMs not currently affiliated with a pharmacy that could be targets. Due to their success, it would not surprise me to see AMZN pick up a logistics/shipping carrier.
Let me restate that as I appear to have written that poorly by trying to be too concise and as a result you may not be getting what I am trying to say.
The variable annuities I have currently are in an employer sponsored 403b plans currently in the accumulation stage and the underlying assets include mutual funds that vary in value. I have not triggered the payments yet - i.e., they have not been annuitized. I currently have the option to rollover all of these funds into any of the others or an IRA. Annuitization will happen in 2019 or 2020 for one of them (TIAA). If I keep the variable asset after annuitization, my periodic payout could vary depending on the market performance of the asset.
Additionally, your annuity apparently has different options than what may be available to me. So we are talking about two different annuities here. It looks like yours are commercial annuities that you bought with after tax money. Mine are in pre-tax accounts, so they are structured differently due to the tax implications.
We could go a third route which is a charitable gift annuity (CGA) which is a very simple annuity. None of which the terms you enumerate for your annuities would apply to a CGA.
I think we are talking about two different things here: fixed annuity vs variable annuity... and, maybe splitting some hairs. I think you mean guaranteed rate of return, not growth. Issuers have no control over the market to guarantee growth, but they can guarantee a minimum return to the buyer based on how they invest the premium and whether there is a re-insurance aspect to the contract (which adds to the expense charges).
With a fixed annuity you get a guaranteed rate of return on the underlying asset, usually cash or cash-equivalent one-time premium payment for the annuity, the rate being guaranteed by the issuer. Most often the payment is fixed (stays the same) and determined by a number of factors such as lifetime or a guaranteed number of years, and if yes to that, the number of years, usually 10, 15, or 20; or life certain plus 10, 15, or 20. That periodic payment will lose ground to inflation, although some do offer a CPI adjustment, however that lowers the initial amount of payment.
With a variable annuity (with same term of years as above), you get a choice between a fixed payout vs a variable payout. You can get a fixed rate of payout (percentage), but the dollar amount of that payout will vary depending on the underlying asset/fund you chose to invest it in. You do get at least a reduced guaranteed periodic payout. If the underlying asset goes up in the market, you get more money.
You can also mix the two, with a fixed payout component and a variable component.
As for the guaranteed rates that varies from company to company and may depend on when the money was invested - older money gets higher rates. I doubt you would get a minimum of 5% on money invested now at most reputable firms. For example, the TIAA CREF fixed rates portion, which I am considering:
TIAA Traditional Payout Interest Rates: Guaranteed Earnings Plus Additional Amounts*
Period During Which Funds Were Applied Rates for TIAA Traditional
2014-2016 vintages 3.25%
2012-2013 vintages 3.50%
2000-2011 vintages 4.75%
Pre-2000 vintages 6.75%
@Jablome - simple answer: Fed regs do not allow short selling in 401k/403b/457 accounts. That is because the use of margin is prohibited.
Tardis, that's because we started discussing RAD bonds
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=135042672
But variable annuities, like I currently have, but have not triggered yet for income may see income go up or down depending on the markets and investments - hence the term variable. That said, any annuity should not be more than 20-25% of one's portfolio. And it should be the last leg of fixed income to cover the gap between needed household income (incl tax liability) minus any pension(s), spouse 1 soc sec, spouse 2 soc sec, and any other regular income stream (e..g, royalties, net rental income).
I would agree. Our exposure to bonds is only in any mixed asset or balanced funds we hold.
I also advocate annuities as part of the mix, although some advisors are down on them. Inflation -indexed ones are hard to find as most are just a constant amount, which inflation will kill. If that's your beer money you go from drinking a good import or craft beer to PBR in 20 years.
I see I missed much of today's conversation on bonds as I was out for weekly chiropractor and running errands only to return home to find printer acting up.
Offhand, I didn't know whether RAD has any bonds so I had to look it up. Found this article for starters from January https://seekingalpha.com/article/4037134-better-way-profit-walgreens-boots-alliance-rite-aid-deal and a list https://www.macroaxis.com/invest/bond/RAD
I suspect that RAD, as it reduces debt, will retire the highest debt bonds first. They are also close to maturity.
I've never been big on bonds personally and do not hold any outside of what may be in any mutual funds we hold. Each year I keep thinking the bond market will implode soon and it doesn't. So part of my continuing education is to get a better understanding of macroeconomics and future trends. AI, while a bit over-hyped, when combined with robotics is going to be the next big disruptor. We already see this in many factories, but more is on the way. I was reading an article in Bloomberg BusinessWeek (or maybe Time) about a Chinese company that is setting up in Arkansas and will be able to produce t-shirts for about 33 cents a piece. Increased tech will keep inflation low for many years to come and that will also have some consequences on fixed income.
I was in my late-20s when I bought my first stock about 1983 or so. Moved away and changed careers and did not get back into the market until about 1989 or so. During the early '90s I got more serious about finances as I had a couple of jobs with nonprofits in planned giving (charitable estate planning). After learning as much as I could from popular press books, I went to take the CFP courses.
Also wanted to avoid the financial mistakes mistakes my dad made - he also grew up during the Depression. He took the safe route, went into the US Army Air Corps in Jan 1941 almost a year before the US got into WWII. Stayed 31 years before retiring with just a pension. He never owned any securities. He went to work for a large private company and was in their profit sharing plan. He did try and lost money on some Florida real estate my folks bought in the 1950s. Unfortunately, he passed from cancer in 1975, greatly under-insured with me in college, my brother in high school and my mom with no post-secondary ed and little more financial knowledge than a check book and passbook savings leaving her with a mortgage. Being an immigrant who grew up in Nazi Germany, mom was also very distrustful of the government and financial institutions and never learned to invest. Had a heck of a time convincing her to fill out paperwork so my brother could get financial aid for college.
My brother is now repeating my dad's mistakes of not planning for the future. I tried to show him, but he got scared when a couple of stocks took losses. He is very risk averse. But, he has no kids and never got married, so putters thru life working retail and figuring he'll work until he dies. I think he was a bit shocked, certainly surprised, when I retired early last year. We also have no kids, but if I keel over tomorrow, wife will be OK. In addition to not having a financial plan most couples also do not have any immediate plan of action when one spouse dies. I've written up a to do list and suggested budget for her to get started in case I croak.
Back to your comment on fixed income being ignored, there is a place for it in every portfolio, just that it has to be tailored to one's own situation through their own financial plan. Ditto annuities.
Well, time to get outside and do some work I have been putting off! Make myself useful.
Yep - buy high and sell low. I had also read an article with a similar conclusion with the Average Schmoe at 2%+, also just below 3 mo. T-bills. I think the link I posted was research on mutual funds only.
As someone who has just transitioned from work to retirement, our serious money was and still is in mutual funds in past employer plans. Sectors are info tech, healthcare, biotech, & a REIT for growth and a mixed of fixed and guaranteed as a hedge for market downturns. I have a bucket of 5+ years worth of expenses in low/slow growth to ride out any recessions, especially important as a new retiree. While only 50% equities, our portfolio is at 12.95% for the year vs 12.53% for the S&P. Only about 2% of the portfolio is in "speculative" plays for turnarounds (a little "RAD" money") and under-book or under-valued plays (e.g., FSWA, DB & AMD). Been writing covered calls on the latter two, so ahead of the game there, too.
The "advisor" I was assigned by TIAA-CREF wants us to put the whole enchilada in with his company and gave us a suggested asset allocation that I have calculated would give us 7.81% not including management fees which would make it less. I have been tracking our performance for 22+ years, so it was easy to go recalculate our performance against the measures in that article and we are at 8.21% average annual returns for 1996-2015. OK with that. I tossed the back at him in February - have not heard back from him since. But, the average Schmoe needs him, however, they often do not have enough accumulated to capture his attention.
What is often misleading about some of those articles that focus on 100% investment in equities, is that is not a one-size fits all, depending on where you are at in life. Might be fine when you are young and at the accumulation stage of retirement funds, but not as fine when you are in your 50's. You need to start balancing with fixed and guaranteed. Then when you retire, you also have to factor in periodic withdrawals.
I like running scenarios and calculations. I set up a spread sheet with all funds invested in the S&P, making the withdrawals we need (also factoring in wife's small pension and Soc Sec for us later) and used the past performance of the market for 35 years, but setting up worst case scenario = starting the 35 year cycle with the worst 10-year cycle. Fund goes bust in 13 years. With a 50/50 portfolio such as SPY and VBMFX, we die before the money runs out.
Best investment I ever made was not in the stock market - it was going back to school and taking all the CFP courses to get my cert in financial planning.
I am amazed at the financial illiteracy in this country. Just googling "retirement crisis" and reading is like an financial equivalent of a Stephen King novel. The outlook is not good.
I'll have to remember that "I'd call those six-foot-under-baggers"
Looks like iHub "investors" are not your average investor (here's how the average DIYer did - https://www.fool.com/investing/general/2015/11/01/the-average-americans-investment-returns-and-how-y.aspx) and from your assessment they are also not from Lake Wobegon.
That was a funny conversation string.
Thanks. That I already know. RAD is a calculated risk, with emphasis on "risk". My current paper loss on RAD is minuscule and within the daily fluctuation of my overall portfolio. Just lookin' for leads.
It wouldn't necessarily be OT if RAD were mentioned in your post, such as "for those of you seeking to offset perhaps temporary paper losses in RAD, you might want to consider..." I would be interested. Also, since you have now at least two requests might not be OT. TIA.
Very interesting indeed.
Close, but no cigar. Anyone read about any whisper numbers?
Thanks for the post. Can you provide the URL for the article for future reference? Thanks in advance.
OK. I'll open my mouth. I'm in DB for a long-term play. Published opinions on DB are all over the board, Short-story, I think it recovers but will be a long slog. Pretty much concur with the following - https://seekingalpha.com/article/4108570-bloomberg-headline-deutsche-bank-really-beyond-repair?app=1&auth_param=9j715:1cs7pbu:7e831550e293227d86f40babd9287f0b&uprof=45
So, anyone expecting an overnight gain should look elsewhere. DB sells way below its book value of $40.23 per share. It has paid up most of its lingering fines (if not all) from the 2008 financial crisis in relation to housing loans and bubble. There is still potential trouble in getting sucked into Trumps loans, Russia, etc. DB's past problem was they wanted to be seen as a big boy and as a result cut many corners (some questionably). That will eventually go away if they learned any thing from how they mishandled working with regulators and just cooperate with new investigators. They need to get a little more conservative on some of their deals as they do not appear to be discerning as American when it comes to crossing the line between highly unethical and illegal, and when they cross the line they are not as good as liars as the Russians.
They are still a large bank and will continue, but slowly. To fail would be a national embarrassment and I doubt that Frau Merkel will let them fail. I expect them to benefit some from Brexit in addition to the factors cited in the article. Currently down $4880 in paper losses with an average of $18.33/sh spread over 3000 shares. But have filled part of that gap over the summer from one flip for $1565 in realized gains and $1580 in premiums from writing covered calls, so I can live with what I see as a temporary shortfall . Shares are spread across 3 accounts including an IRA and a ROTH IRA, so I have both the time and incentive to ride this one.
Purely a guess, but perhaps back-office, transition and supply-chain tasks among others.
My AMD got a boost just before the bell today. RAD could use something like that.
I agree on the PBM but not the B&M stores. Sort of defeats the whole model that Amazon pioneered. But you are right that it might be wise to run against the herd.
Good find. I'm still not 100% convinced that AMZN will make a bid for what's left of RAD. All they need is the PBM angle, not the stores. If you look at the pro-forma map of what is left of RAD after the WBA deal (http://www.cpbj.com/article/20170629/CPBJ01/170629773/new-walgreensrite-aid-deal-what-you-need-to-know, also modify that since the NY stores were taken out of the mix) and compare it to a map of existing AMZN fullfillment centers (scroll half-way down http://www.mwpvl.com/html/amazon_com.html) there is considerable overlap, especially in the east. A PBM company would offer all the benefits of online pharmacy and no need for the stores.
Set that aside for a minute and look at the Whole Foods deal. What was the real value to AMZN? IMO it was not the stores in and of themselves as consumer destinations. I see two major advantages. First was WF supply chain and vendors to give AMZN a boost getting into this market with product. Second, more importantly was that each location provides frozen and refrigerated storage, thus functioning as a cold goods distribution center. If you compare the WF location of stores (http://www.starcraftvanilla.com/whole-foods-locations-map.html) with AMZN distribution network it fill in a lot of gaps in the mid-country besides providing cold storage across a nationwide footprint. Blue Apron, Hello Fresh and all the other home delivery fresh food companies have no where near this reach. If you ever tried one of these services they come via UPS/FedEx/DHL and land on your doorstep. Hopefully you are not away where this gets stolen off your steps overnight or defrosts/go bad. We were dog sitting for neighbors who get Blue Apron and they said help ourselves to the weekly delivery as they were gone over a week.
So, back to delivery. The acquisition of Whole Foods got these goods a lot closer for AMZN to deliver to consumers, but just with mail, fibre optic, etc., there is the "last mile" problem. Forget drones (that's a pipe dream with the pipes stuffed with the latest cannabis stock scams). I would not be surprised to see AMZN make a try at a logistics company - think FedEx, DHL, UPS for starters. Now you order your foo-foo organics on Amazon Prime, it gets packed at the closest Whole Foods and FedEx'd to your doorstep.
Yes, AMZN could also repurpose RAD stores with more refrigeration, etc., but probably not on the scale that it would need. If AMZN wanted small footprint customer pick-up facilities that has a good network of stores into the smaller communities and rural areas, then they should buy something like Dollar General, which also has cold storage, smaller store size and nearly a nationwide footprint. But at $21+ billion market cap, that would be tough to digest.
And I could be totally wrong about RAD. Wouldn't be the first time. Still trying to figure out why I married my first wife in 1989...
Motley Fool's take on RAD = value play
https://www.fool.com/investing/2017/09/20/should-you-buy-rite-aid-stock-now-that-the-walgree.aspx?yptr=yahoo
Toast? No. Pinot Noir! Yes!
Crazy day? Ha! I'm off to the liquor store...