Suggestions for invest 90% of 1.4 mil in prefer stock to live off..I'm 36 yrs old and can't work anymore?
Answers: In order to properly answer this question I need some information on the amount of income you require and other sources of income such as SS disability etc. The reason is that it is not too good an idea to invest it all into preferred stock because preferred can not keep up with inflation. You need to make a portion of your investments so that inflation will not eat you alive in 10 years.
Getting down to brass tacks. Let us assume that we can generate 7% annual return on preferred. 7% of 1.26 mil is 88,200. You most likely do not require that much currently for living expenses. And what of your other sources of income? Lets say 44,100 current needed income. That will allow 50% for income and 50% for keeping up with inflation. A reasonable mix.
Now some of the better dividend plays are actually not preferreds but limited partnerships, although they are fully taxable whereas some preferreds are not.
One that comes to mind is XTEX. It currently yields 7.5% and has a history of raising the dividend annually. It is a limited partnership pipeline company serving the gas fields of Texas.
Some common stocks with dividends that are tax advantaged are bank stocks. Quite a few are currently paying around 6%. Included in these are BAC at 6.7% and BBT at 6.7% also. USB at 5.6% BAC is somewhat speculative since they said they would buy Countrywide, but the other two are not. BAC is well on the way to becoming the largest bank in the country if the Countrywide thing works out ok.
There are mutual funds that invest in preferred stocks. That is a decent way to have a diversified portfolio.
FPI is one that I know of. Its current distribution rate is 10.4% but I need to warn you that it lost 15% of its net asset value last year. Some of its holdings are a tad risky such as IndyMac preferred. The mortgage mess has effected this fund adversly.
HPI is another. Its current distribution rate is 8.7%. It lost 11% in net asset value last year again because of the mortgage crisis.
PSY is another. Distribution rate 8%. It lost 12% in net assets valaue last year.
These last two pay dividends monthly which for cash flow purposes could prove handy.
There a couple of draw backs to investing in a mutual fund as opposed directly in the preferred stocks. One is the management fee you will pay. The second is that the portfolio is not a constant and the yield may very well change perhaps for the worse.
Here are some preferred for your consideration.
ABN/PF current price 22.75 dividend 1.5625 yield 6.87% A1 rated and dividend taxed at preferred rate.
AEV current price 24.66 dividend 1.71875 yield 6.97% A3 rated and dividend taxed at preferred rate.
AEF current price 24.51 dividend 1.8125 yield 7.394% A3 rated and dividend taxed at preferred rate.
AXS/PA current price 24.16 dividend 1.8125 yield 7.5% BBB- rated just barely investment grade and dividend taxed at preferred rate.
The 50% not invested in preferred could be invested in relatively safe mutual funds. ha ha. They are certainly safer today than they were 6 months ago.
PRWCX comes to mind. 10 year annual return is 11%. That compares favorably with the preferreds and keeps up with inflation.
here is the link to it
http://mutualfunds.troweprice.com/?rfpgi...
Another is VHGEX. 10 year annual return is 12.84%.
here is the link to it
https://personal.vanguard.com/us/funds/s...
Everyone can learn to trade online from home. If you can click a mouse, then you can work and play and likely be able to earn at the same time.
Investment and free training in the Forex business
http://iqmoney.blogspot.com/
OMG, please stay away from these blog speculators.
You need to get professional financial and tax advice from a trusted advisor. I would not engage in "learning on-line trading," or following hype from "I quadrupled my money (once, maybe in penny stocks).. blah blah blah."
-- See my bio. 19 years in the investment business.
Things to look at and consider:
1. Get a seasoned advisor with 10 yrs or more experience.
2. Max out ROTH IRA each year.
3. Look at Annuities
4. US Treasury Bills or Bonds, Inflation protected US Gov bonds = safe money. "Ladder Treasuries"
5. You still need to look at long term growth cause income investment will not normally keep up with inflation. Some funds need to allocate for retirement. Look at dollar Cost Averaging - S&P500 (SPY), NASDAQ 100 (QQQQ).
6. Set up an estate plan. See an estate attorney.
Why I don't like bond funds:
1. No maturity dates.
2. Can be leveraged.
3. You don't own the bonds. You own shares in a fund that owns the bonds.
4. No control over capital gains.
5. If buy insured bonds, find out who is insuring the bonds. The major bond insurers are 1 step from bankruptcy if they loose their AAA credit rating.
Current Problem Bond Insurers (esp watch out for bond insurers who have large guarantees insuring real estate mortgages = would avoid)
Symbols: ABK, RDN, PMI, MTG (avoid)
Be careful. Get professional help. Don't rely solely on internet posts for advice.
See my prev posts
http://answers.yahoo.com/question/index?...
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My post history
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Disclaimer: News and data herein are derived from sources believed to be reliable. Their accuracy or completeness is not guaranteed. The information herein is not intended to be investment advice, and is for reference purposes only. Always seek the appropriate professional adviser when making financial, legal and or tax related decisions.
Better put your money in Belarusian bank.
You will get a 13% rate of interest with NO RISK AT ALL because all deposits are state insured.
For more details please email me at bestinvest(a)land.ru (with your nickname at runeye.com)
Good luck!
Stocks surrounded by Gold and Copper Mines... and Chinas influence!!?
Hi All,I'm a beginner contained by the stock market and i hold about 10k that i want to invest... but defensibly I’m a little anxious on what stocks to be buying.
I'm looking at Gold and Copper mines due to the strengths of both of them despite the lows surrounded by the Australian stock market and contained by face of a possible recession surrounded by the States... but I’m not sure of the effects of Chinas influence on the price of gold and copper.
Could anyone shed flimsy on this topic... or give counsel to a beginner that is to say trying to learn as much as possible.
Thank surrounded by advance
Answers: In my estimation, China is becoming an increasingly larger consumer of all kind of things, including gold and copper. I would expect that extra constraint to keep the prices difficult than they would be without that emergency (unless of course the supply increases by more than the constraint, which I doubt will happen).
However, I personally would NOT be investing within anything related to gold, copper, or other commodities right in a minute. The prices have risen dramatically within recent months. While they could still go greater, I suspect we're closer to a top than a bottom in commodity prices. Remember the bubble within tech stocks a few years back? Prices be high and rising and everyone needed in. Then the bottom fell out and the citizens that bought high lost deeply of money. Remember the bubble in home prices simply a couple years ago? Same story.
The last time gold ingots was setting dictation highs be in the precipitate 1980s. Same story as the other bubbles. Not long after, gold started a long downtrend and merely got fund to the early '80s prices just this minute - after 27 years! Historically, over the long-term, gold and gold ingots mining stocks have not be particularly biddable performers.
If I be just starting and have $10k, I personally would put it into a mutual fund that tracks a most important market index close to the S&P 500, Mid-Cap 400, or Russell 2000. (Fidelity, Vanguard, American Century are some of the fund companies I like.) Diversifying (i.e. spreading) an investment across various stocks in plentiful industries is important to protect the investment against a sudden drop within one or two stocks. Buying an index-based mutual fund provides diversification with a single purchase. Doing it by buying 20 different stocks, contained by my view, requires much more than $10k (I'd say-so $50k minimum) to keep the commissions low as a percentage of the investment.
Another possibility is an exchange-traded fund (ETF) that tracks a core index. SPY, MDY, and IWM are the ticker symbols of three such ETFs. An ETF is pretty much like a mutual fund, but is bought and sold resembling a stock through a broker rather than through a mutual fund company.
For me intuitively, I like the Russell 2000 base funds (or the IWM ETF) right now. In the recent stock bazaar debacle, small-company stocks are down more than larger company stocks (over 20% past its sell-by date the high in a minute I think). They could certainly still move about lower, but looking back five years from immediately, I think the current prices will look VERY cheap.
Online C.D. Question?
If i open a online C.D.if the apr is 3.45 % for a year residence
do i get salaried monthly from the intrest rate or yearly?
Answers: In every disc that I have see that quoted an APR, it is based on compound interest. The interest staying contained by the CD and count to the balance, not self paid out. Otherwise it would be simple interest. (There probably are products available that I haven't see.)
As the above answerer said, check out www.bankrate.com. You can get better than 3.45%.
First bad, I would check around for a higher disc Rate.
I do not believe 3.45% is average in the flea market right now.
You can hold monthly checks sent to you, quarterly or annual, it is your decision.
CDs are a article of the past and you should not do them. Why would you lock up your money for a year when within are many bank out there that present savings accounts for rates highly developed than that.
A lot can change within a year so it would be a shame not to be able to access your money or to forfeit adjectives of the interest because you had to close it hasty.
Be smart and use www.bankrate.com for accounts.
http://www.bankrate.com/brm/rate/mmmf_hi...
As others have said, this is not a well brought-up rate and the % is APY so if not reinvested the % will be smaller amount. Not all CDs are equal, some pay contained by different frequencies and some will allow you to choose. I would suggest Pentagon Federal Credit Union. It is easy to sign up, a huge organization, federally insured, and have a current 5% yield for some CDs. Regarding not locking contained by your money for a period of time, what will you do near it in a few months when rates enjoy fallen even more and it is time to reinvest. If you do not inevitability access to the cash lock within a good rate for at lowest three years when the current mess should be over and rates once again rising. My opinions solely.