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Also, is it beneficial to hold them in retirement accounts, IRAs, if they have special tax consequences if held in a normal account? Thank you. In particular, I know that ET generates a K-1 IRS form, which many people find burdensome to deal with. (Limited Partnership.) Not me. I'll just pay my tax guy, like every year, to do our 1040. But the K-1 form typically arrives very late! (Harumph.)
With regard to the K-1, I'm told that dividends amount to "Return Of Capital." Technically, they're giving you back your own money, non-taxable----- until they give you back so much that your own total cost basis is covered; then it becomes taxable. There are others here at MFO who know more than I do about it. Maybe they can contribute here, and tell us if I'm all wet and full of shit.
What percentage of your portfolio do you allocate to these companies? Also, is it beneficial to hold them in retirement accounts, IRAs, if they have special tax consequences if held in a normal account? Thank you
They're large positions (10%+), but I have several large positions. I don't worry much about percentage allocations of individual holdings per se since I prefer concentrated holdings in quality names which can lead to 'overweight' or 'majorly overweight' sector allocations ... which drives financial analysts/brokers/algos crazy when they run the numbers and go "OMG you have XX% in [stock/sector$] that's horrible!"
Added NLSAX to my alternative sleeve last week. Replaced GATEX. I think it will be a good fit. Held up quite well 1st quarter 2020. I’m very diversified. Largest single holding (DODBX) is at 8.7%. NLSAX is 7.95%.
I'm assuming your question is in regards to the individual stock holding. My portfolio is comprised of a taxable account, and a rollover IRA...both approximately the same size. Between them I hold 17 individual stocks. Within each account, a holding may generally account for anywhere between 5-7% of that account's total...and about 3% or so of the overall portfolio total. With only 2 exceptions, they all generate dividends and contribute to cashflow for spending purposes. With the exception of the REITs, their dividends are tax advantaged so it really doesn't make a difference in where you hold them. From an overall portfolio perspective, individual holdings account for 57.5% of the total.
@hank : Did you have a stake in DK, I see it popped this week. Article in Weekend WSJ.
@Derf - I bailed from DKNG at just over $14 some time ago. Had been as low as $10.66 during the time I was averaging in. Didn’t do bad - but would have made a whole lot more if I’d held it. Also had some ARKK at very attractive prices for a while. So there’s 2 big fish still in the pond if you want to go fishing.
PS - A stock or fund that’s up 10% one day and down 10% another day is difficult to deal with. (Ask Cathie)
@Mav123 - I hold a 3% position in EPD in my Roth account. Opinions seem to be divided on whether that's a good idea or not but I haven't had any issues yet. I've held it for 10-12 years despite that contrary opinion. It does issue a K-1 which TurboTax handles easily.
As I mentioned earlier, I swapped out GATEX with NLSAX in my alternative sleeve. I thought the reasons might be worth explaining …
In late March of this year Warren Buffett agreed to purchase a stock I held in the alternative sleeve of portfolio. The stock is Allegheny (Y) and the price shot up 25% overnight. I immediately sold all my shares of Y at the 25% premium, leaving a hole in the alternative sleeve. Readers may be aware that I’m not one to hold much cash. So, somewhat in desperation I tried to come up with a suitable fund or stock to fill the hole. GATEX is a fund I’d owned years earlier and had researched more recently. So, the cash proceeds from selling Allegheny went into GATEX.
The biggest drawback to continuing to hold GATEX is that, while hedged against market volatility, it otherwise uses S&P index stocks to represent its equity positions. I hadn’t realized that when buying. Since I also own a small speculative hold in SPDN (a fund that shorts the S&P 500) I found myself essentially shorting GATEX while at the same time owning it. Not a good position to be in. Decided to hang on to GATEX until something better for my purposes came into focus.
@Mark, thank you. yes, that is it...K-1. Thank you for reminding me. If you were to hold it in a taxable account? I assume TurboTax or HR Block software will need to be used to handle it.
Thank you, @rforno and @PRESSMuUP. Very different personal styles of investments. Someone mentioned on another forum that individual names should not amount to more than 10% of your portfolios. However, if you held it for some time and know it very, why not.
Thank you, @Crash. Yes, those k-1s... They tend to have their special place in your taxes, kind of have to remember where to plug them in... It helps if you know where it needs to go on 1040. I tend to use software...Used to use TurboTax, but there were very slow updates during covid/2020, but HR Block released the tax forms updates faster, so now I am using HR Block.
By the way @Mark, have you tried other software besides TurboTax? Was TT easier to use?
By the way, what are all of your takes on ENB, a massive oil/gas company in Canada? I have seen people who know about this company very much like it because it is stable and expands into renewables as well.
Thank you @Crash. I am younger, but like you, I have the same thinking that I need much more money to own all of the names I like. By the way, I always liked RBC, but don't see it on your list. Any reason?
Thank you @Crash. I am younger, but like you, I have the same thinking that I need much more money to own all of the names I like. By the way, I always liked RBC, but don't see it on your list. Any reason?
yes, it's there in my list with the others. RY is the ticker.
ENB . Yes. Solid, well-established. Doesn't surprise me if they're into renewables now. I would hold it long-term, if you're going to buy it. It's an oil/gas giant. GIANT. Almost nothing compares, midstream. great div, too. https://www.barchart.com/stocks/quotes/ENB/analyst-ratings
@Mav123 - I have not tried other tax software simply out of concerns (however irrational) over importing one software programs data/records into another. It's already annoying enough having to deal with tax return filings.
Actually, the K-1 information I receive tells me exactly how to file or fill in the information but TT does the same nearly effortlessly.
You also commented "Someone mentioned on another forum that individual names should not amount to more than 10% of your portfolios. However, if you held it for some time and know it very, why not." INDEED! I concede that it might not work for everybody but nearly 60% of my portfolio is in individual names.
But I think it all depends on the particular stocks and also achieving some balance between the sectors so they don’t all move in the same direction. I’m just a novice on that front, but I’m sure I have a few mutual funds - especially in the mining sector - that are way more volatile than most of the individual equities held.
But I think it all depends on the particular stocks and also achieving some balance between the sectors so they don’t all move in the same direction. I’m just a novice on that front, but I’m sure I have a few mutual funds - especially in the mining sector - that are way more volatile than most of the individual equities held.
Yes, that's a good way to put it! With so much already in Financials, I'm looking for a good pick in a different industry. Marine Shipping, or clothing manufacturing, or what have you. ... JRSH. PCFBY. GRIN. SBLK DAC. I need to save up some cash, at the moment, however. RGR fell like a stone after latest Earnings Report disappointed... TRP tells me my personal Rate of Return in RGR is now DOWN -10%. Sucks. But it is a tiny amount of money. That might well be the one I "flip," after the 31st Aug. dividend shows up. Not too far away. Others I'm eyeballing: QAT (ETF.) PSTL (RE.). DBSDY (Singapore Bank ADR.). CLF (but no dividend!)
Individual equities are in a different league (than funds) for sure. More risk / reward. Of course, I’d never give advice or offer an opinion on someone else’s deliberations in that regard. In addition, I won’t even divulge my individual stocks going forward for fear it might sway someone else’s deliberations - and also not wanting to be “second-guessed” by others as to my choices. Always willing to share & discuss any of my funds owned of course.
Tonight: 08 August, 2022: a toehold Limit Order into QAT at $20.99, which is -8.7 less than where it stands overnight, at $23.01. Who knows how long THAT will take to fill? I'm in no hurry, though. Why? Qatar is a rising market. This order to buy shares is like a "precision strike," rather than to depend only upon my TRAMX, which has been INCHING upward recently. Time will tell, as ever.
***Edited to add: QAT is moving too far, too fast for me. Winning the race, going away. Canceled Limit order. Instead, bought a Postal REIT on a Market Order today. Pleased with the entry price: $16.315. (yes. TRP brokerage.). PSTL.
Comments
Thank you.
In particular, I know that ET generates a K-1 IRS form, which many people find burdensome to deal with. (Limited Partnership.) Not me. I'll just pay my tax guy, like every year, to do our 1040. But the K-1 form typically arrives very late! (Harumph.)
With regard to the K-1, I'm told that dividends amount to "Return Of Capital." Technically, they're giving you back your own money, non-taxable----- until they give you back so much that your own total cost basis is covered; then it becomes taxable. There are others here at MFO who know more than I do about it. Maybe they can contribute here, and tell us if I'm all wet and full of shit.
I'm assuming your question is in regards to the individual stock holding. My portfolio is comprised of a taxable account, and a rollover IRA...both approximately the same size. Between them I hold 17 individual stocks. Within each account, a holding may generally account for anywhere between 5-7% of that account's total...and about 3% or so of the overall portfolio total. With only 2 exceptions, they all generate dividends and contribute to cashflow for spending purposes. With the exception of the REITs, their dividends are tax advantaged so it really doesn't make a difference in where you hold them. From an overall portfolio perspective, individual holdings account for 57.5% of the total.
PS - A stock or fund that’s up 10% one day and down 10% another day is difficult to deal with.
(Ask Cathie)
+1
"You can't win them all" , Derf
In late March of this year Warren Buffett agreed to purchase a stock I held in the alternative sleeve of portfolio. The stock is Allegheny (Y) and the price shot up 25% overnight. I immediately sold all my shares of Y at the 25% premium, leaving a hole in the alternative sleeve. Readers may be aware that I’m not one to hold much cash. So, somewhat in desperation I tried to come up with a suitable fund or stock to fill the hole. GATEX is a fund I’d owned years earlier and had researched more recently. So, the cash proceeds from selling Allegheny went into GATEX.
The biggest drawback to continuing to hold GATEX is that, while hedged against market volatility, it otherwise uses S&P index stocks to represent its equity positions. I hadn’t realized that when buying. Since I also own a small speculative hold in SPDN (a fund that shorts the S&P 500) I found myself essentially shorting GATEX while at the same time owning it. Not a good position to be in. Decided to hang on to GATEX until something better for my purposes came into focus.
That’s the long and short of it …
By the way @Mark, have you tried other software besides TurboTax? Was TT easier to use?
RY is the ticker.
ENB . Yes. Solid, well-established. Doesn't surprise me if they're into renewables now. I would hold it long-term, if you're going to buy it. It's an oil/gas giant. GIANT. Almost nothing compares, midstream. great div, too.
https://www.barchart.com/stocks/quotes/ENB/analyst-ratings
https://www.wallstreetzen.com/stocks/us/nyse/enb/stock-forecast
https://simplywall.st/stocks/us/energy/nyse-enb/enbridge
https://www.chartmill.com/stock/quote/ENB/analyst-ratings
https://www.stocktitan.net/news/ENB/pacific-energy-and-enbridge-announce-partnership-in-woodfibre-nh7rpdrvqd6m.html
https://www.stocktitan.net/news/ENB/enbridge-reports-second-quarter-2022-financial-results-and-announces-uob9i7uhntty.html
The P/E is rather rich these days, though. That might explain so many HOLD ratings, currently.
https://www.wsj.com/market-data/quotes/ENB
https://www.wsj.com/market-data/quotes/ENB/research-ratings
Actually, the K-1 information I receive tells me exactly how to file or fill in the information but TT does the same nearly effortlessly.
You also commented "Someone mentioned on another forum that individual names should not amount to more than 10% of your portfolios. However, if you held it for some time and know it very, why not." INDEED! I concede that it might not work for everybody but nearly 60% of my portfolio is in individual names.
But I think it all depends on the particular stocks and also achieving some balance between the sectors so they don’t all move in the same direction. I’m just a novice on that front, but I’m sure I have a few mutual funds - especially in the mining sector - that are way more volatile than most of the individual equities held.
Individual equities are in a different league (than funds) for sure. More risk / reward. Of course, I’d never give advice or offer an opinion on someone else’s deliberations in that regard. In addition, I won’t even divulge my individual stocks going forward for fear it might sway someone else’s deliberations - and also not wanting to be “second-guessed” by others as to my choices. Always willing to share & discuss any of my funds owned of course.
Take care,
***Edited to add: QAT is moving too far, too fast for me. Winning the race, going away. Canceled Limit order. Instead, bought a Postal REIT on a Market Order today. Pleased with the entry price: $16.315. (yes. TRP brokerage.). PSTL.