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Richard G. Pearce  

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  • When To Sell A Dividend Stock [View article]
    Depends on what you bought with that money.
    Jun 24, 2013. 02:18 PM | Likes Like |Link to Comment
  • Why Now Is The Time To Be Bullish [View article]
    I view technical analysis a bit like I view weather forecasts--they are rarely exactly right, especially over long periods, but they have some use in making near-term decisions.

    In this case, for individual securities I look for the security to trade below my calculated fair value with a sufficient margin of safety, regardless of technical indicators. In this environment, that margin of safety is 20-25%, but when stock prices are depressed and/or safer options provide sufficient returns, then I get greedy and increase my required margin of safety.

    For markets that I track using exchange traded funds and mutual funds, such as emerging market stocks right now, I am going to look for a drop closer to 10% before I look to buy. I am more likely to use some technical analysis in this situation.
    Jun 24, 2013. 09:10 AM | Likes Like |Link to Comment
  • When To Sell A Dividend Stock [View article]
    I think the point is that great dividend growth companies can get too expensive, at which time they should be sold. So long as you invest that money in another great dividend growth company, then you have not lost future dividend income or the opportunity to take advantage of the compounding nature of dividend growth investing. Rather, you have hopefully decreased your risk and increased your potential returns.

    Having a target for when to sell your dividend growth stocks is difficult, but in the below article I discuss using a margin of safety in deciding whether to sell just as investors use in deciding when to buy. The idea is to hedge against errors in timing, valuation, etc. to some extent by requiring the stock to trade for that margin of safety above your calculated fair value. Even at the peak of the stock market, I only held one good dividend growth stock that I thought was trading above that margin of safety, and so I sold it.
    Jun 24, 2013. 07:54 AM | Likes Like |Link to Comment
  • The Supreme Buy And Hold MLP [View article]
    That relates to my point about the call option that the partnership reserves. If it is an all or nothing situation, then you may be able to handicap the odds of it occurring to some extent based upon the cost of essentially bringing the company private relative to the general partner's cash flow and loan opportunities, if known.

    Its one thing for your shares to essentially have no voting power, as is the case with companies where insiders have majority ownership. It is something different for your shares/units to be subject to a contingent, permanent call option that is most valuable for the general partner to exercise when you as the unit holder likely least want it to be exercised.
    Jun 20, 2013. 05:39 PM | 1 Like Like |Link to Comment
  • The Supreme Buy And Hold MLP [View article]
    I enjoyed the article. I am curious about the following statement: "The company's profits are not taxed at the corporate level; they are completely distributed amongst the company's owners and taxed marginally at the personal level." Often times, an MLP distributions are considered a return of capital and are not necessarily taxable at the time of distribution, which is unlike a REIT. Are you saying that is not the case with TNH?

    With regard to what almost appears to be a call option on the limited partnership units by the general partner, does the general partner or the partnership have the capacity to execute on less than all of the outstanding units held by non-affiliated owners? Do you have a way to handicap the odds of this happening?
    Jun 20, 2013. 03:59 PM | Likes Like |Link to Comment
  • 5 Tax Tips And Tricks In Investing [View article]
    Whole life insurance has some significant benefits (and costs), but it is not the be-all-end-all it is touted to be.
    Jun 19, 2013. 06:43 PM | Likes Like |Link to Comment
  • 5 Tax Tips And Tricks In Investing [View article]
    From my experience, if it is too good to be true, then run the other way. Executing on that advice would save countless people from undesired taxes, penalties and prosecution.
    Jun 19, 2013. 06:42 PM | Likes Like |Link to Comment
  • 5 Tax Tips And Tricks In Investing [View article]
    badwater bill--Thanks for commenting. The 0% tax rate also applies to qualified dividends, provided the taxpayer is in the 10% or 15% tax bracket and meets the other requirements. I mentioned the long-term capital gains but not the qualified dividends because the former can be used to a much greater extent in tax planning than the latter, but both are important.
    Jun 19, 2013. 12:33 PM | Likes Like |Link to Comment
  • 5 Tax Tips And Tricks In Investing [View article]
    I had not, and I can only find 2-3 websites about it, which all appear to be from the same writer. It appears to refer to whole life insurance. Why do you ask?
    Jun 18, 2013. 09:31 PM | Likes Like |Link to Comment
  • 5 Tax Tips And Tricks In Investing [View article]
    Gary Jakacky--These rules apply to singles just as they do to married couples, but the dollar amount thresholds are different.
    Jun 18, 2013. 02:45 PM | Likes Like |Link to Comment
  • 5 Tax Tips And Tricks In Investing [View article]
    rljanson--Thanks for commenting. The contribution limit is $5,500 in 2013 with a catchup provision permitting an extra $1,000 if you are 50 or older. The rules regarding how frequently you can roll assets out of, and into, certain accounts can be tricky, and you should always consult with your adviser before taking action. If the assets are rolled directly from account-to-account without ever being distributed to you, then the once a year rules may not apply. With a direct account-to-account transfer, most people should be able to annually contribute to a non-deductible Traditional IRA and then roll the contribution into a Roth-IRA.
    Jun 18, 2013. 02:44 PM | Likes Like |Link to Comment
  • 5 Tax Tips And Tricks In Investing [View article]
    Bruce7b--Thanks for commenting, and I appreciate your supplements. The harvesting of tax losses is entirely situational, as you suggest. Some clients may still have carryover tax losses from prior years from which they can take $3,000.00 a year against ordinary income (in addition to offsetting current year capital gains). Others may have only sold some shares in winners and not have any holdings that will end up being down enough to be worth selling to offset those gains.

    For those that are well diversified, and trade infrequently, there will often be a holding or two that is down during the year to a sufficient extent to justify selling to capture the losses, waiting 31 days, and then repurchasing, or else purchasing a different security to replace the one sold.
    Jun 18, 2013. 12:45 PM | Likes Like |Link to Comment
  • 5 Tax Tips And Tricks In Investing [View article]
    OneMarketJunkie--Great question. In this case, the contribution rules are tied to the gift tax rules, rather than the IRA contribution rules. As a result, your gifts to the beneficiaries of the 529 plans are based on the calendar year. Please keep in mind that other gifts to the same beneficiaries count towards the $14,000 limit.
    Jun 18, 2013. 08:56 AM | Likes Like |Link to Comment
  • 5 Tax Tips And Tricks In Investing [View article]
    Tony Pow--Thanks for commenting.

    Q1--sounds correct

    Q2--your conversion income is on the first page of your 1040, well before you get to your AGI and then taxable income, so your income from the rollover will reduce the opportunity for tax free long-term capital gains.

    Q3--You are correct, the basis in the repurchased stock that caused the wash sale rule to apply will be increased by the amount of the disallowed loss, such that when you sell the stock in a transaction that does not violate the wash sale rules, you will then get the benefit of the prior loss.
    Jun 17, 2013. 04:49 PM | 2 Likes Like |Link to Comment
  • 5 Tax Tips And Tricks In Investing [View article]
    FinalAnalysis--Thanks for commenting.
    Jun 17, 2013. 04:44 PM | Likes Like |Link to Comment