OT - Dow plunges 1,175 - worst point decline in history

[zap]

Originally Posted by oldguy00

Anyone see Exxon's dividend is at like 10%?? Might have to get in on that..

Cash flow does not support the current dividend.

You might want to study MLP's that have the cash flow and a long track record of increasing distributions over many years. Be careful of tax implications......far too many tax accountants (and every financial adviser I spoke too) are not familiar with the special tax treatment. It's not difficult to understand...just one of a bazillion somewhat obscure IRS tax codes that catch people out.

[jimcav]

Originally Posted by prototoast

Hi, I've been researching all things Opportunity Zones for the past year, and should have a report coming out in the next month or so.


Do you want to invest in residential real estate, commercial real estate, operating businesses? Do you specifically want to do any "impact investing" or just search out the highest return?

While I'd love to do a purely "impact" investment, it will be too much of our future risk (ie I think I will barely qualify to invest). One of the funds Forbes likes was run by former NFL'er Derick Morgan, and it had a somewhat diversified list of projects in several areas.

The only one near me I found was up in LA, and is a mixed commercial/residential remodel where the anchor is a ground floor grocery store with multiple units above/around. I've seen such developments before, and most seem to do well. I think people love the convenience of living next to/above a grocery. I know we have to keep the investment in pace for 10 years to reap the benefits, and that should be okay.

thanks again for your post! I'll be checking out the novoco link

[Buzz]

Originally Posted by likebikes

this thread is so weird to me. twice a month, every month, money is auto deducted from my checking account and transferred to brokerage according to my preset investment allocations. it’s not a lot as i’m trying to pull myself up out of poverty by my own bootstraps, but it’s something.

i don’t think about it ever, nor do i look at it.

Congrats and keep at it!!! I just hit a major financial milestone in my 401k account that still amazes me because I have done nothing other than what you have done. Twice a month contributions out of my paycheck for the past 28 years. My company had three Investment choices initially. Low, medium and higher risk. My mom told me to let it ride in the higher risk because time in the market is your best friend. She was right.

[veloduffer]

Originally Posted by jimcav

While I'd love to do a purely "impact" investment, it will be too much of our future risk (ie I think I will barely qualify to invest). One of the funds Forbes likes was run by former NFL'er Derick Morgan, and it had a somewhat diversified list of projects in several areas.

The only one near me I found was up in LA, and is a mixed commercial/residential remodel where the anchor is a ground floor grocery store with multiple units above/around. I've seen such developments before, and most seem to do well. I think people love the convenience of living next to/above a grocery. I know we have to keep the investment in pace for 10 years to reap the benefits, and that should be okay.

thanks again for your post! I'll be checking out the novoco link

I'd be a bit leery of commercial real estate other than industrial at this point. The market has had low activity as everyone is uncertain about building value as the trends since COVID are still emerging - less office space needed, urban exodus, retail shrinking further? Opportunity zones have also come under fire for providing sizable tax break for large real estate developers. The criteria for what constitutes an opportunity zone are not well defined as criticized as a boondoggle for the wealthy.

As for living near/above a grocery, you would need to be ok with all the truck deliveries, garbage (packaging, perishable food waste, associated insects and vermin), early & late hours. I think living above a nice quiet art store would be preferable. For impact investing, there are plenty of "green" funds available to invest in and will be an expanding field for retail and institutional investors.

[prototoast]

Originally Posted by jimcav

While I'd love to do a purely "impact" investment, it will be too much of our future risk (ie I think I will barely qualify to invest). One of the funds Forbes likes was run by former NFL'er Derick Morgan, and it had a somewhat diversified list of projects in several areas.

Just one comment on the issue of diversification. There is a difference between a fund that is invested in diversified projects, and a management company that has multiple diverse funds. Many companies manage multiple QOFs, but each fund may only invest in a single project (or in some cases, multiple funds may invest in just a single project). I don't have any information about Mr Morgan's fund that you saw information about, but if you do get into discussions with any particular fund managers, be clear about where, specifically, your money would be going.

[jimcav]

Originally Posted by prototoast

Just one comment on the issue of diversification. There is a difference between a fund that is invested in diversified projects, and a management company that has multiple diverse funds. Many companies manage multiple QOFs, but each fund may only invest in a single project (or in some cases, multiple funds may invest in just a single project). I don't have any information about Mr Morgan's fund that you saw information about, but if you do get into discussions with any particular fund managers, be clear about where, specifically, your money would be going.

thank you

[jimcav]

Originally Posted by veloduffer

I'd be a bit leery of commercial real estate other than industrial at this point. The market has had low activity as everyone is uncertain about building value as the trends since COVID are still emerging - less office space needed, urban exodus, retail shrinking further? Opportunity zones have also come under fire for providing sizable tax break for large real estate developers. The criteria for what constitutes an opportunity zone are not well defined as criticized as a boondoggle for the wealthy.

As for living near/above a grocery, you would need to be ok with all the truck deliveries, garbage (packaging, perishable food waste, associated insects and vermin), early & late hours. I think living above a nice quiet art store would be preferable. For impact investing, there are plenty of "green" funds available to invest in and will be an expanding field for retail and institutional investors.

It is similar to (but not as upscale) as this whole foods buildout in LA:
https://landonoho.com/#/

I had friends who lived in a much higher rise bldg in downtown "gas lamp"
San Diego next to Ralph's. They loved it then, 20years ago, and apartments and condos there are still doing well. I do agree there seems some question as to how QOZ get defined, because the particular LA project is at sunset and western, which I would not find particularly disadvantaged compared to many.

I hope to find something in the novoco link for a QOF that is doing green energy projects. I saw far more wind and solar on my drive across the USA last week compared to the same route in 2016, but still millions of potential acres on that route for green energy, so that would be my 1st choice.

[FierteTi52]

Originally Posted by reuben

Some banks, such as Capital One (360), and ally bank, have accounts that pay (or at least paid) considerably more than other banks, with few or no restrictions. There was at least one other but I can't think of the name now.

I put a bunch of money into a Capital One 360 savings account about a year ago. You'd have to check the rates now to see how they compare. I'm pretty sure the rates they pay have gone down, but they're probably still a lot more than a typical brokerage would pay for your cash.

I opened a Capital One 360 a few months ago at 1%. Made an additional deposit and the rate went down to .80%. The current rate is .65% not great but certainly better than my Vanguard MM funds.

[reuben]

Originally Posted by FierteTi52

I opened a Capital One 360 a few months ago at 1%. Made an additional deposit and the rate went down to .80%. The current rate is .65% not great but certainly better than my Vanguard MM funds.

Yeah, when I opened an account about a year ago it was 1.9%. Not surprising that we're making less now. But, as you say, it's still a lot more than a money market account at a brokerage, which is probably about 0.1%.

Capital One had the highest rate at the time, so I went with them. Ally Bank and others probably offer pretty much the same rate as COF now.

Earlier this year, in the April/May timeframe, they had a deal where if you deposited X dollars and left it there until September 1 they would add an additional bonus amount, based on how much you put in. No paperwork, just do it. So I did, and got an extra $450 earlier this month based on my additional deposit. I couldn't see doing much else with the money until the dust from the coronavirus and politics cleared, so it was pretty much a no brainer.

$450 won't speed up or slow down my retirement, but it was free money, so I did it.

[echappist]

Originally Posted by reuben

Yeah, when I opened an account about a year ago it was 1.9%. Not surprising that we're making less now. But, as you say, it's still a lot more than a money market account at a brokerage, which is probably about 0.1%.

Capital One had the highest rate at the time, so I went with them. Ally Bank and others probably offer pretty much the same rate as COF now.

Earlier this year, in the April/May timeframe, they had a deal where if you deposited X dollars and left it there until September 1 they would add an additional bonus amount, based on how much you put in. No paperwork, just do it. So I did, and got an extra $450 earlier this month based on my additional deposit. I couldn't see doing much else with the money until the dust from the coronavirus and politics cleared, so it was pretty much a no brainer.

$450 won't speed up or slow down my retirement, but it was free money, so I did it.

One basically has to bank hop in order to get reasonable rates. Savers certainly aren't being rewarded...

[reuben]

Originally Posted by echappist

One basically has to bank hop in order to get reasonable rates. Savers certainly aren't being rewarded...

Yeah, rates are crazy low, so that's not unexpected. And it drives more money to the stock market, which results in...

Real rates, or the rate - inflation, are barely above zero. But at least you're not losing money in a 0.1% money market account with 1-1.5% inflation (negative 0.9-1.4% real rate).

I was too young to be investing in anything other than baseball cards, so it never affected me, but I have vague memories of at least hearing about stagflation. In later years one of my math professors said that mortgage rates were in the teens and everyone was buying houses because they were afraid rates were going even higher. Imagine being smart enough to ladder some 30 year Treasury bonds back then. You would have made an absolute tax free killing.

On the other hand, in times such as these, if you have good credit, can afford it, and want to, now is a great time to buy a house, car, or any large item with a multiyear loan. Often referred to as "durable goods", which IIRC are items intended to last 3 years or more. Houses, cars, refrigerators, washing machines, etc. It's also a good time to refinance a loan you already have.

2-3 years ago I thought about buying some TIPS. Rates couldn't go much lower, right? WRONG. Glad I didn't.

[veloduffer]

Originally Posted by reuben

2-3 years ago I thought about buying some TIPS. Rates couldn't go much lower, right? WRONG. Glad I didn't.

TIPS funds did ok:
VIPSX:USNASDAQ GM
Vanguard Inflation-Protected Securities Fund
1 yr return 9.6%
3 yr return 5.2%

When rates go down, bond prices go up.

[reuben]

Originally Posted by veloduffer

TIPS funds did ok:
VIPSX:USNASDAQ GM
Vanguard Inflation-Protected Securities Fund
1 yr return 9.6%
3 yr return 5.2%

When rates go down, bond prices go up.

I'm surprised. TIPS are essentially a bet that rates go up, not down.

Yeah, I'm seeing 8-10% for 2019, although it depends on exactly what you're looking at. Either way, a stellar return for an investment like that. Hopefully you had some!

[fkelly]

I'd echo and extend ZAP's remark. MLP's can get you a decent rate of return. It's an oversimplification but most of the dividends are tax-deferred and reduce your cost basis so you pay up when you sell. Be careful to evaluate the debt burden on whatever MLP's you are considering and read several reports on each.

The tax consequences are incredibly complicated. There is absolutely no way a private individual who is not a CPA (or equivalent) could fill out the forms. Fortunately there is a web site that provides MLP tax info. You just download it into Turbo Tax and it does the rest. I've done it that way for more than 20 years.

[seanile]

so i believe the stock market is propped up by speculation on a vaccine's efficacy and imminence. well, the most promising vaccines in production are not viable unless kept at -90F to -110F from production all the way to the needle/POD.

then, what happens to an mRNA vaccine (a very new approach to vaccination) when temperature is improperly managed prior to inoculation? what kind of genetic damage then arises? yea...i'm not ****ing with that.

i moved to 45% cash/money market/bonds. i cannot in any scenario imagine a local municipality managing an effective distribution of that sort of vaccine without messing up the cold storage. i'm not a scientist, but neither are most investors, so i cannot expect they fully understand what's in development and what the risks are, and similarly i cannot expect that i fully understand the efficacy of this technological/scientific leap. but this is not within my risk bandwidth.

https://apnews.com/article/virus-out...2884adb1c14168

https://www.wsj.com/articles/covid-1...ty-11599217201