Stock Question

M

MoneyMatters

Guest
Folks,

I left UPS some time ago. I have kept my 401K plan and the associated UPS Stock Match (3%) all with UPS. The 401K has done ok compared to the market, but the UPS stock part of it is, well, ... it is what it is.

My question is whether you guys could help me make the decision to sell the stock or keep it a while longer. I didn't convert the stock to cash in the 401K because I was told that the 100 year birthday of UPS would be a banner year for stock. Isn't THIS year the 100 year birthday?

If you had some money in UPS stock, but didn't work at UPS any longer. Would you ride it out or sell it? I am being serious in my question -- I really don't know what to do.
 

moreluck

golden ticket member
From sale of stock, the bill to the IRS can be staggering. Please consider the tax consequences when figuring where else to put your money. Will the new investment cover the payout to the IRS?

We are slowly diversifying, but won't get rid of all of it. There's still an $89 price target from analysts out there. The talk of the international growth was very upbeat IMO. It still pays a decent dividend too.

Just some things to think about to make your decision.
 

satellitedriver

Moderator
From sale of stock, the bill to the IRS can be staggering. Please consider the tax consequences when figuring where else to put your money. Will the new investment cover the payout to the IRS?

We are slowly diversifying, but won't get rid of all of it. There's still an $89 price target from analysts out there. The talk of the international growth was very upbeat IMO. It still pays a decent dividend too.

Just some things to think about to make your decision.
If it is a 401k, there is no tax consequence for the sale. If one has held an investment more than a year the capital gains tax is set at 15%. Tax consequence is a serious matter in ones financial planning. Ups's 2.5% dividend doesn't even cover yearly inflation rates. The growth rate has been nil.
Sorry to sound so negative.

I believe in UPS as a solid employer, but not as an investment in a portfolio.
I have many stocks that pay 3 times the dividend of UPS and have grown by 20% a year.
Just put your money in a total market fund to diversify and forget it if you are not willing to do alot of research and due diligence.
PAX
 

wyobill

Well-Known Member
ride it out. the dividens double every 5 yrs. it depends on how much you have. I would wait untill it hits 90at least
 

satellitedriver

Moderator
I`m waiting for the stock to hit 80 and then I will sell :closedeye
It was from Nov to Jan in 2004, then from April to July in 2006. You should have sold then. The MACD data doesn't show a trend going in that direction. If it makes it to 80 in this year, I would be surprised.
PAX
 

satellitedriver

Moderator
ride it out. the dividens double every 5 yrs. it depends on how much you have. I would wait untill it hits 90at least

For the dividends to double every 5 years, you would need a growth rate of 14.4% per year and that just hasn't happened. It does not matter how much one has, the dividend is paid per share of stock owned.
 

SeniorGeek

Below the Line
I suggest doing what I did:
I had the 401k converted to cash, which I transferred to mutual funds in an IRA account to keep the tax deferral. I already had the IRA from converting a previous 401k plan that dissolved.

I still own the stock that is outside the 401k. I plan to sell it all at one time - pretty soon, now that the last shares I bought have become eligible for capital gains tax rates. (I know, I know - What gains?)
 
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upsdawg

UPSDAWG
I AM IN THE SAME BOAT----i WOULD RECCOMMEND MOVING IT TO A DIFFERENT 401K PLAN OR IF YOU QUALIFY--TO AN IRA--THAT WAY YOU WILL NOT BE PENALIZED.THE 15% CAPITAL GAIN WAS ONLY IN 2006---CHECK WITH A TAX PERSON TO SEE WHAT 2007 AND BEYOND LOOKS LIKE---OF COURSE IF THE DEMS TAKE THE PRES LOOK OUT FOR THE STOCK MARKET------IT ISN'T FAIR THAT EVERYONE CAN TAKE PART IN A GREAT ECONOMY??
 

over9five

Moderator
Staff member
I think it would depend how much stock you have.

I'm not sure about Wyobills calculation, BUT the stocks dividend does go up every year.
 

browniehound

Well-Known Member
First of you need to sell at least 85% of it. You cannot have 100% of your retirement funds in 1 single stock. (hello? ever hear of Enron?). I don't what you should do with it, but I know(and any CFP will tell you) you are taking a HUGE risk by having 100% of your retirement funds in 1 stock.
 
P

powak

Guest
First of you need to sell at least 85% of it. You cannot have 100% of your retirement funds in 1 single stock. (hello? ever hear of Enron?). I don't what you should do with it, but I know(and any CFP will tell you) you are taking a HUGE risk by having 100% of your retirement funds in 1 stock.

Let's just wait and see if he takes the browniehound "diversify yourself to riches" advice.

Face facts - the only way to build wealth is to put ALL your eggs in one basket and leverage the fire out of it.

No other way.

That's how you have people walking out the door with $10+ million in stock.

Then you diversify.

You diversify at that point because you have built wealth you want to preserve.

Nope, you're never going to be one of the Big Boy$ unless you take on some risk (and in many cases LOTS of it).

I realize that runs contrary to the labor union mindset. They nearly universally don't want to accept any risk - or responsibility, for that matter - but want to be treated and want to benefit as if they had.

Still doesn't work that way though.
 

Raw

Raw Member
OF COURSE IF THE DEMS TAKE THE PRES LOOK OUT FOR THE STOCK MARKET
I agree the Dems aren`t as good for the stock market as the republicans but because the republicans try to help companies grow with less taxes thus they make more money and hire more people and stock goes up and so forth...but the stock market just finished a 4 year ABC up formation plus even extended a bit so there is nothing more for it to do but have a huge correction. Also the dollar at 81 cents is way too low so the slow climb in interest rates to keep the dollar above 80 cents will have a negative effect on the market. But what do I know as I got out of the market when the dow was at 12,400 and SP 500 around 1420 ! :ohmy:
 

UPS Lifer

Well-Known Member
I have read all of the posts regarding your question. Their are some insightful suggestions, but there are others that I would beware of. For example, selling 85% of your investment or holding onto 100% of your investment may work for some people based on their own situation.

Your situation is unique and needs to be addressed by a financial planner or your CPA. Here are just a few of the questions that need to be answered and analyzed to give you the best advice.

I don't suggest that you answer any of these questions in this forum. Think about your answers and ask a professional.

What is your risk tolerence?
When do you plan on retirement?
How much money or cashflow do you need to retire for the lifestlye you want to have?
How far are you toward those goals?
How much can you afford to save?
How much debt have you accumulated?
Do you have other assets that could help diversify your portfolio?
Do you own your own home? Are there reserves that can be tapped?
How much gain have you made on your stock?
How about your stock...do you have enough to hypothicate it?
Are you willing to pay the tax consequences?
Do you understand the Alternative Minimum Tax Structure? (You could get hit with additional tax depending on how much stock you sell and what the gain is.)

If you do not have all the answers to the questions above...get help from a professional.

UPS is a solid investment...but it may not meet your needs. Remember - the higher the risk the higher the return (but you could lose more than you bargained for).

I have 6 different investment counselors that provide me with information.
Each has told me not to sell all my stock. One is a tax attorney, another a CPA, another is CEO of one of the largest commercial real estate companies in America, one is from Merrill Lynch, one is from Smith Barney and one is from Banc America.

Where do you turn if you don't already have an advisor?
Go to someone you personally know that is a successful investor and get a recommendation. Best advice is to get someone who is a financial planner who does not sell other services.
 

LeddySS98

Well-Known Member
I've been buying company stock now for 13 months...$3,075 has been pulled out of my checks so far, and my portfolio is sitting at $3,458.. That puts me at a 14% gain at the moment... Whats so bad about that?
 

Raw

Raw Member
I've been buying company stock now for 13 months...$3,075 has been pulled out of my checks so far, and my portfolio is sitting at $3,458.. That puts me at a 14% gain at the moment... Whats so bad about that?
Remember you bought at a 10% discount so that was a 4% gain minus the discount. The discount is good and that is why I buy UPS stock, just wish we didn`t have to hold shares for 2 years now!
 

HazMatMan

Well-Known Member
Folks,

I left UPS some time ago. I have kept my 401K plan and the associated UPS Stock Match (3%) all with UPS. The 401K has done ok compared to the market, but the UPS stock part of it is, well, ... it is what it is.

My question is whether you guys could help me make the decision to sell the stock or keep it a while longer. I didn't convert the stock to cash in the 401K because I was told that the 100 year birthday of UPS would be a banner year for stock. Isn't THIS year the 100 year birthday?

If you had some money in UPS stock, but didn't work at UPS any longer. Would you ride it out or sell it? I am being serious in my question -- I really don't know what to do.

So?? 100 year celebration, so what?? Will it make the stock soar?? absolutely not.. Don't believe the hype.. I want to know if i'm getting a cool package car like I used to get for UPS birthdays back in the early and mid 90's when UPS actually cared about it's employees....
 
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