This discussion started in the "regular topic" section, but now concerns a stock-only question. Without repeating the personal details regarding this, the end result is I will be able to transfer half (or approx. $210k )from a USB Trust into same Trust at Scottrade.
The investments I plan to transfer are as follows:
$128k PTTRX (Pimco Total Return) $30k FLTIX (Nuveen Short-Term Bond)
I plan on moving the two funds above as it is mutual funds I am most comfortable with letting managers make the specific investment decisions - though PTTRX is clearly overweight if this Portfolio was taken without regard to her other ones. I will reduce the PTTRX at least to minimum for class to help rebalance, and possibly some from FLTIX, but proceeds don't give me much leeway in rebalancing at this time.
So I need to add another $52,000 to transfer - and all the remaining investments are in stocks (plus one index- DJP). Most of the stocks were purchased decades ago, so I need to choose a stock that I can be reasonably comfortable maintaining as long as Mom is alive (she is 90, but we have long-life genes so could be another 10 years) -otherwise the capital gains taxes would be huge if I sell now.
Without having any knowledge of specific stocks, for personal animosity reasons I removed several stocks from transfer consideration (Wells Fargo WFC, and Exxon XOM.) I did check Morningstar on the remaining ones and came up with two main ones below. My purpose is to keep this Trust as conservative as possible (with exception of the one stock) - as Mom has another USB trust worth 3 times this total amount which is invested in 85%-90% U.S. stocks, so there is more than enough volatility there to take advantage of market gains (I have no control over that one).
The two stocks I've ended up with possibly transferring that seem to me to be able to hold up over a 5-10 year period are 3M or General Mills GIS - purchased in 1973 and 1975. Does anyone have an opinion on either of these? I would think that both would continue to be stable companies - but what do I know.
The only other two possibilities are General Electric GE (purchased 1919) and Bristol-Myers BMY, which combined would come to a similar amount.
Sorry for the rambling..been an upsetting morning. Hope I made some kind of sense in my question.
Comments
"Figuring out which [blue chips] can sustain their profitability is absolutely the hardest part," says Jennifer Wallace, a partner at Summit Street Capital Management in New York. "Many great companies get diluted down to mediocrity in the natural course of events."
Cathy, your question reminded me that I had recently read some surprising information regarding so-called "blue chip" stocks. Your question may be trickier than it seems at first glance. Here is the link to that article:
Why So Many Blue-Chip Investors Are Still Singing the Blues
What you should also be aware of is that Scottrade will NOT reinvest dividends into more shares. They will only post the dividend as cash to your account. I get the feeling that's not what your mom has been doing all along. Just something to consider and count your blessings.
Mark, you are correct that I didn't plan on selling the stock portion of the transfer. All of Mom's trusts at USB have dividends posted to cash account (to pay their fees and process quarterly distributions) and not reinvested. Since Mom has over $70,000 in annual Assisted Living, Medical and Prescription expenses, her expenses exceed her normal income so quarterly distributions from the trusts are needed to make up the difference.
However, my sister called the manager of USB who handles Mom's Rochester trusts yesterday, and the decision was made to allow me to transfer only half of the investments in this one account was accompanied by a requirement that I sign a "delegation agreement" which would delegate the investment responsibility of the remaining funds to my sister. Since that would leave 95% of all of Mom's investments in the responsibility of my sister and my uncle, neither who know anything at all about investments and who have no interest in learning, that wasn't acceptable to me. I would rather be able to give input on the entire trust than relinquish any input on half.
So the end result is I'm leaving it with USB. I'm sorry to take up all the time of those of you that were so kind to respond when the end result is that nothing will be changed. I really appreciate all the input. THANK YOU!
P.S. I will check your link, Old Joe, as it sounds like an interesting read.
It is possible that the documents pushed in front of you might not have legal standing. This is an industry you cannot trust and they will do anything to keep the assets in their house.
Thanks so much for your concern. I guess all of us have to make difficult decisions how we want to live our lives - and how much we are willing to give up to try and fight our battles.
Cathy
Trusts are complicated structures. I still think you need better guidance rather than being handled by the brokers and others. They do have their own lawyers giving them legal opinions and direction. You need legal advice on your side as well.
I made a big mistake in trying to tackle all this again right now. I feel totally drained from this last fight. This is my favorite time to work in the garden with my plants, and I've ended up spending most of my time trying to deal with this. So I need a strong portion of "Mulliner's buck-you-up-o" (old Wodehouse story) and time to recover my strength and my sanity. I've decided to concentrate my time on enjoying my plants through the Spring, with the plan of finding and hiring a professional this summer.
What I would really love to do in the meantime, however, is to present this group with at least a few of the actual USB portfolio's, giving all of you the investments, percentages of each and date purchased. I could then see if there is any general consensus whether there appears to be any serious, overall Portfolio investment/diversification problems. I probably could find advisors who could say there were problems and other advisors who could say that, though it may not be the best, there isn't anything seriously wrong enough to take legal action over. This group includes many intelligent investors with as close to different approaches as I could find, so my obtaining opinions from different viewpoints would be tremendously valuable to me. So after I take a few days rest, I'm hoping that it will be ok for me to try this.
Thank you so much for your interests, your comments and your concerns. So many people in this Forum have taken time to be such a great help to me over this last year.
Cathy