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General Electric pensioners are considering selling GE shares




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Things have changed a lot for GE retirees The stock has dropped 75% in the last 2 years, the quarterly dividend was 24 cents in 201

7 lowered 1 cent, and the pension fund is underfunded by [31] [319] (AP Photo / John Minchillo, File)

Many retirees from General Electric (GE) are dependent on their company for their portfolio The annuity and the stock for their portfolio excellent if the company is healthy and the stock performs well, but the flip side is not nice. "According to General Electric retiree Take Another Beating, many have oversubscribed GE shares, which has been over in the last two years 75% down, but will not be sold to the company for loyalty. * If you are in this stock, your best chance of getting a good result is hard to decide.

Loyalty [19659004] GE retirees were turned down i envied long ago reasons of others of their generation.

First: Your Life "This work made GE a legendary American success story, who would not be proud of it?

Second, many GE employees had received enough GE stock to be rich during their careers, many sold never a single share of GE and lived comfortably by the dividend.

Third, GE's retirement plan is a defined benefit plan that offers generous payouts regardless of the stock market's evolution, just as any other has a defined contribution plan In the end, benefits will ultimately depend on how good the assets you choose will be.

In addition, GE has voluntarily provided special one-off annuities in the past, and for GE retirees, these payments are as if you were 13. Received monthly pension instead of the normal 12. Between 1980 and 2011, GE has not once, but nine M I am proud of this and you have enough stock to retire with a portfolio that has paid a decent dividend and a pension that has paid good benefits that the company has often voluntarily surpassed. GE has been behind you for decades, and now you want your back. I understand where your loyalty comes from.

What has been changed

In short, General Electric is in trouble. As a result, the stock has fallen 75% in the last two years, and the company has lowered its quarterly dividend from 24 cents in 2017 to 1 cents, and the pension fund has been underfunded by $ 31 billion.

What Can You

The most important decision you can make is how much of your GE inventory you hold.

The Underfinanced Pension Fund May Worry You, But You Can not Help It In the worst case, the government agency takes over Pension Benefit Guarantee Corp. (PBGC) the pension obligations of GE. Take a look at this page to see what maximum benefit you could have when the PBGC comes in.

The main reason for selling your GE shares is the company It does not revolve around, you will not be able to cut your pension benefits at the same time there Your portfolio has been so successful that you can not recover from it.

Reactions

I have suggested that several GE retirees sell their GE stock and I have heard two common reactions. Here's one:

Similar arguments were made about Apple when its shares plummeted in the single-digit range. Then it rose like a phoenix from the ashes and became the most valuable company of all time. It eventually became the first company worth $ 1 trillion.

Imagine the advice to sell Apple shares was noted as it was well below $ 10 per share. This seller would be very disappointed. It's easy to sell when things are bleak. However, a fortune is made if you can look beyond today and see the possibilities of tomorrow.

Here is my answer:

If you think that GE is like Apple 10 years ago, make it a reasonable size in a diversified betting portfolio – 5% maybe 10%.

The second common reaction is what I call the thought experiment. Here it is:

If GE liquidated any assets other than healthcare and aviation, they would be worth about $ 19-20 per share. The conglomerate is unhealthy, but very valuable. GE is not a $ 9 stock in a rational world.

My Answer:

Your thought experiment might be more meaningful than the plan Flannery presented earlier this year. However, this is not GE's plan. Warren Buffett might make her accept this plan, but we will not. If you believe this analysis, make an appropriate size bet in a diversified portfolio – 5% or 10%.

I have heard many creative variations of these reasons because they have not sold GE shares, even though this is the only stock in their portfolio

A Better Question

The most common answers were as if the key question is whether GE is undervalued. A better question is how much of your portfolio should you have in GE.

Even the best investors earn only about 66% of the stocks they buy. They are careful to control the size of their positions so that losers are more than offset by the winners.

No one should bet so much on GE that he can never recover if he's wrong. For those who depend on GE's pension plan, this is doubled.

If GE already accounts for more than 10% of your portfolio, selling a portfolio makes sense, even if you think the company is undervalued and has the potential to be the next Apple. Retaining a 10% Position with GE is a tremendous vote of confidence for the company, which can make you more comfortable when the rest of your portfolio is in other stocks.

Size Matters

Almost everyone I've met with has agreed with me to this point. However, I have not heard anyone actually sold a GE stock.

I think that's because GE is well over 10% of its portfolio. Therefore, the sale is enough to reduce it to 10%, a big decision. If GE is 60% of your portfolio and you want it to be 10%, you must sell 50% of your portfolio. This is far more than a course correction.

For those who are in this boat, I suggest you not just give up a big sell order. Instead, place a sell order for maybe 2% of your GE holdings and schedule a small sell order every week until the GE position drops to 10%.

It's better to take many small steps in the GE Right direction than to do nothing, because you do not want to risk selling all of your stock before GE turns around.

Every time you sell stocks, you have some money to invest. If you are interested in one of the stocks I am following, click here to be notified when writing about it.

This article is part of a series I write for those who want to get their portfolios back on track. To be notified when the next part is published, click here.

If you want to tell me your opinion, click here.

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Things have changed for GE retirees. The stock has fallen 75% in the last two years, the quarterly dividend has been reduced from 24 cents in 2017 to 1 cent, and the Pension fund is underfunded by [31] [319] [31] (AP Photo / John) Minchillo, File)

Many retirees of General Electric (GE) depend on the company's annuity and stock for their portfolio, which works well if the company is healthy and the stock performs well, but the flip side is not pretty After responding to General Electric retiree Take Another Beating, many have an oversized stake in GE stocks that have fallen 75% in the last two years, but out of loyalty If you are in this camp your best chances of getting a good result will require some hard decisions.

Loyalty

GE Retirees They were dating out to the company whose reasons have long been envied by others of their generation.

First, your life's work GE has become a legendary American success story. Who would not be proud of it?

Second, many GE employees had received enough GE stock to be rich during their careers. Many never sold a single share of GE and lived comfortably on the dividend.

Third, GE's retirement plan is a defined benefit plan that offers generous payouts regardless of the stock market performance. Just about everyone else has a defined contribution plan, where the benefits ultimately depend on how well the assets you choose are.

In addition, GE has voluntarily provided special one-time pension benefits in the past. For GE retirees, these payments are like receiving a 13-month pension instead of the normal 12 this year. Between 1980 and 2011, GE did not do this once, but nine times. I'm proud of that, and you have enough stocks on the way to retire with a portfolio that has paid a decent dividend and a pension that is good Paid benefits that the company has often voluntarily exceeded. GE has been behind you for decades, and now you want your back. I understand where your loyalty comes from.

What has been changed

In short, General Electric is in trouble. As a result, the stock has fallen 75% in the last two years, and the company has lowered its quarterly dividend from 24 cents in 2017 to 1 cents, and the pension fund has been underfunded by $ 31 billion.

What Can You

The most important decision you can make is how much of your GE inventory you hold.

The underfunded pension fund can trouble you, but you can not do anything about it. In the worst case, the government agency takes over Pension Benefit Guarantee Corp. (PBGC) the pension obligations of GE. Take a look at this page to see what maximum benefit you could have when the PBGC comes in.

The main reason for selling your GE shares is that the company is not spinning You are not able to simultaneously cut your retirement benefits because your portfolio is so strong is taken that you can not recover from it.

Reactions

I have suggested that a number of GE retirees sell their GE stock, and I've heard two common reactions. Here's one:

Similar arguments were made about Apple when its shares plummeted in the single-digit range. Then it rose like a phoenix from the ashes and became the most valuable company of all time. It eventually became the first company worth $ 1 trillion.

Imagine the advice to sell Apple shares was noted as it was well below $ 10 per share. This seller would be very disappointed. It's easy to sell when things are bleak. However, a fortune is made if you can look beyond today and see the possibilities of tomorrow.

Here is my answer:

If you think that GE is like Apple 10 years ago, make it a reasonable size portfolio – 5% maybe 10%.

The second common reaction is what I call the thought experiment. Here it is:

If GE liquidated any assets other than healthcare and aviation, they would be worth about $ 19-20 per share. The conglomerate is unhealthy, but very valuable. GE is not a $ 9 stock in a rational world.

My Answer:

Your thought experiment might be more meaningful than the plan Flannery presented earlier this year. However, this is not GE's plan. Warren Buffett might make her accept this plan, but we will not. If you believe this analysis, make an appropriate size bet in a diversified portfolio – 5% or 10%.

I have heard many creative variations of these reasons because they have not sold GE shares, even though this is the only stock in their portfolio

A Better Question

The most common answers were as if the key question is whether GE is undervalued. A better question is how much of your portfolio should you have in GE.

Even the best investors earn only about 66% of the stocks they buy. They are careful to control the size of their positions so that losers are more than offset by the winners.

No one should bet so much on GE that he can never recover if he's wrong. For those who depend on GE's pension plan, this is doubled.

If GE already accounts for more than 10% of your portfolio, selling a portfolio makes sense, even if you think the company is undervalued and has the potential to be the next Apple. Retaining a 10% Position with GE is a tremendous vote of confidence for the company, which can make you more comfortable when the rest of your portfolio is in other stocks.

Size Matters

Almost everyone I've met with has agreed with me to this point. However, I have not heard anyone actually sold a GE stock.

I think that's because GE is well over 10% of its portfolio. Therefore, the sale is enough to reduce it to 10%, a big decision. If GE is 60% of your portfolio and you want it to be 10%, you will need to sell 50% of your portfolio. This is far more than a course correction.

For those who are in this boat, I suggest you not just give up a big sell order. Instead, place a sell order for maybe 2% of your GE holdings and schedule a small sell order every week until the GE position drops to 10%.

It's better to take many small steps in the GE Right direction than to do nothing, because you do not want to risk selling all of your stock before GE turns around.

Every time you sell stocks, you have some money to invest. If you are interested in one of the stocks I am following, click here to be notified when writing about it.

This article is part of a series I write for those who want to get their portfolios back on track. To be notified when the next issue is published, click here.

If you want to tell me what you think, click here.


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