Am I better off staying with Exxon stock?

Question

or cashing out while it is up and invest in cd's and treasury bonds? I'm retired and 64 drawing ss.

Answer 1

In order to properly answer the question, I would need to know what other stocks you have holdings in. Is Exxon the only stock? If you are subject to a great deal of specific risk. Anything could happen. Congress might pass a law causing Exxon to have to pay another 10 billion in taxes for example. Not very likely but possible. On the other hand it would be unwise to liquidate the entire position. Remember you have to pay taxes on your capital gains. And Exxon is by no means a bad investment.

Putting the money in cds or treasuries. Not a great move either. Remember inflation is always going to be with us eating away at your returns. That and taxes.

A little diversity in your investments would be prove advantagous. And by diversity I do not mean selling part of your Exxon and buying COP. I mean maybe buying a couple of good mutual funds or index funds. If you have a very large capital gain, do not liquidate much of Exxon this year, just enough to not drive you into a higher tax bracket. There is always next year and it is less than 30 days away.

Assuming that you might like a little income similar to what Exxon is providing there are good index fund to consider. DVY is one. Pays a dividend of about 3.2%. It also has a 3 year average annual return of 15%. FDL pays a dividend of about 3.5% with an average annual return of 14.7%. It holds about the same portfolio as DVY. I would also suggest diversifying geographically. The dollar has not been very healthy as of late. PID pays a dividend of about 2.7%, has an average annual return of 23% but a short lifetime. It invests in foreign companies.

With those selections you will be better diversified.

Answer 2

With the Democrats in majority on Capitol Hill, your CDs and treasuries will probably be more unaffected than their favorite whipping boy, Big Oil--and ExxonMobil is the top of big. Because most of the phenomenal profits that 'big oil' has garnered in recent years has just been sitting there, not increasing product stock delivered to consumers (along with an accompanying decline in product prices), not obtaining new reserves (abroad of course, we can let them drill anywhere but the US) of oil, many of the new majority party want to recend the tax breaks given the oil companies (to offset losses due to international uncertainty and most recently to compensate for losses and disruption of services because of hurricane Katrina and the like during the previous year).

Exxon will probably still be a good, dividend-paying cash cow for you and may even rise in price for a little while longer, but the legislature will probably curtail the gravy train before too long. I'd hold for now, but be shopping banks.

Answer 3

you didn't mention any number of things that would/could make a serious answer difficult if not impossible...

however, a generic thought
sell half, invest in high dividend stocks/close-end funds/ETFs
look up: RNE, IFN, IAF, GIM, ACAS, AINV, PEO
or
sell all and invest in a good Growth and Income fund
or
sell all and invest in munis [no growth, but tax free income]

generally speaking....
CDs, T- Notes and T- Bills only pay a few points above inflation...not very good to live on but safe, secure $$$

Answer 4

If you have a profit and held it for 1 year and one day (to avoid short-term capital gains)-I would sell it. I would look into a less volitile stock that paid a good dividend-maybe financials.