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Feel Bad About Your Portfolio’s Losers? Hope You Didn’t Buy These

igor m



It’s been a rough six months for most S&P 500 investors. But if you think that’s bad, try owning a money-losing stock for a decade — it’s not as unusual as you might think.


Nearly 40 stocks in the S&P 500 — including consumer discretionary Carnival (CCL), fallen industrial giant General Electric (GE) and disappointing communications firm AT&T (T) — saw their shares go absolutely nowhere in an entire decade, says an Investor’s Business Daily Analysis of data from S&P Global Market Intelligence and MarketSmith. Some of the stocks are actually down by sizable amounts in that time.

Much of these losses, too, accelerated in just the past six months in the bear market. And it’s another reminder of how simply holding and hoping doesn’t always work out.

“If you want to practice ‘buy and hold’ for years (if not decades) of investing, then you need to be able to identify companies that have long runways and huge moats that can grow and grow and grow,” said Whitney Tilson, of Empire Financial Research, prior to the sell-off last year.

Dangers Of Buy And Hold

It’s easy to imagine the end of a bear market if you think it’ll be a distant memory in a decade. But what if your money sits dormant for 10 whole years? That’s harder to ignore.

And it’s more common than you might think. Nearly 35 of the S&P 500 stocks lost 10% or more in the past 10 years. And 14 are down more than 40%. And most painful of all: Two S&P 500 stocks lost 70% of their value in that time.

It’s important to note that the ongoing bear market is largely responsible for wiping out many years of gains in a short period of time. Take Carnival. Shares lost more than half their value just this year. And that’s a big reason why the cruise ship operator’s shares are more than 70% lower than they were 10 years ago. Certainly, the cruising shutdowns during the Covid-19 pandemic haven’t helped much.

AT&T And General Electric Not Money In The Bank

Not long ago, investors thought AT&T and GE were true “buy and hold” stocks. But that hasn’t been the case in the past 10 years.

Take AT&T, thought to be the ultimate widows and orphans stock. Granted, the stock yields 5.3% and has distributed some shares of spinoffs over the years. Even so, shares of AT&T proper are down more than 40% in the past 10 years. And you can’t just blame this year’s bear market. Shares are only down 14% this year. That’s actually a tad better than the S&P 500’s 18.1% drop this year.

And then there’s General Electric. Amazingly, GE was the most valuable company in the S&P 500 in 2005, ahead of Exxon Mobil (XOM) and Microsoft (MSFT). It was also No. 1 in 2004, 2003, 2001 and 2000. And for that, you can’t fault S&P 500 investors at the turn of the century for thinking it was unstoppable. But that was a mirage. Despite some spinoffs, shares dropped more than 60% in the past 10 years. What’s more, its famous yield shriveled up, too. GE now yields less than 1%.

And the whole energy sector, too, is a reminder of the perils of buying and holding. Sure, investors owning energy shares are up this year. But even following this year’s powerful rally, seven energy stocks in the S&P 500 are still down in the decade. Who’s bragging about owning them now?

‘Dead Money’ S&P 500 Stocks In The Past 10 Years

They’re all down in the past decade (excluding spinoffs and dividends)

Company Symbol 10-year change Sector
Carnival (CCL) -72.3% Consumer Discretionary
Lumen Technologies (LUMN) -72.2% Communication Services
Vornado Realty Trust (VNO) -64.5% Real Estate
General Electric (GE) -60.6% Industrials
APA (APA) -59.7% Energy
Viatris (VTRS) -51.7% Health Care
Kinder Morgan (KMI) -48.8% Energy
Schlumberger (SLB) -47.2% Energy
Warner Bros. Discovery (WBD) -45.0% Communication Services
Tapestry (TPR) -44.3% Consumer Discretionary
Wynn Resorts (WYNN) -42.5% Consumer Discretionary
Healthpeak Properties (PEAK) -40.6% Real Estate
DuPont de Nemours (DD) -40.4% Materials
AT&T (T) -40.3% Communication Services
Bath & Body Works (BBWI) -38.6% Consumer Discretionary
Simon Property Group (SPG) -37.8% Real Estate
Dish Network (DISH) -36.6% Communication Services
Ralph Lauren (RL) -35.5% Consumer Discretionary
Franklin Resources (BEN) -34.7% Financials
Penn National Gaming (PENN) -30.6% Consumer Discretionary
Baker Hughes (BKR) -29.3% Energy
Occidental Petroleum (OXY) -27.9% Energy
International Business Machines (IBM) -26.4% Information Technology
PVH (PVH) -26.4% Consumer Discretionary
Invesco (IVZ) -26.0% Financials
FirstEnergy (FE) -24.3% Utilities
Paramount Global (PARA) -20.5% Communication Services
Ventas (VTR) -20.0% Real Estate
Mosaic (MOS) -18.7% Materials
Boston Properties (BXP) -17.8% Real Estate
Las Vegas Sands (LVS) -16.7% Consumer Discretionary
Freeport-McMoRan (FCX) -16.5% Materials
Marathon Oil (MRO) -12.5% Energy
Nielsen Holdings (NLSN) -11.1% Industrials
Federal Realty Investment (FRT) -8.2% Real Estate
Devon Energy (DVN) -6.3% Energy
Dentsply Sirona (XRAY) -4.0% Health Care
PPL (PPL) -2.4% Utilities
Sources: IBD, S&P Global Market Intelligence
Follow Matt Krantz on Twitter @mattkrantz


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American Weed Stocks Are Cheap. They’re About to Get a Sales Bump.

igor m



However bad the year has been for most stocks, it has been especially harsh for state-licensed cannabis sellers.

In just the past month, the

AdvisorShares Pure US Cannabis

exchange-traded fund (ticker: MSOS), which tracks America’s multistate operators—or MSOs—fell 25%, while the

S&P 500

dropped 7%.

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How Do Mega Backdoor Roths Work?

igor m



A mega backdoor Roth is a unique 401(k) rollover strategy that’s designed for people whose incomes would ordinarily keep them from saving in a Roth Individual Retirement Account. The advantage of using a Roth IRA to save for retirement is being able to make tax-free qualified withdrawals. But not everyone can contribute to these accounts; higher-income earners are excluded. That’s where the mega backdoor Roth comes into play. If you have a 401(k) you’d like to roll over, you could use this strategy to enjoy the tax benefits of a Roth IRA without having income be an obstacle.

Make sure you’re taking advantage of every opportunity to maximize your retirement assets by working with a financial advisor.

Roth Account Basics

Before diving into the specifics of a mega backdoor Roth, there are a few things to know about Roth accounts, including Roth IRAs and Roth 401(k)s.

First, these accounts are both funded with after-tax dollars. That means when you make qualified withdrawals later, you won’t pay income tax on the money since you already paid it upfront. This is the key characteristic of Roth accounts and what makes them so appealing to investors who anticipate being in a higher tax bracket at retirement.

Next, your ability to contribute to a Roth 401(k) is not restricted by your income. But it is for a Roth IRA. For the 2021 tax year, you must be within these modified adjusted gross income limits to make a full Roth IRA contribution:

  • Single filers: MAGI of $125,000 or less

  • Married filing jointly: MAGI of $198,000 or less

  • Head of household: MAGI of $125,000 or less

You can make partial contributions above those income limits. But your ability to contribute phases out completely once your MAGI hits $140,000 (if you file single or head of household) or $208,000 if you’re married and file a joint return. For 2021, the full contribution allowed is $6,000 with a $1,000 catch-up contribution for savers aged 50 and older.

Finally, Roth 401(k) accounts are subject to required minimum distribution rules just like traditional 401(k) accounts. This rule requires you to begin taking money from your 401(k) starting at age 72. A Roth IRA, on the other hand, is not subject to RMD rules.

What Is a Backdoor Roth?

A backdoor Roth offers a work-around for people whose incomes are above the limits set by the IRS. When you execute a backdoor Roth, you roll money over from a traditional IRA to a Roth account. This way, you won’t have to pay taxes on your retirement savings in the Roth IRA when it’s time to make withdrawals. And you’re not subject to required minimum distribution rules either.

But there is a catch. You have to pay income tax on the money you roll over to a Roth account. So while you could save money on taxes in retirement, you’re not escaping the tax liability of a traditional IRA altogether.

How a Mega Backdoor Roth Works

A mega backdoor Roth is a backdoor Roth that’s designed specifically for people who have a 401(k) plan at work. This type of backdoor Roth allows you to contribute up to $38,500 to a Roth IRA or a Roth 401(k) in 2021. This is in addition to the regular annual contribution limits the IRS allows for these types of accounts. To execute a mega backdoor Roth, two conditions have to be met. Your 401(k) plan needs to allow the following:

You can ask your plan administrator whether your 401(k) meets these criteria. And if your plan doesn’t allow for in-service withdrawals or distributions, you could still attempt a mega backdoor Roth if you plan to leave your job in the near future.

If your plan meets the criteria, then you can take the next steps to execute a mega backdoor Roth. This is typically a two-step process that involves maxing out after-tax 401(k) contributions, then withdrawing the after-tax portion of your account to a Roth IRA.

Again, whether you can follow through on the second step depends on whether your plan allows in-service withdrawals. If it doesn’t, you’ll have to wait until you separate from your employer to roll over any after-tax money in your 401(k) into a Roth IRA.

You also need to watch out for the pro rata rule. This IRS rule says you can’t only withdraw pre- or post-tax contributions from a traditional 401(k). So if you’re completing a mega backdoor Roth, you couldn’t just withdraw post-tax contributions if your account holds both pre- and post-tax funds. In that case, you may have to roll over the entire balance to a Roth IRA.

Benefits of a Mega Backdoor Roth

There are three key benefits associated with executing a mega backdoor Roth. First, you can contribute significantly more to a Roth IRA upfront this way. For 2021, the contribution limit is $38,500 on top of the regular annual contribution limit and any catch-up contribution limits that may apply.

You’ll need to know the maximum amount you’re allowed to contribute to the after-tax portion of your 401(k). So for 2021, the IRS allows a maximum contribution of $58,000 or $64,500 if you’re 50 or older. You’d subtract your 401(k) contributions and anything your employer adds in matching contributions to figure out how much you could add to the after-tax portion.

Next, you can enjoy tax-free withdrawals in retirement. This is a benefit you may otherwise not being able to get if your income is too high to contribute to a Roth IRA. By reducing your tax liability in retirement, you can help your investment dollars go further. And you may have a larger legacy of wealth to pass on to future generations.

Finally, a mega backdoor Roth IRA would allow you to sidestep required minimum distribution rules. This means that you could retain control over when you choose to take distributions from a Roth IRA.

So who is a mega backdoor Roth right for? You may consider this move if you:

  • Have an eligible 401(k) plan at work

  • Have maxed out traditional 401(k) contributions

  • Are not eligible to contribute to a Roth IRA because of your income

  • Have additional money that you want to invest for retirement

  • Want to leverage the higher Roth IRA contribution limits allowed by a mega backdoor rollover

Talking to your financial advisor can help you decide if a mega backdoor Roth makes sense. And your 401(k) plan administrator should be able to tell you if it’s possible, based on your plan’s guidelines.

Mega Backdoor Roth Alternatives

If you can’t execute a mega backdoor Roth because your plan doesn’t allow it, there are other ways to increase your retirement savings. For example, you could try a regular backdoor Roth instead. This might be something to consider if you still want to enjoy the tax benefits of a Roth IRA but your plan doesn’t fit the criteria for a mega rollover. You could also elect to make Roth 401(k) contributions to your retirement plan at work. This way, you still get the benefit of contributing after-tax dollars and making tax-free withdrawals. You’d be subject to the regular contribution limits and you’d still have to take the required minimum distribution. But that may outweigh the value of tax savings in retirement.

Investing in a Health Savings Account (HSA) is another option. While these accounts are not specifically designed for retirement, they can yield multiple tax benefits. Contributions are tax-deductible and grow tax-deferred. Withdrawals are tax-free when used for eligible healthcare expenses. And at 65, you can take money out of an HSA for any reason without a tax penalty. You’ll just owe ordinary income tax on any withdrawals that are not used for healthcare expenses.

Finally, you could open a taxable brokerage account to invest. This doesn’t necessarily save you money on taxes since you’ll owe capital gains tax when you sell investments at a profit. But it could help you to diversify your investments and there are no limits on how much you can invest in a brokerage account annually.

Bottom Line

A mega backdoor Roth strategy could work well for higher-income earners who want to take advantage of Roth account benefits. There are certain rules that need to be followed to make it work, however, so you may want to talk to your plan administrator or a tax professional before going ahead. Keep in mind also that even if you can’t complete a mega backdoor Roth rollover, you still have other options for growing retirement savings.

Tips for Retirement Planning

  • If you’re saving for retirement in a 401(k) or IRA, pay attention to the fees you’re paying. For instance, check the expense ratios for each fund you’re invested in to understand how much you pay to own that fund on an annual basis. You can then compare that to the fund’s performance to determine whether the fees are justified. Also, consider any administrative fees you might be paying and how those affect your net returns.

  • Consider talking to your financial advisor about a mega backdoor Roth and whether it could be right for you. If you don’t have a financial advisor yet, finding one doesn’t have to be complicated. SmartAsset’s financial advisor matching tool makes it easy to connect with professional advisors in your local area. You can get your personalized recommendations in minutes just by answering a few simple questions. If you’re ready, get started now.

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Alibaba Is Tumbling. Chinese Tech Stocks Have a New Headache.

igor m



Chinese tech stocks were tumbling on Monday as two of the embattled sector’s leading players faced fresh fines from market regulators over disclosure rules.

China’s State Administration for Market Regulation announced Sunday a wave of penalties for improperly reporting past deals, in breach of competition law.


(ticker: BABA) and


(0700.H.K.) were among the companies fined as a result.

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