A: If Yellen is confirmed by the Senate, she’ll be the first woman in the job since it was created in 1789. (Alexander Hamilton was the first secretary.)
Yellen will oversee the Department of the Treasury, which encompasses many bureaus and is charged with many tasks. These include collecting taxes; paying government bills; overseeing currency and coins; managing government accounts and the public debt; supervising national banks and thrifts; and advising on domestic and international financial, monetary, economic, trade and tax policy. Its bureaus include the Internal Revenue Service (IRS), the Bureau of Engraving and Printing (bills) and the U.S. Mint (coins), and the Financial Crimes Enforcement Network.
Q: Are cannabis-focused exchange-traded funds (ETFs) good investments? – B.V., Kailua, Hawaii
A: You should do your own research into the growing medical and recreational marijuana industries to see whether you think their futures look rosy or bleak.
If you end up bullish on cannabis-focused companies, then ETFs are a good option. Like mutual funds, each will distribute your investment across a bunch of companies in or related to the industry, such as marijuana cultivators, owners of dispensary real estate, retailers, growing equipment providers and more.
There are many such ETFs to choose from, though most are fairly new and small; see which ones best match your interests and charge the lowest fees. Here are a few (with some amusing ticker symbols): MG Alternative Harvest ETF (MJ), Cambria Cannabis ETF (TOKE), Global X Cannabis ETF (POTX) and AdvisorShares Pure Cannabis ETF (YOLO).
Don’t put all your eggs in the cannabis basket, though – or any other single basket.
How to save for retirement: There are many retirement accounts available to most of us, so don’t just settle for one without learning about others. Here’s an overview.
IRA accounts can be opened at many financial companies and brokerages, and they come in two main varieties: the traditional IRA and the Roth IRA. You can contribute up to $6,000, total, to one or more IRAs for 2020, plus an extra $1,000 if you’re 50 or older. (These limits often change from year to year, but are remaining the same in 2021.) The IRA contribution deadline for 2020 is April 15, 2021.u0009Traditional IRAs offer an upfront tax break, shrinking your taxable income by the amount of your contribution. In retirement, withdrawals are taxed at your income tax rate. Roth IRA contributions offer no upfront tax break, but if you follow the rules, withdrawals in retirement will be tax-free. That can be a big deal if you’ve amassed a large sum over many years.
There’s a good chance your employer offers a 401(k) plan. There are traditional and Roth versions of 401(k) accounts, too. The contribution limit for 401(k)s in 2020 (and 2021) is $19,500, plus another $6,500 for those 50 and older.
IRAs generally give you a lot of freedom in allocating your money: You can invest in any of thousands of stocks, mutual funds and other securities. A 401(k) account is typically more restrictive, offering a set menu of certain funds and other investments. But unlike IRAs, 401(k) plans frequently offer matching contributions from your employer. That’s free money, so it’s smart to contribute at least enough to max out any available match
You needn’t use only one of all these options. You might have a 401(k) account through your job, and a Roth IRA as well. Depending on how good your 401(k) is, you might focus much of your saving and investing there, or you might just contribute enough to max out the match and then save in IRAs until you max those out.
You can research 401(k)s at BrightScope.com, and learn more about retirement planning at Fool.com.
My dumbest investment
Shoulda woulda coulda: My dumbest investment happened when I left a job at Apple in December 1997. At the time, I had options to buy 12,000 shares. I didn’t buy a single share. Instead, I sold the options and bought a case of beer with the results. I should have stayed at Apple. – R., online
The Fool responds: Ouch! Apple’s stock has split four times since 1997, which would have turned 12,000 shares into 24,000 shares, then 48,000, then 336,000, and then 1,344,000 shares. (Note that the value of shares at the time of a split is reduced proportionately, so the splits themselves don’t make a stock’s value skyrocket.)
MORE MOTLEY FOOL:
If you had bought 12,000 shares (for around $1,440) and hung on to them, you’d have 1.344 million shares, and with the stock recently trading around $126 per share, that would be worth more than $169 million! Of course, a glorious future wasn’t clearly in the cards for Apple in 1997: The iMac debuted in 1998, and the iPod in 2001; the iPhone was launched in 2007.
Even if you’d bought all 12,000 shares, at some point they’d have come to dominate your portfolio, and it would have been sensible to sell some shares, lest you keep too many eggs in that one basket. Apple’s rise wasn’t uninterrupted, either: Shares plunged by more than 50% in 2008, and by almost 40% in 2018.
Name That Company: I trace my roots back to the 1929 founding of a mothproofing company by a former minor league baseball player. I grew into the ServiceMaster company, offering many services to homes and businesses, and added a big pest-control brand in 1986. In 2020, though, I sold off my ServiceMaster Brands, including AmeriSpec (home inspections), Furniture Medic (cabinet and furniture repair), Merry Maids (residential cleaning), ServiceMaster Clean and ServiceMaster Restore. I kept my pest-control business, though, and took its name as my own. Based in Memphis, Tenn., I employ more than 10,000 people and serve 2.8 million customers. Who am I?
: I trace my roots back to a “stationery and fancy goods” store opened on Broadway in New York City in 1837. By 1870, I was a top American silversmith and seller of jewels and timepieces; in 1878, I bought a 287-carat diamond, cutting it to just 129 carats. My customers have included Jacqueline Kennedy Onassis, Franklin D, Roosevelt and Abraham Lincoln. I boast a market value recently near $16 billion, and LVMH is planning to acquire me. I’m known for a specific color. People visit me looking for jewelry and beautiful things — or maybe a morning meal. Who am I? (Answer: Tiffany & Co.)
The Motley Fool take
Vaccines … and more: Pfizer’s (NYSE: PFE) COVID-19 vaccine candidate, which it developed with BioNTech, has shown 95% efficacy – so it may come as a surprise that as of this writing, Pfizer’s stock is up less than 2%, year over year, while the S&P 500 is up nearly 16%. That’s an opportunity.
Although the vaccine would likely generate billions of dollars in revenue, Pfizer is a company that reported $51.8 billion in revenue last year and $16.3 billion in profit. Clearly, it has a lot of other things going on. Its growth drivers include Vyndaqel, which is approved for treating the rare genetic disease transthyretin amyloid cardiomyopathy, and blood thinner Eliquis. Pfizer is also awaiting regulatory approval decisions for several treatments, such as abrocitinib for atopic dermatitis and tanezumab for osteoarthritic pain. Pfizer’s pipeline also includes 21 treatments in late-stage clinical trials.
Meanwhile, Pfizer has spun off its Upjohn business to form a new company with Mylan, called Viatris. Pfizer will receive a nice $12 billion cash windfall from the deal, which could be used for growth-fueling acquisitions.
Pfizer pays its shareholders a dividend that recently yielded 4.1%, and it has been boosting dividend payments by an annual average of 5.4% over the past five years. The company is poised to deliver solid growth over the years to come, along with dependable income, so long-term investors should give it a closer look.
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