No, you can't. Average basis is only allowed for mutual funds, not for "regular" securities.
-- Rich Carreiro snipped-for-privacy@rlcarr.com
No, you can't. Average basis is only allowed for mutual funds, not for "regular" securities.
-- Rich Carreiro snipped-for-privacy@rlcarr.com
I also recall reading that CAPCO, the main (only?) provider of excess SIPC insurance, is thinking of exiting the business.
-- Rich Carreiro snipped-for-privacy@rlcarr.com
Quite right - my post was ambiguous there. In fact, for the mutual funds, there are a couple of ways to do it (single and double category). As I said, it's messy, and while the IRS makes this additional method available (and it's actually the default method that most brokers use unless you go out of your way to specify that you want FIFO or specific share identification. I generally recommend the latter).
This is a pretty nice summary of all this:
Note, too that under the Economic Stablization Act, the burden of tracking cost basis is being shifted to the brokers and custodians (from the individuals). Starting with all stock purchases in 2011 and mutual fund and DRIPs in 2012 and debt instruments, options and other secrities in 2013.
I find it interesting that they included DRIPs and Mutual Funds in one category while regular individual stock purchases in another.
Anyway, my main point is that if you are buying a little at a time with a DRIP or a fund with reinvestments, your life is going to be easier if you stop buying when you make your first sale and not buy any more.
I'm trying to imagine the tax nightmare faced by folks who write checks directly from their fund accounts - which is allowed in many bond funds whose NAVs do move up and down. Yech.
Especially since you are guaranteed to have wash sales, since purchases (via reinvestment) are happening monthly.
-- Rich Carreiro snipped-for-privacy@rlcarr.com
How does Bernie Madoff effect this?
Xho
Xho Jingleheimerschmidt wrote: Re SIPC coverage:
Googling turns up much on this. The SIPC has been notifying a certain category of Madoff's victims of their rights and it appears many will recover $500k. Others were doing investing with Madoff that is not covered by SIPC rules etc. A quick pick:
insurance.http://groups.google.com/group/misc.invest.financial-plan/browse_thre... CAPCO dropped JPM (not the other way around, from your brokerage statement) but is any other supp insurer in place or is JPM trying to line up another supp insurer? Seems like not having supp insurance could make a dent in JPM business. OTOH I suppose JPM could also be counseling its brokerage clients not to put in more than the SIPC would reimburse.
Clarification: JPM is not formerly Bear Stearns but rather JPM, a much larger company, bought Bear Stearns with government support ec.
CAPCO policies last for one year. It did not terminate a policy in force. At the end of each policy period, an insured brokerage must either purchase insurance from an insurer willing to sell it, or go without insurance. JPMCC chose to take the latter path; so it dropped excess SIPC insurance coverage. (If Allstate won't renew your auto policy, and you don't ask State Farm, then you're the one deciding to drive without coverage.)
Given that JPMCC is standing by its January statement, which talks about SIPC insurance but is silent about excess coverage, I would guess it's not lining up other coverage.
Clarification: I was specifically talking about the clearing house brokerage. This was a subsidiary of Bears Stearn (not Bear Stearns), and remains a subsidary (JP Morgan Clearing Corp) of its new parent. As a separately capitalized company, it seems to live or die on its own.
JP Morgan Clearing Corp. has its own brokerage license, and its own membership in SIPC. So it is indeed a distinct brokerage. One that was large, and remains large, on its own merits. A major brokerage that has no excess SIPC insurance.
Mark Freeland snipped-for-privacy@nyc.rr.com
In the several posts you put on the internet on this, you quoted from a brokerage statement, "CAPCO will not be renewing any of its surety bonds at their termination on February 16, 2009." I was going by what the brokerage statement said (as quoted by you).
If I were a JPM client, I would call JPM and ask what is going on, rather than guessing.
I think I will go with "Bear Stearns," per the 18 million hits my search engine gives vs. about a thousand for "Bears Stearn."
Putting aside the trees so as to see the forest, I agree the main point of your original post is important information.
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