Anonymous asked in Business & FinanceInvesting · 8 years ago

Why is Abbott Laboratories a better stock to purchase than Eli Lilly Company?

4 Answers

  • 8 years ago
    Favorite Answer

    Who says Abbott is better???

  • Anonymous
    4 years ago

    Hey there, Well the good news is that since you inherited the stock, under current tax law, your new basis in the stock is what it was worth at the time of death of the person who gave it to you. If the stock was pretty close to $330,000 when you inherited it, that means you will have minimal capital gains tax impact if you sell it. The question then becomes what do you do with it now. It definitely makes good investment sense to diversify your portfolio. Having just $330,000 of one stock is a recipe for future investment disaster (just look at Enron). The actual mix of investments though is the key question. That will depend on a lot of things. How comfortable are you with short-term risk (the ups and downs of the stock market)? What do you want to invest this money FOR? Retirement in the future? INcome right now? College for the kids? A combination of things? What other assets do you have already? How are they invested? What income do you get from your job or other sources? This is a lot to consider. You might want to get an opinion from a financial planner. But I believe if you take some time and do some research of your own, you can come up with a good portfolio of your own. Here are just a few ideas: (1) Stick with no-load, low expense mutual funds, especially when purchasing stock mutual funds. If you are relatively conservative, all you might need is about 30-40% in an S&P 500 Index fund, like the Vanguard Index 500 as an example. If you're more aggressive, find two or three other quality mutual funds that focus on small company stocks and international stocks that will be a little riskier, but will give you more potential return. (2) Have a good, solid bond fund -- one that invests in relatively safe U.S. Treasury bond, agency bonds (GNMAs, FNMAs, for example) or high quality corporate bonds. Don't go for the "high yield" stuff that is riskier and has poor credit quality. If you're conservative, put in about 50-60% in that (less if you're more aggressive) (3) Finally, put 5-10% in a money market fund. This gives you maximum principal stabilty and income for a part of your portfolio, no matter if stocks go up or bonds go up. I personally doubt the U.S. stock market is going to experience a significant correction (more than 10% down) in the next 12 months or so. It's not out of the realm of possibility, of course. But your best protection, even if that happens, is NOT to keep the Abbott stock. Diversify and that will lessen the bad times and (hopefully) keep the portfolio going strong in the good times. Good luck, man

  • Anonymous
    8 years ago

    will they pay in 2013 any dividend ?

    and the answer to this question should you give by yourself depending on

  • 8 years ago

    You tell me.

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