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For Individuals
Portfolio Management
Investment accounts are held by firms such as Schwab Institutional and TD Ameritrade Institutional. Gabriel Capital does not ever take possession of client investment assets.
Once accounts are in place and client goals and expectations have been established, Gabriel Capital provides complete portfolio management services. This includes: all investment recommendations, placement of investment orders and on-going daily management.
Stocks, no-load & load waived mutual funds, exchange traded funds (ETFs), bonds, options and money market are investments that may be used in building and managing client accounts.
Account Types
- Rollover accounts (401k, 403b, IRA & Roth IRA)
- Taxable accounts (regular brokerage, margin, trusts, custodian, etc.)
- Managed (Independent 3rd party managers)
- SEP IRAs, SIMPLE IRAs and other business retirement accounts
Asset Allocation Reviews
(Ideal for 401(k) Accounts and Variable Annuities)
Maybe you are in a situation where you just need a review of how investments are allocated between stock, bond, and money market exposure. Gabriel Capital can provide this type of review at the time and frequency you select. This type of service is generally performed for an hourly fee.
Monthly Investment Education Topic: Roth IRAs have real appeal
In a world that appears to hold higher tax rates in the future, the Roth IRA looks better and better. Depending on your earned income, you may, or may not be able to contribute to a Roth IRA.
However, starting next year, you will be able to convert money from your regular IRA to a Roth IRA regardless of income. Paying taxes today at what are probably lower rates than future rates may end up being a smart move... one which allows you to not worry about the US Gov't trying to take more and more of your savings through a sharply progressive tax scale.
Speak with your CPA or tax expert to determine if this is a good move.
It will depend on things such as your income now vs. retirement, as well as other factors. You have some time to strategize, so take advantage of it.
The 10% Income Solution: Covered Call Writing
Xerox (XRX) is one of the world’s leading providers of document techology and equipment. The company may hold appeal for those who want exposure to the business cycle. In addition (XRX) can provide handsome portfolio income.
As of July 27, 2010, XRX is valued at $9.60 per share. It pays a quarterly dividend of 4.25 cents/share. At this price, the dividend equates to a dividend yield of 1.78%. While this isn’t great, it certainly beats current money market rates of close to 0%. However, there is a way to further increase the income return on this stock.
An owner of (XRX) at today's price could sell a "call option" against the stock. A call option gives someone the right to purchase your stock at a pre-set price through a pre-set date. In exchange for this right, they agree to pay you a price determined by participants in the market.
For this example, the stock option expiring in January of 2011 will be used, giving someone the right to buy 100 shares of (XRX) at $10.00 per share. Note; this is an 6 month option from July of 2010.
The current price of this option is $0.80 per share.
For the person that undertakes selling this option, they will earn a total of $0.89 per share in combined dividend and option income over the next six months. Dividing this amount by the share price provides for an income return of 9.3% over six months. If you were to annualize this over twelve months, the income return exceeds 18%. In addition, if the buyer of the option purchases the stock from you at the contracted price of $10.00/share, an $0.40/share gain is realized or 4.2%, for a total return of 13.5% over 6 months.
Let's say the transaction involves 1000 shares. If the owner of the option you sold purchases the stock from you, they can't apply the cost of the option towards the purchase of the stock. This means you get the full $10,000 for 1000 shares (less applicable brokerage commission) plus you keep all of the $890 in dividends and option income.. So, if “called away” (purchased from you at the option price of $10), you will receive back $10,000 on your investment of $9,600 to purchase 1000 shares of (XRX).
Now, one more benefit…
Since this investment will generate $0.89/share in total income over the next 6 months, the break-even on (XRX) drops from the purchase price of $9.6 down to $8.71. That is a nice bit of cushion in an asset class that has displayed a great deal of price fluctuation.
While these numbers are all real as of the July 27, 2010, please keep in mind that this discussion in no way reflects a recommendation by Gabriel Capital LLC. It is also possible the Gabriel Capital, LLC, its' owner, or clients may hold positions in the mentioned securities, or hold a short position against this security. Anyone who takes action based on this sample explanation does so at their own hazard.
If (XRX) falls far enough in price, an investor could still lose money on this investment. Results of covered call option writing are not guaranteed and can lose money. This strategy should only be considered for a portion of a person’s overall investment allocation. Please seek the advice of a financial professional before implementing any investment strategies. Your should consult your CPA or tax professional on the likely tax treatment of option income.
Free Analysis
Would you like a complimentary technical analysis of a stock position of interest to you? Gabriel Capital provides one free review to anyone that asks. In the feedback section, please list the name of the stock, its' ticker symbol, your name, address and work number (for verification purposes only, you will not be solicited by phone at work). Within two weeks, you'll receive a complimentary review of the position you've requested. No strings attached.
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