Banking on the underdog
It will take some time before Citigroup shakes its reputation as the “big ugly” of the financial-services industry, said Andrew Bary in Barron’s. But, given its “strong” capital position, hefty loan-loss reserves, and supreme global brand, the stock is a “good bet” at less than $3 a share. Other than American International Group, it’s the only financial company currently trading at a steep discount to its tangible book value. “Citi is the one stone that investors haven’t turned over,” says John McDonald, Sanford Bernstein’s banking analyst. Don’t expect the stock to hit $10 a share any time soon, let alone bounce back to its 2007 peak of $55 a share. “Yet this tarnished but still attractive global franchise holds the potential to generate nice profits and decent stock gains as the economy turns.”
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A retirement test run
Wondering whether you’re in any shape to retire? said Tara Siegel Bernard in The New York Times. Retirement boot camp may be in order. The idea comes from North Carolina financial advisors Marcia Tillotson and Joy Kenefick, who put clients through a year-long simulation of retirement to help them understand the implications of their decisions and make any necessary adjustments to their plans. The exercise—which you can mimic on your own—requires tracking each and every expense, taking a close look at assets and liabilities, putting a “disproportionate amount of money in tax-deferred accounts,” and making up the difference by drawing down on immediate cash savings. If this fake retirement seems too tough to handle, then you’re not quite ready for the real deal.
