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A Day For a Little Buying

With markets partying a little today I took the opportunity to add a couple more percent to my investments.

mREIT New Residential Investment Trust (NRZ) had some good news today so I bought some of the New Residential Investment 7.125% FTF preferred (NRZ-B). This one has a floating rate period which is more than 4 years out–I am avoiding close by FTF issues because of the .75% 3 month Libor. This NRZ issue plays in to my attempt to lock in 7-8% current yields–this one has a 9.42% current yield–obvious plenty of risk as well.

I added some more DTE Energy 5.375% baby bonds (DTJ)–I had a position, but at $25.12 it was reasonable to add more at the right price (it becomes callable 6/21).

Lastly I added some IHTA–the Invesco 2024 Term Trust at $6.25 which is at a current yield of around 9% right now. This is a portfolio of BBB- (low investment grade) quality commercial mortgages. Certainly risk with commercial mortgages going unpaid. The net asset value is now $6.79–quite a drop in the last few months from around $10 2 months ago. The dividend has not yet been cut–it pays 4.67 cents/month and it would not be surprising to see a cut soon. The trust target is to redeem at $9.835 in 2024–looks dicey at the moment, but we’ll see.

So with my additions I am nearing 70% invested. Plenty of dry powder awaiting further developments in the mREITs and lodging REIT preferreds.

I think that right now I am above 7.5% on the portfolio yield (based on my cost). Many of the utility baby bonds and CEF preferreds I bought 10-25% below current values which gives me a high quality portfolio. I have balanced the high quality issues with the dicier issues–TWO, NRZ, HT and NLY preferreds and other such issues.

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