I’ve been waiting all day for the ‘dead cat bounce’ in common shares but thus far no bounce is lasting more than 5 minutes—for the time being some serious profit taking has been taking place in tech shares (i.e. Nvidia).
Fortunately interest rates have set back 5 basis points which keeps all the income securities pretty flat on the day. While I have a little dry powder in the accounts I don’t plan to do anything today except watch–I am really anxious to get some employment numbers later this week. As I have mentioned I think (right or wrong) this will drive the September rate cut–Jay Powell has pretty much backed himself into a corner for a cut and so it is just a matter of whether it is 1/4 or 1/2%. Would the FOMC be brave enough to hold rates steady no matter the data? I don’t think so, but who knows for sure.
I have pondered selling a couple different issues in the near future–some I have tremendous gains in, but if I can’t replace the coupon don’t know whether it is wise to sell. For instance in 1 account I have a 24% capital gain in the Jackson Financial 8% fixed rate reset perpetual (JXN-A) and it is trading at $26.51. The issue becomes redeemable on 3/30/2028 so at some point in time it will max out the capital gain as it will trend (over time) back toward $25. Always a quandary. Maybe I will simply let go of 1/2 the position—we’ll see. Of note is the issue goes ex-dividend on Wednesday for 50 cents.
Well I see stocks are heading even lower–an unusual day to a trend one way or the other without even a modest countertrend move–but maybe today we go lower right into the close.
Futures market is in the red. Overnight Asian and European markets closed in the RED. Crude futures are attempting to make a weak recovery.
Everyone hold onto your hats, This roller coaster is in for a bumpy ride.
Yesterday I was the bird, today I may be the statue.
Found Treasury bond or MMF Alternative . Cashed out with nice profits about 15% from my accounts before last weekend . Sold mostly Preferreds, Sub-Notes, Preferred ETFFs CEFs and even long dated bonds . Put most of the proceeds in IBTE- 2024 Term Treasury bond ETF – 5.15% YTM in 4 months . It terminates this December . Should pay more than MMF soon ( when FED cuts rates ) and it’s increasing distribution every month . I also like to hold those as RMD supply source at the end of the year . IBTF – 12/2025 Term 4.5% YTM , IBTG -12/2026 Term 4.01% YTM . Pros – paying distribution monthly , taxed like treasury and trades like an ETF , Cons – no interest accrual like MMF or savings account
Or you could, you know, buy Treasury bills directly in your brokerage account.
it was a good day to watch, most days, I think, in that category
Replace it with gold
Some gold stocks were off 2-4% today – isn’t it supposed to move opposite?
If you invest in quality investments, or index funds, add diversity, there really is no need to play with the fidget spinner and buy a few shares of this, sell a few shares of that, unless it is for the spice of life. Time in the market sets us up for success. It doesnt really matter to what the Fed, or yakkers, or CNN or … say. Just look at your watch lists for value opportunities to re-invest your cash or swap from A to B because of value opportunities.
Why waste precious time in looking at what the #’s are for unemployment, or housing starts, or …. enjoy life and have your money work for you. You shouldnt have to worry about your investments unless you faltered and said, “well let me juice my returns with the 8-12% investment”, and then… you are watching it, looking for daily bad news, so that you can exit it if need to, hitting the refresh button and seeing if it is red or black, or reading daily news to see if there is a hit story on the investment. Why the stress?
Mr C—I am tempted to ‘juice my returns’ daily but generally manage to avoid the urge. By the way great advice you give.
What I texted to a friend on Saturday:
“Will summer mkt doldrums end after Labor Day?”
NVDA -9%, crude -4.4%, SPX -2.3%, JNK -0.4%
Some days you are the bird and other days you are the statue
It’s just one of those days you can’t explain
When nothing’s right or wrong
Too much wine or not enough
So you just play along.
There’s no rhyme or reason
Ain’t a damn thing you can do
Some days you write the song
Some days the song writes you.
I beg to differ. With the PE of the market at 22 coming into September, there’s plenty of reasons for attrition. Think the S&P was up over 17 (18.7?) thru Friday. That alone is reason enough to sell. And selling begets selling. The last gut check was just a warm up!!
NVDA was down 70% from its high in 2022. Would the average investor be willing to gut thru that? Shades of cisco abound. Its still below its 2000 high.
Azure-
Sayeth St Francis of Assisi.
I’m taking the strategy of just dollar cost averaging drips and drabs on down days so I picked up a few hundred BIP-B. 7% is good enough for me. It’s possible stuff can always go lower but it’s highly likely we will eventually go to a sub 3% neutral rate. I’m no good at timing the market, only being neglectful and holding forever.
Gold is breaking 2,500 and oil is close to breaking 70 a barrel in the futures market.
Tim is expressing the same quandary others and myself here have expressed, for if you sell what do you replace it with?
My other issue was raising cash for a possible drop this month or next and I looked at selling some of my weaker holdings. If I have been getting $500.00 a qtr. from 50 shares I had bought at a yield of 7 or 8 % could I sell and buy 150 shares with a 6% yield and get the same income?
Just in general, people have been busy buying up preferred and lowering the yield. So it’s been a problem finding replacements if I sell.