While a DJIA tumble of 300 is really not much at all compared to giant falls like in 1987, it does create excitement for the talking heads on CNBC who seem to think investors are entitled to never ending stock price indexes.
I personally am almost always more tuned into interest rates since I believe it is a more reliable indicator of economic strength or weakness. Todays reversal of interest rates (opening at 1.725%-climbing to 1.76% and then plunging to 1.61% on weak economic data) pretty much mirrors my thoughts on where we are heading–a slow motion slowing of the economy. While economic data has shown an “adequate” amount of U.S. growth I think we now going to start heading in the other direction-slowly.
All kinds of external forces are going to start to take a toll. The Chinese trade wars, strikes at General Motors, never ending softness in European economies, never ending political turmoil and on and on. I guess in the olden days we said the market will “climb the wall of worry”, but I am believing more and more that we are not going to climb that wall, but instead are going to run smack dab into the wall.
Anyway regardless of where stocks and interest rates head as income investors we just continue to look for yield that meets our needs. Maybe we do a few flips here and there to add an extra $100 or 2 to our wallets.
Today we tried to pick up a few hundred more shares of the WR Berkley 5.625% (WRB-B) notes as they fell to $25.08 yesterday. As I suspected shares opened up in the $25.20’s at which point we simply left a low limit order in place in case someone wanted to hand us some bargain shares.
We watched as folks discussed the Teekay Offshore Preferred issues which are spiking based on a Brookfield Business Partners buyout of Teekay Offshore (TOO)–the preferreds outstanding can be seen here. The preferred are to remain outstanding per the press release from Teekay so if one is adventuresome there may be more “meat on the bone” of these issues.
Some other big news is Schwab ending commissions on stock trades. While this is a welcome bit of news to investors I personally am less concerned with saving $4-5 for a trade then I am about whether I can access new issues etc. Saving 1 cent/share falls into category of meaningless for me–just give me a good execution and don’t hassle me on new issues.