Yesterday was a very good day for income investors–about time we had one to help recoup some of the losses from the past number of months.
Of course the rally was nice for portfolio balances, but it would have been better if I held 100% baby bonds and preferreds, which were up 1-3%, but given less than 50% of my portfolios are in those segments my portfolio was up 1/2%. But those getting the best gains are starting from a much lower level as their portfolios have been hammered hard in the last year.
So have we seen the last hike and have we seen a peak in interest rates for the next 6 months or so? Maybe—firmly a maybe. No one can answer this question with certainty, but it seems to me in the shorter term (less than 6 months or a year) one needs to do a little buying, which is what I will be doing today. I say a little because my dry powder is minimal at this moment. I will write a blurb later today when I figure out what to buy.
My Uhaul Investors Club holdings are getting a much better return nowadays. Recall, for those familiar with the club, that the coupons available 3 years ago were down in the 1.5% to 2.5% area–now 4.5% to 5%. Finally most of my 1.5% holdings are maturing and I have rolled them up to triple the coupon for 3 years. Actually still a substandard coupon, but I like having money spread around and this is a pretty minor portion of our holdings
This morning the 10 year treasury is at 4.71% and holding—if I was one looking for a safe 5 or 5.5% I would probably get some CDs now. I checked the rates on CDs last night and the best was holding around 5.75%–but I suspect this will fade away today or tomorrow. I have plenty of these already and will likely not be rolling over this money into new CDs–but who knows–we’ll see.
Equities are up a bit 1/3 to 1/2% at 6 a.m. (central)–we’ll see if the party continues today–we all know that directions can change in a nanosecond. Economic news is minimal today–we have the weekly jobless claims and this is always interesting – 214,000 initial claims are expected–I am always looking for higher numbers indicating a softening job market–we’ll see what happens.