Author: Innovative Income Investor

I’ve been looking around for something to buy—obviously a term preferred or baby bond with a maturity out a year or so. Certainly there is not much out there and my #1 favorite (XAI Octagon – 6.50% term preferred (XFLT-A)) doesn’t move lower and I already have maybe a 200% of normal position–have to resist going crazy.

Accounts are a tiny bit red today–just a tiny bit though as lower interest rates have helped to balance out macro downward movements. Honestly I have been somewhat surprised that we haven’t had that ‘baby out with the bath water moment’—it could come at any time-one never knows.

The 10 year yield is down sharply–off 10 basis points to 4.21%. No doubt that recession fears are taking hold. Equities just can’t get anything going–they keep trying to move higher–but sellers move right in to drive prices lower.

Well let’s see if we get a wild afternoon–or do we finally get a turn in stocks?

Today we had the ‘official’ government employment report which came in acceptable–little soft to forecast and the unemployment rate rose from 4% to 4.1%. Markets have moved both ways in reaction, but now equities are down 1/3% and the 10 year treasury is off 3 basis points. Obviously the employment market is softening–and I expect this will continue.

While I didn’t intend to do any buying late this week I did go ahead and take a tiny new position of the Gladstone Lane 5% term preferred (LANDM). This issue has a mandatory redemption on 1/31/2026. My buy had to be tiny as no one wants to sell and I am not overpaying for shares–my buy was all of 105 shares which doesn’t really move the needle. I may buy some more if I can get it cheaper than $24.75 (a little over 6% yield to maturity). NOTE that I had previously owned this issue and sold for pretty good capital gains 11/2024 @ $24.98.

This buy is simply a furthering of a CD replacement. Someone mentioned it yesterday in comments so I went ahead and ‘borrowed’ their idea. I really need to do more of this using short duration term preferreds and baby bonds–it may take awhile since these issues are many times extremely illiquid. We’ll see what I can do in the weekend ahead.

These market movement are a bit stressing and today a little bit of pain is being felt in preferreds and baby bonds. Our accounts are off a bit – really wiggles more or less–the Fido account shows the month being off <.01%—thats a really nothing number. I don’t recommend watching portfolios this closely, but it is what I do and have for decades (at least since the beginning of the internet-and even before the internet with a direct dial up phone link to the WSJ).

The 10 year treasury has bounced 5 basis points to 4.31%–we up 20 basis points since the low point on Tuesday.

The S&P500 has been all over the map–spiking sharply higher when the Mexico tariff pause was announced–the spike lasted about 2 minutes when the fast money bailed and down we go–now off 1.80% on the day–at the low of the day.

Now I am expecting some sort of announcement on Canada yet this week–for better or worse-who knows?

Certainly I won’t be involved in markets today–too much noise and I can’t really buy anything except the old standbys (CD and MM). I have not sold a thing and don’t plan to–more likely I would add to a short duration baby bond–something that has fallen a quarter or 50 cents.

Jobless claims came in today about where expected–maybe even below forecast. The Challenger lay off report came in higher than we have seen for years–at 172,000 versus last month around 50,000. DOGE related maybe.

Well I will get back to watching the ‘show’ and hope for a bounce.