Author: Innovative Income Investor

The geopolitical events in Russia and Ukraine are causing a bit of a move to the ‘safety trade’ as the 10 year Treasury interest rates heads lower–it is trading at 4.37% down from yesterdays close of 4.41%. Equity indexes are lower by .3%. Neither moves are giant sized, but they are a taste of what may come in the next number of weeks and months –just what we need is another factor to move prices around (not really).

Whether it is geopolitical events or economic events that move markets my actions won’t change much–if any. At this time I simply am not going to buy perpetual preferreds or extremely long dated baby bonds –my preference is to not lose capital and for the time being the threat of higher rates means potential capital losses. The losses I have taken in the last month or so have been in perpetual preferreds–they down as much as 4-8%. Percentage wise the Brighthouse 5.37% (BHFAN) perpetual preferred is trading around $19.15 which is down from $21.30 6 weeks ago. With the current yield just over 7% I am tempted to buy more–BUT I won’t right now—maybe it will be $18 next month. For those looking for a solid income stream this might be a good one right now even with a threat of capital loss.

Money market and CD rates are holding fairly firm at 4.5% to 4.7% depending on terms. Not a bad yield relative to a decade of zero and a good ‘hiding spot’. A good flow of interest payments has kept my portfolio in decent shape–off the highs, but not by much.

Outside of some housing stats there won’t be much economic news today–although the geopolitical events could crop up at any moment. Let’s get the day going and see were the markets take us.

Indiana banker Merchants Bancorp (MBIN) has priced their most recent offering of preferred stock.

The issue prices at 7.625% for 9.2 million shares.

The issue is rated Ba3 by Moodys.

The pricing term sheet can be found here.