Author: Innovative Income Investor

We have almost daily chaotic events in the government and interest rates which are pretty stubborn about coming down–YET equities are still near record highs. The S&P500 closed yesterday 6115–against a record close of 6128. Crazy strength given the uncertainties that surround us.

Today I will be buying a fixed rate reset preferred–one that is very likely to be called in July–thus only 2 dividend payments. The Wintrust Financial 6.875% issue (WTFCP) gets reset in July at the rate of they 5 year Treasury plus a spread of 6.507%–I don’t think there is any way that this strong banker lets the rate get reset to the 11% area–of course maybe one would be lucky and get an extra quarter of high yield. Of course this is a temporary play intended to get a slightly better return than CDs and money market.

I continue to debate with myself adding a nibble more of a fixed to floating rate mREIT preferred of which I already own numerous issues, BUT I always remain cautious about going over board on high yield–they are high yield for a reason. Earnings released from the mREIT issues have remained pretty darned good, but one knows how fast this can change. My understanding of all the moving parts of these companies is not the best–I can slice and dice the financials of General Motors, General Mills or equity REITS with the best of them, but not so with the mREITs.

I look at perpetuals and so badly want to buy some–but why? To buy more perpetuals at this time I have to be able to convince myself that there is a capital gains component–and I sure am not certain that now is the time–certainly a view that reflects my conservative nature.

Retail sales just came out and they were soft–not really a market moving number though although the 10 year Treasury is of a basis points or two at 4.49%–we’ll see if these rates can break out of the bottom at 4.40% or if we are stuck around 4.50% for the balance of the month.

Don’t forget that markets are closed on Monday for Presidents day.

Interest rates are tumbling this morning by 10 basis points in spite of a producer price index (PPI) that came in warmer than expected. I don’t personally see the reason for the tumble–but lower is always better for us income investors.

Not planning to do anything today–I have been out of office this morning for a few hours AND very early this morning I had messed up the website while trying to do some work I should leave to the technical people–I now turned it over to them to complete. Also I have to be out of the office this afternoon so am not going to willy nilly buy/sell.

Right now we don’t have any of the most important pieces of economic news (CPI, PPI, GDP or PCE) for a couple weeks so maybe we will have some relative calm in the markets (famous last words) and I can figure out what to do next.