I always have blind spots in my investing–my wife sometimes tells me I miss the obvious–she probably is right. I have always loved and owned term preferreds–and one right under my nose was in my wheelhouse, but I didn’t own it.
Last night as I was doing some spreadsheet updating I noticed the Gladstone Land 5% term preferred (LANDM) was trading where I could capture a 8%+ year to mandatory redemption. Exactly what I want for my mid risk bucket. Gladstone Land is a farming REIT–agricultural land is something I can relate to and understand–honestly the financials of both LAND and Farmland Partners (FPI) are pretty iffy–I don’t want their common shares. FPI is trading below where they came public almost 10 years ago.
Mandatory redemption on this issue is 1/31/2026 and I paid $23.47/share. It is a monthly payer with a current yield of 5.34%.
For newer investors–baby bonds and term preferreds that are nearing their call/redemption date will tend to move less in share price in reaction to interest rates since there is a date certain for return of your capital. Of course this all assume the issuer is solvent.
If this issue holds at this level through the month I may buy more when funds become available.
As always it will be added to the laundry list of holdings.
I had a ‘friend’ who sold 8 pfds at deep tax losses. He really didn’t;t want to! We repurchased 1/2 of each after 6 weeks or so. Then…they moved down agin!
I looked yesterday he’s back in the black on the repurchases!!
Unfortunately, it takes a lot to make up for the sold tax losses. This might be me in 10 years where I would be glued to the screen and looking at the red and black every hour of the day and wanting to touch the dials and fidget buttons. If I do that, i would fall in the camp of buy high and sell low. I think many have posted good trading rules to follow by. One that I live by is that if it was a good enough investment in the first place (insert many metrics here…) then it should be a good investment x months down the road. Another one is that don’t buy anything you wouldn’t hold long term.
The other side of this though… is that investors flipping their losses and selling all the way down gives me opportunities. It was fun to get some great additions at $18/share. Was better when they hit $17 and then $16, etc. Emotional trading is great to take advantage of. Now have to think do i sell more of these that skyrocketed $3-4$ per share and rotate into sound issues that are near par.
If the fundamentals and underlying metrics of how sound the investment is hasn’t changed… why sell it? I think investors buy into the idea, but as soon as they start seeing red for awhile they ignore the rules. You have to follow rules or you are then emotionally trading and that usually doesnt work out if you invest your whole portfolio that way. Then if you turn right around and start buying them on the way back up to the top, you gain some small gains, but you miss the elevator ride up. Sound investments usually go down for a span of time, but the rise is fast and furious.
Another rule to add is don’t buy something you don’t understand.
Mr conservative, there has been an on going discussion here about selling our winners to lock in profits and moving over to sound issues that are at par.
If you bought originally to take advantage of a sound stock that had dropped like the bank issues that Tex listed why sell?
Your’re up on most of your investments as to income and you shouldn’t have bought them in the first place unless you did plan on flipping. You must have considered them sound to begin with.
Personal experience, I bought a boatload of SCE-L and I sold some to lock in profit and am now down on income. But why did I sell? because I had more than I wanted as part of my overall holdings. I wanted to diversify and move to something else. Do I regret it ? yes to a certain extent, but I am hoping to replace the income and not be so concentrated in one stock.
If I never bought anything I didn’t understand I’d never buy any of this stuff.
There’s a couple issues coming up for 2026 maturity with nice YTM %. GAINN is 8%+. And ATLCL is over 10%.
Thanks FL_Guy–will check them out for tomorrow. Lots of CD money coming in tomorrow.
For 2026, I kind of like PRIF-G and PRIF-H. I do have a tiny bit of ATLCL, but I’m not sure why.
Of course there’s RILYK if you’re feeling lucky.
Well, I overlooked this one too! Bought myself a position and put it away until the mandatory call. I will take 8%+ overall return most any day!
dj–I get so caught up in running the website–look at all this stuff 6 hours a day and still miss good deals.
Hi Tim- curious why you buy LANDM pref shares when you stated “the financials are pretty iffy”…thanks!
FYI, last year 66 percent of distributions were ROC, with the rest being dividend income. Since I owned in an income trust, sold as soon as I saw the breakdown.
Crimson – my stock holdings are all in IRAs – my funds outside of those IRAs ae all in fixed income.