Tex the 2nd posted some comments last week that made me think about how the ‘buy and hold’ person (of purely preferreds and baby bonds) would have faired over the course of the last 2 years. This would have been through the Fed interest rate hiking cycle.
We know that there are many factors that go into portfolio performance. Those that held lots of short maturity baby bonds or term preferreds would have seen less of a drawdown in capital than the ‘average’ $25 issue. Those that lightened up on preferreds and baby bonds as rate hikes began and moved to cash equivalents would of seen less downward pressure than the ‘average’. And of course folks hold diversified portfolios–i.e common stocks. Just lots of factors.
The chart below shows the ‘average’ $25/share issue (preferred and baby bond) price over the last 2 years. Obviously some issues have been called and new ones issued which would affect the averages–but all in all I don’t think these factors have been major factors to the big average.
I believe that most folks here — at least those that have been active on the messages boards have soundly trounced the ‘average’ issue since many of us are at or moving nicely above portfolio all time highs. Note that the ‘average’ price shown above does not account for any dividends or interest paid thus performance would have been better than depicted.