Category: General Commentary

While war in the middle east is always a serious matter, at this point in time, there is no reason to make big portfolio moves based on what we have seen thus far in Iran and Israel. The U.S. is not directly involved and even if we were there likely wouldn’t be dramatic movements in income issues.

The 10 year treasury yield is off just a couple basis points this morning at 4.35%–not much if any ‘flight to safety’–this is somewhat of an indication of what global investors think of the middle east situation.

Unless we see something that is much escalated from what we have seen in the war I plan to continue with my ‘plan’–a slow shift to higher coupon issues. I will know by Sunday evening where I plan to buy next week.

Producer prices (PPI) came in about on target today—that’s good news. The bad news is that uncertainty over tariffs continues–the administration seems to get ‘deals’ started but really is not wrapping them up leaving investors without certainty.

1sts time unemployment came in somewhat elevated from expectations and from levels a few weeks ago. They certainly seem to be pointing to a gradually slowing economy–maybe this is helping to keep inflation tame?

The 10 year treasury is acting positively to the news and to fairly successful 10 year note and 30 year bond auctions–the 10 year trading at 4.37% now which is the low end of the recent range–where it goes from here no one knows.

Of course I am not doing much today–I had my 1 buy for the week on Monday and intend to make 1 buy next week. Our accounts moved to all time highs this morning–we’ll see if the gains hold. Our account incomes have moved higher as we make the slow shift to issues paying more than CDs and money markets–over time I hope it pays off. Having nice dividends and interest coming in is great–BUT one has to hope for stable capital (at least I do with my focus on total return).

Well we got through the consumer price index (CPI) without a problem as numbers came in either on target or slightly better. That is if you believe the numbers since the survey of prices has been cut back because of a shortage of folks to gather them. It is what we have to work with right now so I guess we have to use the numbers released.

In about 15 minutes we will see what happens with the 10 year treasury auction–the offering is for $39 billion in notes. Are buyers out there at current rates?

As I mentioned I am doing nothing–just watching–it is boring, but he right move for me at this time.

The 10 year treasury has barely moved today and is trading right around 4.47% while none of the equity indexes are moving much (plus .2 or .3%) except the Russell 2000 which is up 2/3%. Of course the S&P500 is only 2% (+/-) from record highs so one would expect some sideways movement.

We have the consumer price index (CPI) being released tomorrow which is weighing on investors mind, BUT maybe more importantly we have a 10 year treasury auction happening tomorrow afternoon. We’ll see what buyers are thinking by the demand (or lack of it) for more government debt. This is the most serious hurdle facing us (in my mind)—we have to see serious (and successful) deficit reduction coming out of congress. I see we have some senators being hyper critical of the budget, but we have to see where it ends up and if the hawks cave.

I’m just watching today–since I bought a little yesterday I am content to watch–no hurry whatsoever. My returns on the portfolio are lagging my target, but to try to make risky moves to ‘make up lost ground’ would be a giant mistake–a fool and his money are soon parted and I don’t want to be the fool.

As I mentioned last week I am doing a little buying this week–not lots and lots, but continuing the slow add of what I hope to be rewarding income issues.

My initial thoughts were that I would stay to shorter duration issues, but after some research I went with a perpetual fixed to floating issue.

I added another mREIT preferred AGNC 6.125% (AGNCP) fixed to floating preferred. This issue just went floating a couple months ago–AGNC currently has 4 FTF issues outstanding and 1 fixed rate reset issue which doesn’t reset until 2027.

The AGNCP issue is NOT the highest yielding of the 4 issues, but my intent is to hold long term and if interest rates move lower this will not be the 1st issue called as the spread is somewhat less than some other issues.

I have multiple holdings in the mREIT arena and while the the 9-11% dividends are juicy it goes without saying that being too overweight in a given sector can be costly–and in the case of mREITs the sector will move as one. Thus far the mREIT sector is performing adequately, but in the world we live in things can change fast.