As previously noted I had 8% of my total portfolio value in CDs and treasuries which matured in June–well the coin came in and I immediately locked down some CDs in the 5.25-5.5% area (9 month to 1 year) with 1/2 the proceeds. It is very difficult to pass up these yields so I didn’t, but left plenty of dry powder in the accounts to do a little bit of nibbling once again.
I am targeting the community bankers for some nibbling–mainly adding to issues that are already in the portfolio. Nervous nellies continue to give us opportunities–my favorite continues to be Bridgewater Bank 5.875% Preferred (BWBBP) which is a small $4 billion community banker. Right now I find this the most enticing risk/reward issue–obviously I will not get carried away because of the macro economic issues. BWP will report earning later this month which will add clarity–but if one waits for the clarity the largest share of potential capital gains will be behind us. The issue is now trading at $16.60 for a current yield of just under 9%–I will place a good til cancelled order in at a level 3-4% under current levels, but will nibble a little right here as certainly 8.92% is a great yield.
Today we have the release of the FOMC minutes from June – obviously old news being released, but markets almost always react to these releases. Equities are soft this morning with prices off about 1/2%, but still near 52 week highs as markets have climbed the ‘wall of worry’. Interest rates are relatively flat at levels from Monday in the 3.85% area.
Looking over our holdings this weekend it looks like we are up around 5% YTD–this is off about 1.5% from the highs for the year. With my goals now at 7.5% I should easily hit the goal–BUT we all know that markets can change in a nanosecond and gains can go to losses so we will count gains after they are made–not speculate on the future. Of course one could go to all CDs and treasury’s and lock in coupons of 5 – 5.50% in, but those rates will go away sooner or later and locking in 8-9% in on some perpetual preferreds can last for a number of years.