We are now finally at a point where preferred and baby bond pricing equals a year ago. During the course of 2023 we have been as much as about 10% higher than we were on 11/1/2023 (it was way back in January), but these move have given opportunity.
The market movement has given us chances to do some profit taking and some repositioning. For me it was some profit taking and then purchases of some CDs at attractive yields. Of course we all wish we had 100% preferred and baby bonds during November which saw the average price rise about 5%–but trying to time every last wiggle is somewhat of a ‘fools errand’–although we still try a bit.
My accounts are now at all time highs–2023 has been a banner year–but after 2022 we needed a banner year to catch up.
Some may remember years ago when we had these 20% downdrafts in income issues–newer folks would bail out and hide their stash in a mayonaise jar in the back yard–during those times of zero interest rates switching to CDs etc was not much of an option. The folks that panic and bail out usually are those that practice ‘buy high – sell low’ and vow to never buy preferreds and baby bonds.
From what I have been reading from our regular group of commentors folks have experienced some great gains in 2023–congratulations on not bailing out.
No doubt 2024 will be another challenge–they all are, but if we have flat to slightly lower interest rates 10% returns would be in sight.