A million times we have all heard ‘it’s a marathon, not a sprint’—ugh I have heard this way too much, but it does pretty well describe the last 20 years of my more than 52 years of investing. Unfortunately most of us start the race sprinting, before we learn we need to pace ourselves a bit and have some patience. If only I knew 52 years ago what I know now I’d be a whole lot wealthier.
Now I try to be a lot more thoughtful when investing–not thinking for a minute I am out to hit home runs–I want my 7-7.5%. If I don’t even open my accounts on a given day that is just fine. Most days I generally look at an investor presentation or peruse a couple 10 Q’s–most days I don’t act on them–that is fine.
Speaking of investor presentations Associated Banc-Corp (ASB) had one out a few weeks ago which I had missed–it is here. The banker has 2 fixed rate preferreds outstanding with current yields around 9%.
A couple items of note in the ‘headlines of interest’ last night were that Tsakos Energy Navigation (TNP) has called for redemption of their 8.75% perpetual (TNP-D) on July 7th. Additionally mREITs Arlington Asset (AAIC) and Ellington Financial (EFC) announced they will be merging–both of then have preferred stock outstanding.
I see 30 year mortgage rates are at 7.11% now (per Bankrate) – are these peaking? We should hope so. In the real estate purchase market we have 2 very different buyers today. We have a large share of the purchases being bought with just 5-10% down payments and then we have a share – maybe 10% of buyers are older with wealth and they pay cash. Honestly I don’t think the modest end of the market can handle much higher mortgage rates–we would see substantial damage to home building. Yesterday we had Case-Schiller home price index show a drop of 1% year over year. Some of the markets which went straight up have now dropped sharply in value (i.e. Boise ID, Austin TX etc)–doesn’t matter to the buyers who used cash–totally sinks buyers with 5% down (in terms of equity).
Equity markets are looking soft this morning with the S&P500 off 1/2%, but interest rates are down again with the 10 year treasury yield at 3.64%–down 16-17 basis points in a couple days.
Today we have the JOLTs (Job openings and labor turnover) report at 9 a.m. (central)–this has been working its way down from the 11 million job openings area to now around 9.5 million now–still plenty of job openings (assuming you actually buy the number is what it is).