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).
I have two accounts. One for my wife and one for myself. These are not retirement accounts. While they do have some stocks, ETFs, MLPs, etc.. they are heavy preferred/baby bonds. Yea.. the accounts have lost value. Anything fixed income is down besides a few exceptions that we discuss here. That was bound to happen when you buy and hold for the most part.
The income is up though. Just reinvest the income, add a bit here and there, and plug away at it. I had a couple of stinkers that I had to let go that stopped paying which hurts but in a few months time the income rolls in to make up for it. I say to myself that was a mistake and then purchase higher quality additions (which often pay less but lessons learned). I take slugs of some new issues like ALL, JXN, LNC, etc.. for example which I cannot seem to resist.
I keep an eye on this forum, read SA (admit it.. we mostly all do 😉 ), and other news as well. This is a very long game I am playing as I have decades to go (hopefully)! So it is what it is. I guess the key is to purchase securities that do not cause stress. You want to be able to walk away from the laptop/news for a month and not worry. I need to improve on that over time some more.
My local news radio station KCBS runs a loop on local news so if you don’t get it the first time keep listening. The Bay area Rapid Transit ( BART) is down 60% in ridership. Think about that a minute. They are pleading with the state government for 5B dollars to hold them for a couple years. A recent survey done says its not due to people working remote and not needing to commute but that is a contributing factor. In the 2yrs since Covid, urban planning has been upended. A survey said almost 75% of the people don’t think public transit is safe, clean and illegal behavior has increased.
Was wondering why the traffic has been so bad. Everyone rediscovered the safety and comfort of their cars.
But traffic is down a lot in San Francisco. The idea of starting to charge drivers to go into downtown at peak commute times has been dropped by city government. They need the people back to support business!
I expect REITS to lose more tenants in downtown commercial buildings.
Haha!! I try to remind myself whenever I am ‘time shifting’ that the opportunity is in today not yesterday! When 08-09 crisis hit we were so upset with what we could have done yesterday……we missed what we could do today. We’ve had 3 suck out low bottoms in pfds over past six months, was I ready?
Thats why I built my own solvency list of institutions. When their issues hit my buy point, I remind myself that they are in the top of their class what am i waiting for?
Perhaps waiting for the usual stampede?
No problem waiting for the Biden/McCarthy head butting to be over.