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Goldilocks Remains in the House

Well Bank of America (BAC) is out with earnings this morning and as expected their numbers were very good–of course I am most interested in the small banks instead of the mega banks.The community/regional banks will pay me 2% more on their preferred issues and I think the risk/reward proposition is pretty good in the 7.5% to 8% current yields.  I am adding a  bit to some of my current regional/community bank holdings this morning–my current holdings are small and my adds very modest. My laundry list of holdings is here. All the banks are listed here.

Yesterday was a quiet, but positive day in equities–perfect for me. My portfolios were green, but flat is ok with me – nice interest and dividend payments coming in multiple times a month.  I really construct holdings for the best yield consistent with my risk tolerance level – capital gains are just ‘gravy’.

While it hasn’t gotten huge amounts of press in the last week interest rates have moved sharply higher–the 10 year at 3.59% is 30 basis points above 10 days ago.  The 2 year treasury note has really zoomed higher–now at 4.18% almost 40 basis points higher.  Of course these rates pale compared to a couple months ago so everything is relative–it has only been 7 weeks since the 2 year was at 5%.

Yesterday we had little important economic news.  Empire State Manufacturing came in very strong relative to expectations, while home builder confidence came in as expected and slightly up from last month.  Today we had housing starts and building permit data being released–housing starts about on target and permits somewhat soft. Likely these numbers are not market movers.

Markets are somewhat green this morning, let’s see if they hold their gains.

10 thoughts on “Goldilocks Remains in the House”

  1. There was an interesting article – I think it was from earlier today – on yahoo finance that discussed BAC’s portfolio of bonds being held to maturity. It looked like they have a really big chunk of bonds that are quite a bit under water from their purchase price, which they get to carry on their books as if they haven’t dropped in value, but, of course, if BAC had to sell them to raise cash, they’d take a decent haircut. Has anyone done a deeper dive into BAC’s numbers – are they as “safe” a big bank as is generally perceived?

  2. I see conflicting information about LNC.PD dividend….Seeking Alpha states it isn’t paying a dividend; Fidelity shows it is; I’m asking since it’s part of your (Tim) holdings and it looks like a good one…presuming the dividend is there now and expected to be going forward. Thanks for Innovative Income Investor, which after reading for some weeks now has totally convinced me a donation is in order and that will happen today!

    1. If LNC-D is a recent new issue, that may be the reason. It usually takes a couple of dividend payments for the automated systems to catch up.

    2. Dave; Good choice on making a donation to this site for Tim’s efforts. Many of us long time users have pestered Tim for years to accept some form of donations. He was able to implement a system for contributions just about 4 months ago. After all, his grandkids are not getting any younger and those college tuition payments are getting closer and closer!!! All the best to you.

      1. Thanks, Gary – glad Tim was convinced; hard to find great quality information with a readership to match; I look forward to continuing my support; for one thing, I have grandkids too – I get it! Best.

  3. I had a few partial fills yesterday and I was surprised that happened so might have some GTC set too high.
    I bought some of the SPNT B on your buy list the past couple days after it dropped on panic sells when it was announced Third Point offered to buy SPNT a little over 4 weeks to next x-dividend date.

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