Income Securities Hang Tough

Yesterdays wild stock market ride didn’t carry over to most income issues thus far and for that we are thankful.

Utilities were actually up a little and REITs only fell 1/2%. Preferreds and baby bonds did fall a penny or so.

The positive of a sharp equity market fall is that a ‘flight to safety’ pushes bond prices up, thus lowering interest rates. It was a short 36 hours ago the 10 year treasury was at 2.90% and yet yesterday it traded as low as 2.81%. At this moment the 10 year is at 2.84%. I don’t think at this point in time we can say anything at all has changed in the interest rate complex and we still expect a 3.25% 10 year before the year is out, but with so many cross currents anything is possible.

As I write the DJIA is off by about 90 points indicating a weak opening–which is kind of meaningless since the markets can swing by 100’s of points hourly. My hope is for stabilizing stocks markets because continued sharp sell offs will eventually spill over to our income issues and the year already is plenty difficult.

Yesterday our personal accounts were up 1/10th of a percent which I consider a victory, but only this month will our portfolios likely turn positive on the year when dividends are received on the 31st.

Investors need to continue to stay calm as all of the various situations unfold (i.e. tariffs etc). Having a bit of dry powder is not a bad idea ‘just in case’. Obviously there are plenty of nervous folks out there they could serve us some real bargains in any sort of panic.

3 thoughts on “Income Securities Hang Tough”

  1. The 10yr seems to take 1 step forward and 3 back. Either that or it’s just plain drunk, stammering around.

    You mentioned last week or so, Tim, that you were looking to see the dust settle before doing some buying. Still seeing a lot of dust in the air and any clue on what that 10yr rate would be before you’d consider that dust settled, if only a little bit?

    Been adding a few small lots to the portfolio in TSCLL, RILYG, and SPKEP. Grabbed some of the lots before the Fed announcement and up they’ve gone.

  2. Hi GW–just posted a modest purchase.

    Am taking the weekend to look deeper in CAI preferred. I am having second thoughts because of the tariff situation. Obviously when you lease a million containers you need a bunch of international trade to succeed.

    1. Thanks for update, Tim I wont own shippers as in Seaspan float the ocean shipper types…. Shipper cargos never paid much attention too. Havent decided yet if buying is a violation of my investing laws. Would hate to spend 5 years in “The Pen” doing hard time if it was deemed a law breaking offense.
      I may have to pass here.

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