Well the open today will be really lousy–down over 1000 points–futures are halted, but ETF trading continues and it looks like a 5-7% down open.
Yesterday I bought the Interstate Power and Light 5.1% (IPLDP) perpetual—the issue is now redeemable, but I paid only $24.90.
I sold a bit yesterday also – I want maximum cash levels when we hit the bottom (whenever this will be). As the days have gone by and purchases are made I have off loaded some perpetuals, although I don’t own too much of these. Essentially recycling cash to remain at high levels.
I had mentioned that on Tuesday I sold the little bit of Golar LNG 8.75% perpetual (GMLPP) I had–which was obviously a big mistake. Also I sold Brookfield Property REIT 6.375% (BPYUP) perpetual.
Income investors should be continuing to build shopping lists–but there is no way we are at the bottom yet–and there is a high probability that some preferred and baby bond issuers are going to have substantial financial pain through the balance of the year and may suspend dividends for a few quarters.
Here is a list of Lodging REIT preferreds–some of these companies may well suspend dividends later in the year—they are all cumulative and I might be a buyer at much lower levels–months from now. On the other hand I wouldn’t touch Sotherly or Ashford issues.
So the bottom line is I continue to watch and add the highest quality issues. I trim around the edges to keep high levels of cash.
Some investors should be doing some selling to the point that they can sleep at night—while others with very large stashes (more than they will ever need) will likely be holding and/or buying bargains–but the bottom line is we will continue to see better bargains in the future.