We are now about 8 1/2 months into the 1st year of the Medium Duration Portfolio which can be seen here and the model has performed almost exactly as expected. The portfolio is up 4.13%
Recall that we have always put together model portfolios on our various websites. These serve the primary purpose of educating newer investors to investing in preferred stocks and baby bonds, although they also serve to help us personally determine what will work for us.
In the case of this model we attempt to earn a decent return (not spectacular–just decent–say 6-7%) as compared to municipal bonds, CD’s and other lower yielding instruments.
It is required that securities held in his portfolio have maturity dates or mandatory redemption dates within 10 years–although we would prefer 5 years.
Issues within the portfolio are not traded unless there is an obvious reason to do so. This is because most investors do not either have time or do not have the desire to trade day to day–they are happy with a fair return. No capital gains are likely to be realized in the portfolio.
We should note that there is 1 issue, the Gabelli Go Anywhere Fund preferred–GGO-A, is a puttable preferred–without a maturity date. We are able to hold shares in this portfolio as we may ‘put’ them to Gabelli in either 2019 or 2021 for $40/share. After 2021 the shares become perpetual.
We have just finished a quick review of this portfolio and do not see any reason to make any changes in the portfolio at this point in time.