We are watching the quality preferred stocks–you know the ones–those issued by CEFs, banks and insurance companies and REITs such as Public Storage–generally investment grade. There has been plenty of pain dealt out in these issues.
Our ‘sorted by share price losses’ list here shows they are still being spanked. We would kind of guess that those issues that were sold earlier this year with coupons of 5%-5.50% are now closing in on 6% current yields in many cases. Certainly closer to where we would like to buy them–BUT with our personal outlook for somewhat higher interest rates in the next 3-6 months we think they will present better bargains later.
On the other hand for those that simply want SAFETY–NOT so sensitive to net asset value erosion this could be time to add a bit to positions.