I will be adding a new link titled “Sandbox” in the right hand menu.
That link will get you to this page.
I had originally set up the “Reader Initiated Alert” page for ‘alerts’. I was thinking this, for instance, might be when a preferred stock is undergoing a temporary selloff and someone wants to let the population know about it quickly. Of course we all (including me) use the ‘alert’ page for general messaging.
I am requesting that we start using the Sandbox page for all general talk, and try to preserve the ‘alerts’ page for ‘alerts’.
I have had a screen up on one of my monitors all week where I see all comments – no matter where they are posted–it is a great page and I wish everyone had a page like that–believe me we all benefit from all the knowledge being shared. I don’t want to stifle any of the exchange of knowledge, but hope to get things a bit better organized by adding the Sandbox page.
So trying to make some lists here with credit under pressure.
What are everyone’s favorite QDI qualified securities at the current moment?
I have my tax-deferred accounts pretty much allocated to no-qdi stuff, so looking at my taxable accounts for opportunities. I do own SPNT-B as someone mentioned. I also own some BNJ, BIPI, BEPI/H, MS-E, CODI-B, but looking for more options to consider if we continue to selloff.
Thanks, Z
CTA.PB
MET.PF
ALL.PI
ATH.PD
Most likely never to be called. I use them as sort of annuities without the fees.
Maybe look at the illiquid utilities.
Do the two CHS items below $25. work.
Have been adding to CHSCM… and CHSCN $24.40 ~ $24.60 area .
Ex June 13
Jim I added the CHSCN yesterday and now the water level is up to the gunwales. Hope I don’t get swamped and sink.
Look at the CMS baby bonds.
CMSA, CMSC and CMSD. There is a CMSC preferred too. Be sure you don’t get the ticker mixed and buy the preferred if you want the baby bond. If you choose to buy them at all.
Lots of others to look at out there I am sure.
If you are looking to boost your returns, I picked up a bunch of SCE-M over the last while below $23. QDI, callable 11/28, paying over 8%.
Company is a California Utility and may have been involved in the LA fires (haven’t seen anything definitive yet). However, other Utilities in CA have caused huge fires, burned entire towns, killed hundreds of people and have even been convicted of criminal offenses, yet they have come out fine. PCG went through bankruptcy twice and their preferreds actually went up.
CA is a strange place for utilities. The state gov. goes to extraordinary lengths to protect the utilities because “we can’t let them go under and leave people without power”. Whole CA state gov is firmly in the utilities’ pockets.
Personally I hate my utility (PCG) in Silicon Valley, but I hold a lot of their preferreds (and flip among them). Might as well make some money from them.
Private that was one I was buying last week. Already holding but added more to a different account. Now in a Roth at 22.75
Credit under pressure? That’s so FRIDAY, lol:
My fav’s GAM-B, BCV-A. Yields at 6% QDI
and rated A+
So much for foreign currencies falling- Yen, Pound, Loonie all increasing in value, and the Swiss franc doing the best.
Friday am on Bloomberg interview … Tony Crescenzi ( PIMCO ) , also added comment on foreign holders as big buyers of our Tsys, and with their dollar holdings declining. . . less incliened to increase US Tsy bidding.
Think I got his quick comment correct.
Got my annual reminder from QOnline- this is promising, if they come thru with the yield stuff:
We are currently planning many new enhancements to the website including stock market information, individual security quotes, and important investment calculations based on security pricing including yield to maturity, yeild to call, yield to worst, and other important investment parameters.
Trump needs to make peace with China to avoid a world-wide recession. Cooler heads in both countries need to prevail against their headstrong leaders. Both need a face-saving compromise so each can declare a victory of some sort.
China needs our agricultural products and Trump’s “red” farmer supporters need to be saved from going belly-up. We don’t want China turning elsewhere. The U.S. needs China to buy our Treasuries so the debt can be refinanced at an acceptable level. If our tariffs severely restrict China’s economic growth, they won’t have the money to buy our Treasuries. It even might force China to be net sellers of our Treasuries.
At the end of the day, the entire world’s standard of living will be lowered if a reasonable deal (for both sides) cannot be agreed upon. JM2C
Hi Whidbey,
Not looking to make this more political, but we have a schoolyard bully (Trump) against a tyrant (XI), both of whom are used to getting their own way. Neither feels he can back down – although (IMHO) Xi has the far weaker hand. He is putting on a fierce face, but doesn’t have the resources to last very long in a trade war without disastrous domestic problems.
As far as US needing China to buy treasuries – not so true any more. China owned about 2.5% of US gov.’s debt at end of 2024 (760B), down by about half from its $1.4T holdings about 10 years before. They appear to be slowly reducing holdings because they need the cash (not to make a political statement).
note that the press makes a big deal about China being a “big” holder because they are the second largest foreign gov. holder (behind Japan).
Interesting factoid, but put it in perspective:
foreign govs hold about 22% of US debt (about $7.9T), so China owns about 10% of that($2.5%, or $760B). So, maybe “big” among foreign holders, but not that big overall (kind of like being the tallest midget). However, it looks like the UK is about to overtake China for the number 2 slot.
Private, people forget the growing season in South America and Australia is opposite of ours. It’s already harvest season in those areas and not sure purchases from China is coming back if we give them time to find other sources.
Is anyone else feeling pretty much completely demoralized by the markets right now? It just feels like a casino these days. Refresh Truth Social every so often and maybe you’ll hit a jackpot.
I haven’t even lost money this year and the whole thing feels uninvestable. Have been selling off preferreds here and there, including my beloved BANC-F.
When the markets are in panic mode, the bids and liquidity go away on our BBs and preferreds. It’s always been this way and it’s never easy to watch or accept. As I get older I’m less enthused about holding individual securities because of times like these.
LOL. Proof that “The grass always looks greener on the other side of the fence.” I wish that I had the stability of more preferreds instead of my high-octane classic blend. The last few days have felt like being stuck on the Coney Island Cyclone on the day the brakeman called in sick, 60 degrees down at 60 mph, then over again. JMO, DYODD.
yeah – it’s why it’s a great time to buy if you have dry powder – if not, just ride it out and collect those yields.
O , YES! Fed up!
I wish I had been selling too . I shorted some PFF and MUB, then added Nov puts on each.
I fear the One Big Beautiful Bill will be the Second Undoing of markets .
Currency markets have heard the admin and are selling the dollar. This has to make our markets look a good deal less appealing.
I’m not worried about the Chinese not buying our paper. It’s the Japanese I worry about. Even so, domestic political entities, social security, and other governmental units are the biggest treasury buyers.
You might take a look at long dated Tips, which have the highest premium since the gfc.
Just now at the cabinet meeting, Bissent said they ‘had a successful bond sale’– really?
I don’t profess to understand the intricacies of the bond market auctions but I happened to see Rick Santelli on CNBC this morning and he was commenting that today’s bond auction was a very good one. Just passing that along.
https://www.msn.com/en-us/money/markets/30-year-treasury-auction-showed-strong-demand-following-a-solid-10-year-sale/ar-AA1CDaTW?ocid=BingNewsSerp
https://www.cnbc.com/quotes/US30Y
https://www.cnbc.com/quotes/TLT?qsearchterm=tlt
And I’m amused that NEWTZ is now viewed as a safe harbor hiding spot — a highly leveraged provider of alternative loans.
I couldn’t find the treasury sale results that Tim posted for Wed’s 10yr, but I think 38% of that offer sold- much less than this 30 yr- although they said Wed’s was a ‘strong sale’.
Oh well….
And we have passed up those yields on the way to where ?
My bet is buying every auction from now on, as yields will rise into the auction because primary dealers are required to bid. If you cannot have a failed auction , you can get some damn high yields .
I like ATLCZ and I have been adding. Most recent purchase was at 24.13.
This puppy matures 1/31/2029. It exists because ATLC retired some more expensive debt and created this. They are actually saving money due to its creation. At par it pays 9.25% and below par you can do that math yourself.
ATLC, some what quietly, earns money each quarter. Some people might not agree with the line of business they are in but they seem to handle it quite well. The common does not pay a dividend but I doubt anyone who bought the common 10 years ago is complaining if they just held.
I own their preferred and other baby bond as well. ATLCL looks good as well if a short maturity is something you require. ATLCP, the preferred, I only bought when it really dipped in price. Not looking to add more of that but the yield is quite juicy.
I have also been adding to IIPR-A to create a small position and started a new position in DCOMG but only when it is below par. Just tossing out some ideas.
fc – Adding a little detail to this, fc: On the plus side, here’s what they redeemed with proceeds: “On November 14, 2019, a wholly-owned subsidiary issued 50.5 million Class B preferred units at a purchase price of $1.00 per unit to an unrelated third party. The units carry a 16% preferred return to be paid quarterly, with up to 6 percentage points of the preferred return to be paid through the issuance of additional units or cash, at our election. The units have both call and put rights and are also subject to various covenants including a minimum book value, which if not satisfied, could allow for the securities to be put back to the subsidiary. In March 2020, the subsidiary issued an additional 50.0 million Class B preferred units under the same terms. A holder of the Class B preferred units may, at its election and with notice, require the Company to redeem part or all of such holder’s Class B preferred units for cash at $1.00 per unit, on or after October 14, 2024”
On the negative side, clearly underwriter B. Rily was looking after their client, the issuer, more than their client the note buyer when writing:
“The indenture governing the 2026 Senior Notes and 2029 Senior Notes contains limited protection for holders of the 2026 Senior Notes and 2029 Senior Notes. The indenture under which the 2026 Senior Notes and 2029 Senior Notes were issued offers limited protection to holders of the 2026 Senior Notes and 2029 Senior Notes. The terms of the indenture and the 2026 Senior Notes and 2029 Senior Notes do not restrict our or any of our subsidiaries’ ability to engage in, or otherwise be a party to, a variety of corporate transactions, circumstances or events that could have an adverse impact on the 2026 Senior Notes and 2029 Senior Notes. In particular, the terms of the indenture and the 2026 Senior Notes and 2029 Senior Notes do not place any restrictions on our or our subsidiaries’ ability to:
issue debt securities or otherwise incur additional indebtedness or other obligations, including (1) any indebtedness or other obligations that would be equal in right of payment to the 2026 Senior Notes and 2029 Senior Notes, (2) any indebtedness or other obligations that would be secured and therefore rank effectively senior in right of payment to the 2026 Senior Notes and 2029 Senior Notes to the extent of the value of the assets securing such indebtedness or other obligations, (3) indebtedness of ours that is guaranteed by one or more of our subsidiaries and which therefore would be structurally senior to the 2026 Senior Notes and 2029 Senior Notes and (4) securities, indebtedness or obligations issued or incurred by our subsidiaries that would be senior to our equity interests in our subsidiaries and therefore rank structurally senior to the 2026 Senior Notes and 2029 Senior Notes with respect to the assets of our subsidiaries;
pay dividends on, or purchase or redeem or make any payments in respect of, capital stock or other securities subordinated in right of payment to the 2026 Senior Notes and 2029 Senior Notes;
sell assets (other than certain limited restrictions on our ability to consolidate, merge or sell all or substantially all of our assets);
enter into transactions with affiliates;
create liens (including liens on the shares of our subsidiaries) or enter into sale and leaseback transactions;
make investments; or
create restrictions on the payment of dividends or other amounts to us from our subsidiaries.
In addition, the indenture does not include any protection against certain events, such as a change of control, a leveraged recapitalization or “going private” transaction (which may result in a significant increase of our indebtedness levels), restructuring or similar transactions. Furthermore, the terms of the indenture and the 2026 Senior Notes and 2029 Senior Notes do not protect holders of the 2026 Senior Notes and 2029 Senior Notes in the event that we experience changes (including significant adverse changes) in our financial condition, results of operations or credit ratings, as they do not require that we or our subsidiaries adhere to any financial tests or ratios or specified levels of net worth, revenues, income, cash flow, or liquidity. Also, an event of default or acceleration under our other indebtedness would not necessarily result in an “event of default” under the 2026 Senior Notes and 2029 Senior Notes.
Our ability to recapitalize, incur additional debt and take a number of other actions that are not limited by the terms of the indenture may have important consequences for holders of the 2026 Senior Notes and 2029 Senior Notes, including making it more difficult for us to satisfy our obligations with respect to the 2026 Senior Notes and 2029 Senior Notes or negatively affecting the trading value of the 2026 Senior Notes and 2029 Senior Notes.”
All from the latest 10k – https://www.sec.gov/ix?doc=/Archives/edgar/data/0001464343/000143774925007559/atlc20241231_10k.htm
good comment …atlcz/sjnk pair trading near 1.5 sigma rich..although I would normally view this as expensive almost everyone one the shorter maturity term preferreds and baby bonds are trading near 3-4 sigma rich ..it seems as if the nominal yields are overwhelming the spread to the etf which yield 7.4 now
Here’s a model for an SPX correction. For ease of explanation assume price starts at 100 and ends at 0. The price levels are Fibonacci.
100 start
61.8 first major low
78.6 first bounce high
23.6 second major low
61.8 second bounce high
0 final low
Using ES (SPX futures) prices, the start is 6166.50. I’m choosing 4450.25 as the low. Here are the price levels per the model, rounded to whole numbers.
6166.50 start
5509 first major low (actual 5509)
5797 first bounce high (actual 5837)
4855 second major low (actual 4832)
5509 second bounce high (actual 5529)
4450 final low (actual TBD)
The actual prices are close to the model. It’s completely uncertain if there will be a lower low and what that price might be. Everyone and their mother sees the same thing I do and will try to front run the low.
rockstostocks –
When you say “everyone and their mother sees the same thing you do” , you think the S&P is going to go down an additional 16%? It’s confusing because you first say that the low is at a completely uncertain level, then you say everyone and their mother sees it as you do and will be “front-running” the low. ???? In the Financial Services Industry, Front Running only means one thing: The illegal and immoral practice of filling g your own orders ahead of your clients??? So the bottom is uncertain but you and everyone you know do know where the bottom is and will get your orders filled at that point ahead of your clients???
SPNT-B seller in mkt – last trade = 24.85 YTC 2/26/26 = 9.86% Will reset at 5 yr Treas + 7.298
Seems entirely a result of credit spread widening in general, no?
I sure hope so…. FWIW, the 5 year would have to go to 2.70% for this to reset at a rate lower than 10%. And if it’s not called on 2/26/26 it will not be callable again for another 5 years.
I’m concerned about credit markets and no longer want anything that isn’t AAA or FDIC.
I think markets have lost faith in the dollar and the administration
4 more divy’s before 2/26/26 call date…correct?
Almost…. The call date is 2 days before the full 4rth quarter dividend.
I saw this as well and bought in the 24.95 area today.
MUB is up decently, PFF and HYG look like crap. Citi prfds adjusting 12/25 and 2/26 are still; offered at 7.5% YTC, with adj to 5 yr plus ~ 3.50 being what I think an unlikely occurrence
Correction: Previously I said I had lost money trading SPy and QQQ in 27 out of 28 years, but I discovered this morning I have a small profit this year on both. It’s an indication this year will be like 2008!
Lt, Don’t say that!
Another crazy day. Just holding on. Did sell DVN a few days ago and it is up 15% today! Still hasn’t reached my sell price.
Bought KRP a few days ago it’s up 6% today. Big big swings based on who the majority of investors are listening to. It’s psychology now not a science. Don’t even know where prices will be at closing.
I am going to watch a page of battery powered floor vacuums at amazon to see if there is an increase in prices in the coming days- pretty sure they are all made in China. Should be quick unless they decide to sell remaining stock, and then decide if they want to try selling them at twice the price.
I hope everyone enjoyed the stress test of their portfolio ;o)
Seriously, this is a never before seen chance to get advantageous trade deals. I don’t like tariffs for raising money or protectionism so much, but as leverage they work a treat when you are the largest market.
Not sure what got stress tested……. Me or my portfolio! I have been riding this out so far. No sells, and no buys. Standing pat with my hand.
As of 1415:
2 Yr now 4.03%, huge move since the Trump put/flinch or what I like to call it the ‘Trump Short Squeeze’
Spread (2 & 10) now 39 basis pts
Surge- 90 day pause on some tariffs- ha! Already off 25% of the pop to over 2400 on the dow- but coming back at 2200
Tim- it is taking 20-40 sec to load a comment- is that from too much stuff or what?
AAA taxable housing bonds offered at 6.37% in the secondary market. I’d be short preferred etf , hyg
AAA tax free texas school ,unis at 5.05%
Do a search
Prospect Capital Corp — no one’s favorite, I presume — has put out a $990 tender offer for their 3.706% notes due early 2026. (there’s 342m of outstanding principle and the bond currently trade for about 960 (per thousand). So question: What to make of this? Are they having liquidity issues that is going to spill over into their preferreds? Why pay a premium over current cost to redeem such a low interest bond? (Disclosure: I hold a small amount of the bond, bought at a discount.)
Given Prospect is the same people running Priority Income, this is consistent with their apparent strategy of extending their short term scheduled debt. PRIF-H was just called and that was due 12/31/26. Fido shows 91 issues visible right now for Prospect and the one they are tendering for is their shortest maturity listed…. They’re coming up with the cash to make this tender for any or all from somewhere so I wouldn’t think there’s an immediate liquidity issue, but their overall strategy does seem to indicate a feeling that they are concerned about markets potentially seizing up in the neat future so let’s get out of the way of that possibility by extending our outstanding debt structure now….just my theory – nothing more…. BTW, Fido shows 50 being available at 98.5 right now..
Maybe with today’s surge PRIF-M will be up for purchase.
In Nov 2026 RITM-D (CY 7.7%) will reset at 5yy+6.223%, The YTC is 14.6% and for all I know will go much higher. I’d like to buy some when there’s some clarity.
There must be others like this.
RITM-D is my largest holding. Among the best REITs and I rate D better than the others. Lower price more than compensates for the lower dividend for 7 cycles, then higher float. Too many investors overfocus on current dividend.
NLY-F AGNCO and MFA-B(fixed) may be similar issues. There are others with a bit more risk.
No telling if prices wont drop further before bottoming out.
yes RITM-c is already floating as of 2/15/25 but div not paid till 5/15
expect a pop in price then
Plant, grow and harvest
Compost and patiently wait
with Warren Buffett
RBOB gasoline futures, now $1.90, have fallen fast and almost caught up with crude. Gas prices in most states (CA #*%@!) will follow, providing some relief from high prices on everything.
Cheap gas will be cold comfort to someone who loses a job.
CHS has two businesses: refining and ag. Is that right? Both might be threatened.
Forward guidance from some companies is bound to be bad when earnings are reported this month.
We may not get much. We may get “we cannot provide guidance right now”.
I initially thought companies would lower guidance.
They can get away with “punting” until next quarter.
Treasury market collapses overnight: the 10 year hit 4.49% before coming off a bit as there’s a massive unwind of the “basis trade”
I see the possibility of oil going much lower. Not being discussed. Would be a shock.
Rocks I check in with Bea the Magnificent and her Tarot cards said sell everything oil, even the pipelines. Too much oil everywhere, Russia is flooding the market, Iran is flooding the market , the Saudi’s and not enough demand. We hit $55 in the futures market overnight and I don’t feel like it’s going to hold.
Charles-
I feel like I’ve been waiting forever for a chance to buy oil stocks cheap. Might be coming. I will be looking for dividend payers.
I’ve been waiting for this pullback too. Yesterday I sold the VLO atm Apr 11 105 put for 95 vol. Today the CXV & XOM are mid-80s vol. Those are the 3 I frequently trade for dividends.
Bea the Magnificent must have little or no tax liability. Those selling MLPs best to determine the recapture taxes.
Oh, but oil below $70-65 allows new rigs for drill, drill, drill… so we have more of the stuff.
I see Trump has ordered gov’t bolstering ($) of the US coal industry ( more energy for AI etc)– many Cos up double digits- and metallurgical coal – like METC ~ 14% and 5% after hrs– some climbing the same in overnight amts. Old is new again.
Peabody (BTU) up 9% today and 15% after hrs.
cough…cough
Head spinner of a day- was up a little over 1% this am- at close off all of $39 – crazy. Sat on my hands.
Futures down, 10 yr up 2.28%, oil down, gold up a little
The big fish don’t invest to support political agendas. They’re all about making money whatever they think it takes.
Excellent!
“The Economic Reality of Tariffs”
https://epbresearch.substack.com/p/the-economic-reality-of-tariffs
I’m not a major fan of tariffs myself, but I thought that article was a little too one-sided.
Good luck finding a single article on tariffs that isn’t biased in some way. Unfortunately juicy bias sells better than boring nonbias.
Basmajian is one of the most neutral observers you will find.
I guess that article is a good explanation of a particular viewpoint, and I agree with most of it, but it didn’t do much for me. Here’s a recent article on similar topic by Howard Marks of Oaktree that might make a good complement: https://www.oaktreecapital.com/insights/memo/nobody-knows-yet-again
The only thing unusual about the stock index correction is the speed. Moves that should take weeks are happening in days or a day. The price action yesterday and today hit my marks. If this continues, there will be a lower low. I said recently that things happen fast these days, but this fast? Can’t say what will happen next because there are people involved and things can change.
I’m calling Liberation Day the Lehman moment for this bear. Rallies in a bear are vicious. They are accompanied by feel good “reasons” from the news. Ignore. What I pay attention to is rumors of leveraged financial firms in trouble. Sooner or later…
The surprise to me is the selling of long-end treasuries. Does that smack of raising cash to fill giant sinkholes in balance sheets?
I’m looking for 10% and better yields to buy, except for special conditions, like YTM/YTC. Good luck.
Both Cobank and Citicorp, upon issuing their quarterly $1,000 preferred stock dividends to me at Schwab, incorrectly characterized them as bond interest. I contacted Schwab, but was told that no correction would be made unless the institutions send Schwab amended instructions. Schwab also said this was a common error and frequently corrected by the issuing institution.
I just contacted the IR departments at both Cobank and Citicorp by email with specifics. Who knows if anything will happen?
same. I just told tax preparer to change it. audit me if they want.
After a couple phone calls to Schwab and sending them ‘proof’ as in Prospectus excerpts and such they did correct one of the Citi (Cusip 172967PM7 ) as QDI and not interest. Others I had were already reported as QDI.
Schwab just issued just me a corrected 1099-INT & 1099-DIV. It took about 3 weeks or so after I uploaded my ‘Proofs’ to them.
Msq—-did u speak with any particular person or department at Schwab?
No – just spoke to whoever they sent me to by customer service. After 1st agent refused to consider changing this to QDI, I spoke to a 2nd agent and told him I need to open a ‘reconsider decision’ ticket – after some resistance saying low chance of reconsider, he opened a ticket. I spent some time compiling different ‘proofs’ with URL links to publicly available docs and replied to message with the ticket.
I had given up and was ready to file my taxes but suddenly noticed they revised the 1099-DIV & INT and treated this bond as QDI.
the same Preferred is in another account at IBKR and wondering if one should pursue it with them and file an amended return
That is Schwab being lazy because their legacy back office payment system is a complete mess and they don’t have the staffing to fix it.
So they make you jump through hoops to lessen their workload.
Found this helpful article on credit spreads & the different GDPs:
https://www.cmegroup.com/insights/economic-research/2025/are-extremely-tight-us-credit-spreads-underpricing-risk.html
Also- Bitcoin is off almost 30% from high.
I can’t wait until my big fat dividends from WTFCP/M arrive on April 15.
I just realized I’m getting paid on tax day! LMAO
Rocks, I added to UMBFP yesterday.
Charles, didn’t want to sell UMBFP back in January but couldn’t pass up 25.50 with a possible call. Now happy to buy again at 24.85. We’ll see if it’s a call or float in July.
Dan my buy-in was 24.78 safe place to hide out. Be interesting to see how they handle calling this. Could be they bring to market a fixed rate preferred.
Charles-
I looked at UMBFP and said no because the time period to call is so short. I’d rather have the cash. I’ve got plenty of UMBFP already plus WTFCP/M for July 15, call or no call.
I’ve asked this before but what is a tolerably high max allocation to preferreds as a portion of a relatively conservative portfolio and what max percentage is prudent for any single sector such as banking/utility/finacial/reit? Can I treat preferreds as the bond proxy and crank it up to 50%? There are so many juicy yields currently. After decades of starvation, 6% yield on investment grade perpetuals makes me want to go in bigger than I normally would.
I currently have 20% perpetuals with 15% in GSIP banking. I see 6% on US Bankcorp which has higher credit rating than JPM/BOA/WFC. I know there could be steeper sell offs in the coming year and the interest rate on the long end could spike even higher with credit spread widening but I’m perfectly happy to collect 6% for decades.
you’ll be less happy if they yield 8% due to credit spread widening
mjtroll- If I can get 8% on investment grade, I’ll be even happier even if I am bleeding holding lower coupons. This is exactly what I am doing right now, still holding onto my 5.5% IGs. I’m still 70% powder and I guess I’ll just ride the beast down one painful day at a time. Some day the ship will right itself and push the long term rates lower. I will wait about 20 years before I’ll give up on this thesis. Considering I held 4.5% coupons for decades, 6% feels downright luxurious. As long as the big banks don’t crash, I won’t cry.
martin- I’m beginning to follow preferreds everyday. I’m extremely grateful for Tim and everyone on this board that I feel very comfortable investing preferreds.
It depends. I’m heavily into preferreds but I follow them every day and trade them. If you buy and forget it then a more modest holding is appropriate. Good income payers.
See my bank portfolio.
Safety in numbers.
You can have a 100% portfolio in 1 sector as long as it is comprised of 50-100 different ISSUERS (not issues) so that any issuer that goes bust is only a small hit to the portfolio. Usually the limiting factor is the number of issues available, as one sector doesn’t have enough securities outstanding.
So you have to blend 2 different sectors.
And be willing to sell winners in order to capitalize on throw the baby out with the bath water situations or a big ETF sells an illiquid and tanks the price
Also, the composition would differ if held in an IRA versus a taxable account.