Wow–it is a lousy day for both common stocks and preferreds (and baby bonds).
We see 345 preferreds are down out of the 476 we track. The average share of $25/share of preferreds and baby bonds are off 14 cents on the day–certainly the biggest loss we have seen in months, but in the big picture of the sharp runoffs we have had recently its not too much.
Our personal portfolios are down a small amount–I’m talking 1/10 of 1%, but as TechGuy noted earlier he is seeing a lot of red, in particular in his mREITs.
With the 10 year treasury now at 1.77% we can expect plenty of turbulence in the next couple of weeks. Here is my plan.
I will likely not sell anything at all–I am positioned where I want to be with plenty of dry powder available which is in money market now–just waiting for ‘opportunity’. Likely I would want high quality preferreds–maybe some of the CEF preferreds will come down to reasonable levels. Alternatively if any term preferred or baby bond with maturities in the next 3-4 years takes a drop I might be interested.
Bea noted in comments earlier here her short term CD which she had at 2.4% just matured and she is now staring at a 1.9% for reinvestment, so for income we all may be ‘forced’ into riskier assets.
For newer income investors now is not the time to panic–this is more a time to keep your eyes open for solid issues that were priced too high that might come into buying ranges.