The Perfect Storm Makes for Plunging Markets

I guess if we wanted a setback in stock prices we should be happy–but certainly we would all have been happy with 1% daily down moves instead of the 6-7% lower opening we are apt to see today.

I guess more worrisome are the plunging interest rates–this absolutely doesn’t bode well for the U.S. and global economy–the signals are quite clear now that we will move into a recession later this year. Lower interest rates are likely to provide modest and temporary economic support as folks refinance their mortgages, but daily mega doses of corona virus and stock market losses are likely to slam consumer confidence soon–we will be watching–this in spite of what is likely to be lower ‘prices at the pump’ for gasoline.

So what to do? AGAIN I will review our holdings this morning–I know I have 1 bad holding for sure and that is the Golar LNG 8.75% preferred–it is only a couple hundred shares. I may sell, but for sure I won’t add–honestly it was a mistake to have stepped into this particular arena to begin with. Last week I unloaded a portion of my overweight on UMH-D 6.375% preferred so will continue to hold this position.

I nibbled on some CEF ‘A’ rated type preferreds last week–BUT likely will not buy today, but this remains to be seen. I really would like some clarity in the markets and I am not seeing much.

So for this morning my plan is to review (for the 100th time) holdings and potentially sell an item here or there, but in addition continue to build shopping lists.

This too shall pass.

5 thoughts on “The Perfect Storm Makes for Plunging Markets”

  1. Got out of EPD on 2/21 at 24.83 taking a 12% loss. I may have to get back in at these lower levels. I did get EOG at 35.00 this morning.

  2. Fred; From what I’ve read EPD is well capitalized and covers their distribution by a ratio of 1.7 when the average MLP is around 1.3 or so. Also the “Fact” that one of their board members (Randa Duncan Williams) has purchased over $36 MILLION in the open market over the last 2 months makes me feel pretty good. Their divie is $1.78 so the yield is great. I own quite a few shares and most likely will buy just a few more this morning at 8:30am CST. They own over 51,000 miles of pipelines and are regarded as the 800 pound Gorilla of MLP’s.

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