Well we wrap up the month with economic news that was pretty much on forecast–although not showing any gain in the fight against inflation. Today’s personal consumption expenditure report did not give the FOMC any reason to consider lowering the Fed Funds rate anytime soon. So we can take lower short interest rates off the table for the next 6-7 weeks since the next FOMC meeting doesn’t happen until March 18-19.
We are in kind of a Goldilocks market for now–although common stocks continue to climb a wall of worry–plenty of uncertainty out there to worry about. Seems like we may have interest rates trade in a somewhat narrow range for the next few weeks–maybe a 10-20 basis point ranges (although one never knows for sure).
At this moment I am feeling really good about my positioning in my portfolios. These high CD and money market rates (high is a relative term) have allowed me to have 1/2 the funds in safe investments without worry. Add in a fair portion of high yield, short duration issues with a sprinkling of perpetuals of various types and I end up with my best month in the last 4 months. My gain is around .6%–kind of meager, but the previous 3 months were about that month combined. As I look back on the last 2 years one could get addicted to months that had 1-2% gains–that was so nice, but I don’t foresee those kind of gains happening again for this year. I think it will be a struggle to maintain a 6-7% annualized gain–I am hopeful, but not entirely confident.
Was pleased with the month also. Topped up a few perpetuals to increase income but mostly just letting the portfolio do its thing. I’m pretty conservative these days with about 65% in CDs/Treasuries, 20% in preferred/BBs, 10% in CEFs and 5% in ETFs. It won’t make me rich but lets me live comfortably without a lot of worry.
I thought it was a good month. Prices up a little, enough movement for some trades, no problem issues owned, and the usual good dividends.
Still seeing possible headwinds but that’s nothing new.
I thought this month was pretty easy, even with this afternoon’s surprise.
“These high CD and money market rates (high is a relative term) have allowed me to have 1/2 the funds in safe investments without worry. Add in a fair portion of high yield, short duration issues with a sprinkling of perpetuals of various types and I end up with my best month in the last 4 months. ”
Tim – you just described the current state of my income portfolio nearly perfectly! I’m 50%+ in Treasuries and CDs and I’m still bringing in $2K/month in additional investment income that exceeds all my monthly expenses (including taxes). Been able to spend more time on the golf course and with family instead of glued to the screen during trading hours.
I don’t ever, ever, ever want to go back to ZIRP. Just hoping the next Fed Chairman in 2026 doesn’t eventually take us back there.
Tim–
You made me look : surprised that I’m up 2.43% this month- but not yet close to the end of the day.