| tip, When I started loading up on cef preferreds about 18 months ago, I though we'd get a drop in long term rates. The cuts by the Fed helped that to happen, but were not the main reason why I bought or held so much for so long. BTW, my first third was nothing to brag about, with buys only a bit better than they are now. But the next two third buys were terrific. When you can get 10-15% appreciation on an income holding that is already yielding 7%, it is a very nice bonus. I don't see that in the months ahead, so I have pulled in a lot of my cef preferreds. Still, I do use them for cock-eyed hedges. For example, when I do a T-Note or bond buy/write, I may use a long, higher yielding CEF preferred instead of the future and a money fund. This is not for everyone, as it could go haywire. But it usually works out real well for me. I will also play the spread between Treasury yields and CEF pf. yields, which are very high at this time, so they are still valuable. |
