"Im guessing there are lots of folks out there who no longer want to hold dollar bills in safety deposit boxes and other hiding places."
I'm with you on that guess. Not so much that people who tuck away money in safety boxes will remove such monies, but rather to me it's all about the people who have all this money in money market funds that pay about 0%. The question then is, if they remove money, where will they put this money that they withdraw? I'm guessing that maybe a bunch of them will stay out of common stocks but be attracted to bond funds, esp. junk bond funds. The reason is that, it's a year later and the world hasn't ended, we don't see (or I don't see) a discouraging never-ending string of corporate bankruptcies, and companies seem to continue to pay their debts. And in terms of junk bond funds, and the diversity of their holdings, they yield maybe 8-10%.
So imo, a nice transition place - spending the withdrawn cash on a few junk bond fund holdings as an intermediate step between mm funds/cash and maybe the still risky and volatile, common stocks.
Anyway, I've decided to add to my position in HYG in the past couple days as a play that the demand for this kind of entity will increase. There are only about three junk bond etf's, I believe (not sure). Ordinarily I'd assume it's too late for me to add, but given my presumption that there might be more demand for these funds, and given that HYG's monthly $.705 distribution, if annualized, is $8.46, a yield about 10% on today's $85.41/sh stock, I'll withdraw some dollars from my brokerage mm fund and move it into HYG.
Easier for me to believe that somebody wanting to remove dollar bills from hiding places might be attracted to something like HYG. Harder for me to believe they would be going from safety of cash directly into something as arcane(?) or obscure (?) as MCGC.
Jmo, of course. And if you bought or added to MCGC stake in past six months, that's worked out better than having HYG (percentagewise):
finance.yahoo.com |
