Preferred Stock Investing Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Preferred Stock Investing

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: deeno who wrote (183)	1/14/2013 4:36:25 PM
From: Kapusta Kid	Read Replies (1) of 189

"the world is chasing yield." What I don't get is that they are chasing a floater which yields a bit over 4%, rather than a fixed rate from the same issuer yielding over 7% at roughly the same share price (AEB vs. AEF, e.g.). Even if the fixed-rate is called for a capital loss, its total return (from here) is better -- unless the floaters keep rising and break above par. "what do you think (the market) is saying?" Perhaps that short-term rates will rise sooner, rather than later, despite the Fed. Or that the economy is stronger than believed (if so, participation loan funds should do well). Or that financials have really turned the corner and the market can still run from here. "or they are thinking rates will be low for a long time and that PFd's they own will get called. A good number of floaters have a floor that won't drop more." The thing is that they're now hitting the floor. I guess my real dilemna is whether to sell my floaters. With AEB, e.g., my cap gain is about 7 years worth of dividends (in a taxable account). Others are similar, though not quite that extreme. A no-brainer in a way, except that I have no losers to offset the cap gains (nice problem to have). I've been in and out of SAN-pB on smaller gains before, so I don't fall in love with these stocks. I guess I just hate to pay taxes more than anything. It's tough without a crystal ball.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next