| | | Yes, holding bdc's might work. For me, I already hold my fill.
I'm actually reducing my positions. I've decided I'd rather have cash parked in cash and not assume I can use bdc's as parking places.
Several reasons. One is portfolio volatility. The cash component of my portfolios is so high now, that if I parked much of that cash in large amounts of bdc's, the daily total dollar volatility, even presuming rather small changes in bcd prices, will overwhelm me, even if I hold 8-12 bdc's. These bdc's are subject to abrupt price swings too, especially as they announce issuance of more shares. So one has to be alert for something like that.
Having had bdc's through '07-'09, I experienced their fall too as the general market fell. Preparing for the next war to be like the past war (a mentality), I have weaned myself off of a large margin position, and I want to have cash to invest, and not have to presume I can readily and profitably peel off bcd shares anytime I want to pay for new stock buys. For this, I am willing to forgo owning large $$ in bdc's and thus I give up the opportunity to collect thousands of dollars in distributions that such an amount of shares would throw off.
I do already have relatively large ($ here compared to $ in other sectors) in bdc's: PNNT, TCAP, TICC, ARCC, FSC, PSEC.
I'll agree that in past couple of years and maybe going forward bdc's might be a good/decent spot to place some cash. For me, risk too high to make a larger commitment. |
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