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Strategies & Market Trends : High Yield Investing - CEF's
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To: mykesc2020 who wrote (75)12/16/2021 8:02:02 AM
From: jritz02 Recommendations

Recommended By
harriet
jopapgh

   of 245
 
RE: Let's say, YES, the person has achieved their income objective. Let's also say, the person has an income margin of safety. I think I can say I have both.

What then would be your strategy?

I have met all the above objectives and have been building cash by trimming some DGI stocks as well as letting all excess distributions go toward a fund for a 2nd home in warmer climes or if there is a large correction, put that idea on the backburner and use the cash to bargain shop in the market.

I know a lot of people don't like idle cash but I look at it as Patton's 3rd US Army during the Battle of the Bulge

It looks like that special distribution will be about 13% of the market price at todays price, that's a nice size trim without having to sell shares :) Of course there should be a corresponding drop in nav but I think this is just what AIO needs to jumpstart the share price to lower the discount to nav (hopefully not just from the 13% reduction in nav).

Doug Albo has been pounding the table on this fund for over a year, in fact I started buying in July 2020.

This is a few paragraphs that I lifted from a piece he did for subscribers on Oct 22 this year

"So why should AIO's market price be lagging so badly? Good question. I don't know why AIO trades so horribly but I do believe AllianzGI could take a couple steps to make AIO more attractive.
First, include more income producing securities like high-yield, which ACV uses, and/or introduce an option overwrite (which AIO is authorized for) to bring in more income. Second, raise AIO's distribution since that is the best way to convince investors that the fund is doing well.

I believe AIO would trade closer to its all-time high of around $30 if Virtus and AllianzGI took these steps and I will be sending this article to them. I currently have a $32 price target on AIO, which may have to be extended out further now, but I have no doubt the fund will eventually get there based on its history."
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