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Strategies & Market Trends : Young and Older Folk Portfolio
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To: goldcountry who wrote (9809)9/22/2024 10:55:35 AM
From: chowder7 Recommendations

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Re: CEF Portfolio Management Questions ...

1. Did you identify a certain percentage of your portfolio that you would invest in CEFs?

Initially I decided that I would carry CEF exposure of no more than 10% of the portfolio value. As I got more comfortable with them, and watched how some of them grew, I raised my exposure to 20%, but that may fluctuate as time goes by and market conditions change.

2. How did you select the strategies of CEFs that you would invest in?

I depended on what I read in various articles by authors who invest in CEF's and I subscribed to a CEF service that also presents model portfolios.

3. Do you track the changes in discount/premium with any regularity to rotate in and out of your CEFs or buy and hold as long as the distributions remain constant?

For the most part, I rely on price action. As long as the CEF stays in the green (above my cost basis) on price alone, I'll hold on to the CEF. When I see a CEF turn red, I start monitoring it for sale at that point. I am not going to take double digit drawdowns even if the distribution is still intact.

For example, XFLT is -1.7% on price alone. If it gets down to -8% or -9% I'll reevaluate it and if I don't like what I see, I'll sell it in spite of its 14.98% yield.

We are still in a Bull market and I'm not willing to hold on to assets that turn red when everything else is turning green. This is partly what I mean by working with strength.
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