BT, DSI fits into my income portfolio, which is 40% of my total holdings. I usually do not buy income positions in thirds, as they are much safer than cap app or 90/10 posiitons.
My bet is several fold. First off, the thing is yielding more than 8%. Secondly, it gives me exposure to foreign currencies at a time when the Chairman of the Fed is printing dollars at a record rate, which I like. Third, like all the CEFs I buy, it sells at a discount to its Net Asset Value, in this case, over 10%. Third, they do not employ leverage to get the high yield.
I will hold it until it either becomes overpriced (tomorrow, please <G>) or until I decide I would rather be back in dollar denominated bonds. Whether that is short or long term depends upon the market and various economies.
It is not an alternative to money market funds. It does move up and down in price, sometimes enough to wipe out the benefit of the yield. It is an alternative to US bond investments and other income plays. It is fairly safe over the long haul, but not for any money you need in less than two years.
MB |
