Silicon Investor (SI) -- The First Internet Community

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 : 50% Gains Investing -- Ignore unavailable to you. Want to Upgrade?

To: marty009 who wrote (81163)	8/10/2009 12:40:08 PM
From: E_K_S	Respond to of 118717

Hi Marty009 - I have been developing my exit strategy on the truck load of preferreds I was able to pick up in March and May 2009. I got some for both the IRA and the Taxable account. Many have already doubled and now yield around 14%-11% down from the 20% I was able to buy in at. I am doing what you described by keeping the Preferreds in the IRA and let them spin off these great dividends tax deferred. For those preferreds in the taxable account, I plan to sell when they sell above $20.00/share (many have a par value of $25.00/share based on their original IPO) and/or I can find a better growth opportunity with a 4%-5% dividend. My thought is that the upside potential for the preferreds are limited at current prices and if I can use the proceeds to buy another good dividend payer with a potential double, I should do better and incur a smaller tax bite. I started a small position in D with this thought in mind as they pay 5.2% with a possible up side $40/share-$50/share. I really would like to buy this one under $30/share, so my starter position is quite small. Their are many other candidate stocks I am looking at. My biggest fear is the possibility of long term inflation and my equity choices will dictate those companies that can benefit from inflation or provide a hedge. Natural resource companies come to mind. It looks like DRU was originally issued at $25.00/share (par value) with a 8 1/2% yield. If by chance we re-test the lows or get a very large reactive sell off, this might be a good one to pick up below $20.00/share. It trades on pretty good volume for a preferred. If things get really bad, DRU will be much safer than my REIT preferrds. EKS