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Strategies & Market Trends : Young and Older Folk Portfolio -- Ignore unavailable to you. Want to Upgrade?

To: goldcountry who wrote (9809)	9/22/2024 10:55:35 AM
From: chowder	7 Recommendations Recommended By Chowderfan cole505 dannyc9 livwell Rincon v2.0 and 2 more members Respond to of 21990

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.

To: goldcountry who wrote (9809)

9/23/2024 8:42:37 AM

From: jritz0

5 Recommendations

Recommended By
cole505
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Read Replies (1) | Respond to of 21990

RE: QUESTIONS for CHOWDER and ALL

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

I identified a certain amount of yearly cash flow I wanted from my portfolio and CEFs helped accomplish that goal while leaving plenty of other funds to pursue growth and cash. Recently ETFs have replaced much of the CEFs.

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

I joined a few services on SA over the years, I currently subscribe to two: Doug Albo and Stanford Chemist. I think their services is a small price to pay. They help me oversee that part of my portfolio and paid for themselves many, many times over. I also gained a great deal of knowledge of CEFs because of the services. You can gain knowledge without the services but you wouldn't get the actionable ideas in a timely manner.


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? I monitor discount and premiums and will sell if the premium becomes obsessive and won't buy a CEF with a premium much over a couple of percent. I differ from Chowder in that I won't sell to keep a position from going into the red. CEF investors can be very irrational (I'm not talking about Chowder) that is why we can see big premium/discounts to nav on CEFs in the same sector. I watch the nav direction more than the price. if the fund is bleeding nav than I will sell unless I believe it's just overall reaction to that sector that may be temporary. I will also make bets on certain sectors moving in and out of favor particularly REITs and Utes and banks. Selling to keep from going into the red like Chowder is not a bad way to manage a CEF portfolio. Many CEFs are relatively illiquid and CEFs could be the first thing to be dumped by Institutional Investors which could start the stampede out of the funds.