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Post by Deleted on Oct 28, 2022 14:32:45 GMT
Waiting for large discounts to buy CEFs assumes that their NAV is not affected by the same malaise affecting bonds (higher rates and unpredictable increases). But their NAVs have been affected by the abrupt rise in interest rates this year. In this environment, I believe it is better to buy on attractive low prices instead of wider discounts. Unless you think a blow-up event is close at hand to make their prices even more attractive.
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Post by ECE Prof on Oct 28, 2022 15:17:53 GMT
Waiting for large discounts to buy CEFs assumes that their NAV is not affected by the same malaise affecting bonds (higher rates and unpredictable increases). But their NAVs have been affected by the abrupt rise in interest rates this year. In this environment, I believe it is better to buy on attractive low prices instead of wider discounts. Unless you think a blow-up event is close at hand to make their prices even more attractive. Yes. It could happen. But, I thought that UTG's price will go down, but it keeps going up because XLU keeps going back up at the expense of Tech. rout. So, I did not want to wait and added some more shares of UTG in my taxable account.
The same thing happened to my other two income type CEFs too. ECC and PDI prices kept going up and stopped adding. I think that PDI's price has dropped by only a dime. That is not a bargain.
The prices of the CEFs and their NAVs depend on the fundamentals of the general market too. So, depending on the market cycle, they also fluctuate up and down along with the market cycle.
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Post by xray on Oct 28, 2022 19:45:13 GMT
@haven,
Your:
Waiting for large discounts to buy CEFs assumes that their NAV is not affected by the same malaise affecting bonds (higher rates and unpredictable increases). But their NAVs have been affected by the abrupt rise in interest rates this year. In this environment, I believe it is better to buy on attractive low prices instead of wider discounts. Unless you think a blow-up event is close at hand to make their prices even more attractive.
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Sole opinion:
Low prices only occur (by investors/traders) when NAV's and book values are "underpriced". Both investors and traders (and some of us) are always looking for "value" (by analysis) and buy accordingly....
Don't expect any blowup from current MktPrc's but this is the time for "dollar cost averaging UP" (our Original 10% of current portfolio) when the opportunity presents itself. Looking for additional value securities is the "PLAN" for most of us as we rebuild our portfolio's. Keep in mind that the market is always looking "FORWARD" six months. Currently, that means May of next year (Nov 1st to May 2023). The conclusion here is that we could have a "VERY VOLATILE" market until May (where we will again have to re-evaluate the market for a additional six months looking forward (IMHO). My thinking will not really change unless the FED changes (going forward). Many of us never look at current data or the past data as good analysis data. We have to look at our current portfolio and measure the data looking forward....
Some remaining at 50% cash as previously posted (rebuilding (VERY SLOWLY) to 16 securities)....
Live Long and Prosper....
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