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Post by bobfl on Nov 20, 2022 17:48:22 GMT
It would be fun to discuss preferred trades, strategies, performance, anecdotes etc. But not sure anyone here is into them. I have pretty much locked in my portfolio for this cycle (all preferreds) but was looking at REIT and utility preferreds today. Some were written over 50 years ago and still active.
Someone is buying these things, maybe just not here. I just checked one random preferred. It is a JPM preferred which has a daily volume of 250,000 shares. Obviously 250,000 shares are sold for some reason and 250,000 bought. Maybe it is just institutional traders and funds and etfs.
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Post by johnsmith on Dec 4, 2022 3:07:22 GMT
It would be fun to discuss preferred trades, strategies, performance, anecdotes etc. But not sure anyone here is into them. I have pretty much locked in my portfolio for this cycle (all preferreds) but was looking at REIT and utility preferreds today. Some were written over 50 years ago and still active. Someone is buying these things, maybe just not here. I just checked one random preferred. It is a JPM preferred which has a daily volume of 250,000 shares. Obviously 250,000 shares are sold for some reason and 250,000 bought. Maybe it is just institutional traders and funds and etfs. I’ve purchased some in the past. Happy to do some buying now too, when I see a good deal. |
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Post by johnsmith on Jan 11, 2023 4:02:38 GMT
It would be fun to discuss preferred trades, strategies, performance, anecdotes etc. But not sure anyone here is into them. I have pretty much locked in my portfolio for this cycle (all preferreds) but was looking at REIT and utility preferreds today. Some were written over 50 years ago and still active. Someone is buying these things, maybe just not here. I just checked one random preferred. It is a JPM preferred which has a daily volume of 250,000 shares. Obviously 250,000 shares are sold for some reason and 250,000 bought. Maybe it is just institutional traders and funds and etfs. Goodo and goodn might be priced interestingly tomorrow |
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Post by yakers on Jan 11, 2023 18:11:04 GMT
I am looking for ETF/mutual funds and maybe CEFs for preferreds as I don't want to trade individual shares but I can't figure out the best time to buy them like PFF, PFFD and PFXF. I wouldn't plan to sell, hold for the dividends.
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Post by johnsmith on Jan 11, 2023 19:39:48 GMT
I am looking for ETF/mutual funds and maybe CEFs for preferreds as I don't want to trade individual shares but I can't figure out the best time to buy them like PFF, PFFD and PFXF. I wouldn't plan to sell, hold for the dividends.
This is what I learnt about how to buy individual preferreds, particularly REIT preferreds.
Make sure they are cumulative. Make sure the common has a dividend. Make sure to buy below Face Value. (so if the face value is $25, buy below $25, etc.)
When is a good time to buy? When you feel panic and buying the preferred makes you throw up.
Then you are likely to get the dividend yield you paid for as long as the preferred is not redeemed.
This doesn't take into account what happens if the REIT fails, interest rates rise, inflation rises, war etc.
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Post by gman57 on Jan 11, 2023 20:14:22 GMT
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Post by richardsok on Jan 11, 2023 20:32:00 GMT
I am looking for ETF/mutual funds and maybe CEFs for preferreds as I don't want to trade individual shares but I can't figure out the best time to buy them like PFF, PFFD and PFXF. I wouldn't plan to sell, hold for the dividends. FFC, Fully earned 7.5% yield, monthly. Near par, recovering from recent lows. Also FLC, near 5% discount. If you want to skip on the wild side, there's PFFL for 2x exposure. I just bought some today, but regard it as a hi-yield speculative asset to trade on technical signals, not as an investment. In between steady and buckaroo you might look at PFFA, tossing off 10%. Not for widders & orphans, though. Watch dat chart. |
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Post by Deleted on Jan 11, 2023 22:19:10 GMT
yakers --- For leveraged CEFs focused on preferreds, note the stables of such offered by the respected firms Flaherty&Crumrine flaherty-crumrine.com/ and Cohen&Steers www.cohenandsteers.com/F&C ... DFP, FFC, FLC, PFD, PFO all with similar stats but some are thinly traded C&S ... PSF, LDP, PTA in general comparison to the F&C ones, these appear to have higher yield, better discount, less leverage, less coverage, and better 1-year TR on both price and NAV. For investment and income, not trading, I hold PTA seekingalpha.com/article/4554147-pta-discount-widens-further-interest-rates-continue-pressure-this-fund . --- Frank
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Post by bobfl on Jan 13, 2023 0:03:17 GMT
I am looking for ETF/mutual funds and maybe CEFs for preferreds as I don't want to trade individual shares but I can't figure out the best time to buy them like PFF, PFFD and PFXF. I wouldn't plan to sell, hold for the dividends. I buy only individual preferreds (investment grade, qualified.) The price fluctuation of preferred ETFs can be similar to my overall portfolio. So my discussion below applies to both (a large basket of individual preferreds and ETFs). Regarding your question of "when to buy?".... When the Fed rate is stable the preferred prices can rise and can be expensive. You can check long term ETF charts and match them to the Fed fund rate. Search Google for a Fed rate chart (click images). Right now prices are jumping around because of the Fed. Any speck of hope that the Fed will slow or stop makes preferreds jump up. The opposite is also true. After selling in January, I got back in after prices dropped in May and June. Here is how my overall composite has moved since then compared to the total price at reentry: Aug 03 up +14.7% Nov 07 down -4.98%, Dec 2 up +5.28% Dec 31 down -1.62%. Jan 12 (today) up +8.49% Could they still bounce? Probably until the Fed stops and pivots. An important factor, if you will buy and hold, is that these price fluctuations mean nothing. It is your yield that you try to lock in and live off. If you buy quality individuals preferreds you are more certain as to what that will be long term. Check the history of payouts for the ETF or fund you chose. Regarding, "Make sure they are cumulative." That means if a company gets in so much trouble that they have to suspend dividends they will do "catch up" payments. I buy only high quality so I don't care if they are cumulative. If I ever found that a company was on watch for a downgrade to junk I would sell it quick. My fingers would move so fast to sell that my keyboard would start smoking. I did that with the Chicago Tribune years ago when Zell bought it. You don't have to worry about that in ETFs. They deal with it. Again you don't have to worry if they get redeemed in ETFs; that is their job to buy something with the new cash. But upon examining several ETFs some own a lot that could be redeemed. If they replace a redeemed preferred with a lower yielding one, your dividend could be affected a little. This time my entire portfolio on individual preferreds was purchased based on the fact that each particular preferred should not be redeemed. But how to do that is a whole different discussion. |
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