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Post by rhythmmethod on Aug 16, 2021 14:51:54 GMT
This is on my mind for a future possible move. I rather like steelpony10's concept of having an income and growth side of his port. I don't think I'd have a comfort level of placing as big a bet on CEFs as he does. I'm not really interested in div. capture and trading in and out of them. All this with the fact that they are crazy high, like Keith Richards in the 1980s (like everything else). It looks like my PIMCO favs PCI, PFN, PTY may have trouble maintaining the dist. levels. So, with the thought that something always shakes the CEF tree, when/if that happens what would be your three best guess of a B&H group of FI CEFs to equal about 10% of port value? Any to beat my PIMCO favs? If this happens, I'll let it come to me. I'm not gonna chase it. - TIA |
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Post by xray on Aug 16, 2021 16:01:40 GMT
rhythmmethod,
Your: 1... This is on my mind for a future possible move. I rather like steelpony10's concept of having an income and growth side of his port. I don't think I'd have a comfort level of placing as big a bet on CEFs as he does. I'm not really interested in div. capture and trading in and out of them.
2... All this with the fact that they are crazy high, like Keith Richards in the 1980s (like everything else). It looks like my PIMCO favs PCI, PFN, PTY may have trouble maintaining the dist. levels. 3... So, with the thought that something always shakes the CEF tree, when/if that happens what would be your three best guess of a B&H group of FI CEFs to equal about 10% of port value? Any to beat my PIMCO favs? If this happens, I'll let it come to me. I'm not gonna chase it. - TIA 1... I have "always" invested into a income and growth side for my portfolio. I have explained many times why many times and is in my older posts [lengthy explanations]. Many of us do not trade [do not go in/out of securities like you are suggesting] until the CapGain becomes substantial and then we use a out/in process for assuring that the CapGain is actually immediately realized " for the current year" [like the insiders always do]. Many of us do " NOT" rely on total CEF's in our portfolio's but on other securities as well. Currently, 50% of my portfolio is in CEF's. I like CEF's because we can always find the "CURRENT" NAV's when we are investing our money. If a NAV is lower then the market Price, we always need to understand the "higher" risk being taken and "reduce" the normal share allocation we are used to.... 2... Agree that the market is extremely high and extreme caution must be exercised in any current buying activity. I do not have any Pimco Favorites in my current portfolio and thus do not really want to make comment on this. If the PIMCO CEF's are at "Premium" and we have a market correction, we should " ALWAYS" expect a decrease in their distributions. Based on historical's, I would expect my current portfolio to loose up to a maximum of 2% for any market correction.... 3.... Looking at my current portfolio of CEF's, 3 of my current CEF's [excluding 2 flyers (penny stocks), & 3 RO's (need 30-90 days to invest RO money)], are at a premium and they would probably decline to the 1.5-2% range [based on my historicals]. However, always however's, since my current portfolio has a 9.21% dividend attachment, and we have already collected substantial CapGains for the year [using out/in methodology which "has" driven my buyback MktPrices higher] I would expect a dividend of 7.21% for any market correction encountered [sole opinion]. I do not have the PIMCO data on my computer but I can see that they could be a lot higher than the -2% [if at substantial premiums] that I have been talking about [IMHO]. I agree that if the train has left the station, we should never chase the train.... Hope this helps a little.... Live long and Prosper....
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Post by steelpony10 on Aug 16, 2021 17:12:48 GMT
This is on my mind for a future possible move. I rather like steelpony10 's concept of having an income and growth side of his port. I don't think I'd have a comfort level of placing as big a bet on CEFs as he does. I'm not really interested in div. capture and trading in and out of them. All this with the fact that they are crazy high, like Keith Richards in the 1980s (like everything else). It looks like my PIMCO favs PCI, PFN, PTY may have trouble maintaining the dist. levels. So, with the thought that something always shakes the CEF tree, when/if that happens what would be your three best guess of a B&H group of FI CEFs to equal about 10% of port value? Any to beat my PIMCO favs? If this happens, I'll let it come to me. I'm not gonna chase it. - TIA Ha. Ha. If you’re going to buy and hold forever the price don’t matter. The three up mentioned have had a premium for years because it’s PIMCO the managers. Instead of “about 10%”. Try how much cash you want each month first. For example 1k or 12k a year. So you would have to invest about 150k at 8% to get 12k a year. You mentioned income cuts go for 16k a year by investing 200k and bank the excess to use later if that bothers you. So start a set aside of safer investments for the next correction or market swoon if you must market time. At 8% yield you get your investment back in 9 years, buy now, say 7%, 10 years. 72/8,72/7, big whoop. I’m invest in CEF’s for real cash now not hoped for cash from equities and to avoid or delay spend down. Buy the way even buying at deep discounts I’m only about 10-12% ahead in total value after 12-13 years. I’ve received all my initial investment back and also used the excess to invest in growth indexes which grew what 10%+ the last 12-13 years. So look at the whole picture. Anyway to answer your question, PCI is being merged into PDI, PTY is the best I know, GOF is the best equity CEF I know and ETV (covered call) is a managed CEF which supposedly means less yield fluctuation. Managed types may be right in your wheelhouse. We own all of these and all sell at a premium because of stellar management. You can also check the AUM of which you’ll find these near the top. Also check Portfolio Visualizer for the TR and volatility during the bank crisis and 2020. We find CEF’s to generally be about 10% less volatile then equities but with less TR but more predictable income. |
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Post by Chahta on Aug 16, 2021 17:23:37 GMT
I too took an interest in steelpony's income CEF port. It most likely depends on how much you have. If a large portfolio or your personal return needed is low enough you can do it with OEFs and a lot less volatility if that suits you. Equities will give you all thrill you need. I don't know if I ever knew steelpony's reason for going high income.
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Post by rhythmmethod on Aug 16, 2021 17:35:06 GMT
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Post by Chahta on Aug 16, 2021 17:37:07 GMT
In a way the 50% AA to CEF income route is a "brass balls" approach. But then again the div stock portfolio is as well.  This investing thing sure is a pain. RM, if you start at 10% maybe 20, 30, 40, 50 will be come more comfortable. But steelpony10 had a head start. He bought at deep 2008 discounts. |
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Post by steelpony10 on Aug 16, 2021 17:58:27 GMT
I too took an interest in steelpony's income CEF port. It most likely depends on how much you have. If a large portfolio or your personal return needed is low enough you can do it with OEFs and a lot less volatility if that suits you. Equities will give you all thrill you need. I don't know if I ever knew steelpony's reason for going high income. Basically I set investments up to separate income streams so I could set sections up individually. You can’t take capital gains from a core holding without losing any income also. So we have growth to take capital gains from twice a year if they are there and steady monthly income to pay the bills with all excess from both reinvested, most auto invested. Easy peasy. We went high yield to grow excess income in equities and a muni and to develop a secondary income for possible later in life issues. Money we don’t need now and may never need so we could take more chances and spend more now. From our experience to date we found equities are more volatile then CEF’s. You’re correct if you have a large portfolio or live on the beach in your van who needs this stuff. My question is what’s the plan if your income needs double then triple within a 2-3 year period later in life? You want to go HY crazy at 85 or dive off the spend down cliff? Remember because we live off CEF income (40% of PV combined with SS) we have developed a 60% cushion that grows from monthly contributions and any blessings from Mr. Market. |
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Post by steelpony10 on Aug 16, 2021 18:15:49 GMT
In a way the 50% AA to CEF income route is a "brass balls" approach. But then again the div stock portfolio is as well. This investing thing sure is a pain. RM, if you start at 10% maybe 20, 30, 40, 50 will be come more comfortable. But steelpony10 had a head start. He bought at deep 2008 discounts. No “brass balls” here. Mr Market scares me. I don’t like surprises or unpredictability. If volatility is your thing check your funds worse years in recent times to an index or CEF. I don’t spend down (yet) so I don’t care too much. DCA up and down is the market timers 12 step program. Conquer your addiction. I do it every month. It doesn’t hurt |
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Post by rhythmmethod on Aug 16, 2021 19:43:59 GMT
In a way the 50% AA to CEF income route is a "brass balls" approach. But then again the div stock portfolio is as well. This investing thing sure is a pain. RM, if you start at 10% maybe 20, 30, 40, 50 will be come more comfortable. But steelpony10 had a head start. He bought at deep 2008 discounts. Right, and the reality (as of now) is I don't need the income but I'm thinking ahead. I know I'm an amateur market timer/ guesser. But I'm sleeping pretty well and like my port pretty much as is, with some tweaks (always more tweaks). I think I'll see how the year plays out and in the meantime start research on ETV as a starting point. |
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