Any idea why BAC-PB preferred stock is diving? Very unusual behavior for this stock.
Is it merely because interest rates are rising so there are other places to get good yields?
Hi RB!
Most everything in the fixed income arena is getting nicked due to the rise in interest rates (current and projected). Although preferreds have some potential for capital gain, they are still relatively fixed income. Add to that the fact that bank stocks in general are getting dinged due to the rate situation and you have a double whammy.
Cheers!
Murph
BL Home Fool
(who sold all preferreds some time ago and will buy back in when more interest rate rise damage is done)
2 Likes
BAC-B really hasn’t suffered much this year as it is a pretty high issue yield preferred by bank standards (6%)and never traded to near the premium to par relative to its yield that others did. Other BAC preferreds (i.e. BAC-N 5% issue yield) is down over 20% since 12/31/2021.
Many other lower issue yield bank preferreds are down over 20% since 12/31/2021 (JPM-J, FITBO) and now trade at ~6% yield and are significantly under par and rate to be around for quite a while.
I’ve been adding these 6% yielding preferreds over the past couple of weeks.
John
Long FITBO and JPM-J.
Hi John!
I’m tempted by some of the preferreds, but want to wait until rates rise some more; maybe too greedy, but we’ll see.
Cheers!
Murph
BL Home Fool
Now at 5% in preferreds from 2% on 12/31/2021.
Will leave a couple of limit orders in below the market to try to grab some more shares at better prices.
I can live with a sizeable position of preferreds at 6% yields. I’m trying to spend less time on portfolio and preferreds fit into that plan well.
Off to golf,
John
John,
Here’s hoping you get a hole in one! 
Cheers!
Murph
BL Home Fool
Off to golf
JoKingMe appears to know how to enjoy life. Have fun.
Fairways & Greens.
ImAGolfer