When is it time to SELL preferreds?

Industry Discussions Real Estate Inv. Trusts: REITs
1

Between 4/16 and 5/18 I purchased preferreds to raise my holdings from 2% as of 12/31 to 5.5%.

Average yield was 5.95% (yes the April purchases were a bit early).

Now these are UP an average of 6.36% and average yield is ONLY 5.60%.

Running my numbers for O I see 9 and 11 years to O income exceeding fixed income. Was 11 and 14 just a few days ago (5/15).

I guess I’m done purchasing preferreds until yields rise again.

Not quite ready to sell and move to DGR.

John

Prior post on buying preferreds.

https://discussion.fool.com/one-of-my-gages-of-buying-fixed-inco…

5 Likes
2

OK, a 17.14% gain in less than a month is NOT something I’d expect from a stodgy old preferred.

FITBO went from 6.11% true yield to 5.23%TY.

Rolled the $ to TFC-PR at 5.74%TY.

Picked up over 1/2% in yield for the swap with no perceived increase in risk.

John
True yield: adjusting yield calculation for “accrued” dividends.
Downside: Short term capital gains.

1 Like