Currently at $11.38...
Closed-end Fund Income Investing
- Thread starter El OchoCinco
- Start date
The 3 or 4 recent picks are up nicely since I went long. Now remember that capital gains are nice bonuses but what we really want to harvest is that monthly income.
Also not all funds are wine and roses. I have some older funds down 4 - 7% but their capital losses are diversified away by my winners and I hold on to them as long as the dividend stream is good.
For example, my WIW is down a bit but the dividends have been steady si I have not cut it yet from the portfolio. So the key is to weed out big losers but a few down funds will not hurt the overall performance or that income stream.
ALl funds are doing well going into December (this are not equity funds for the most part) so I have to be careful of any large drops going into January.+
Also not all funds are wine and roses. I have some older funds down 4 - 7% but their capital losses are diversified away by my winners and I hold on to them as long as the dividend stream is good.
For example, my WIW is down a bit but the dividends have been steady si I have not cut it yet from the portfolio. So the key is to weed out big losers but a few down funds will not hurt the overall performance or that income stream.
ALl funds are doing well going into December (this are not equity funds for the most part) so I have to be careful of any large drops going into January.+
the end of year opportunities this year were nothing like last year's where you could have bought many good CEF's and done well (JPS, JQC)
I bought a few of the heavily discounted florida muni bond funds which have done mediocrely (since August) and have remained long BGR which has had some nice distributions but has been range bound.
Depending on how next year shapes up, some of the equity CEF's might be attractive particularly if the equity market heats up. Whether that happens remains to be seen, and these will follow the broader market.
I'm waiting for next year.
To coach and others. Do you ever average (down/up) into a fund? How long do you generally hold on to a loser? I know coach you generally don't trade but a couple of time a year I believe?
thanks
Oh and Happy New Year
( and I REALLY mean it not the other thing
)
thanks
Oh and Happy New Year
( and I REALLY mean it not the other thing )I have averaged up or down into funds often as I am looking to put cash to work. If a fund I am in is up a lot I do not mind putting some more cash into it if the dividend/yield is still good to increase my position. It has to be a good fund overall not just a seasonal spike in price. This way I am mroe confident the price will hold above my new average price.
I rarely if ever average down into a fund. Only if the fund currently also looks like a buy even though it is down from where I originally bought it.
I do not trade actively CEFs but I do try and update and add or remove funds quarterly if needed. More frequently if the funds are dropping but since I am across so many different sectors the portfolio as a whole rarely drops together. That is one time where diversification truly works beautifully lol.
Since it is the beginning of the year I will have more cash coming in and will have to do more research into CEFs to put the money to work. So I will be updating and putting more picks here in the coming weeks.
I rarely if ever average down into a fund. Only if the fund currently also looks like a buy even though it is down from where I originally bought it.
I do not trade actively CEFs but I do try and update and add or remove funds quarterly if needed. More frequently if the funds are dropping but since I am across so many different sectors the portfolio as a whole rarely drops together. That is one time where diversification truly works beautifully lol.
Since it is the beginning of the year I will have more cash coming in and will have to do more research into CEFs to put the money to work. So I will be updating and putting more picks here in the coming weeks
.Quote from RichardRimes:
To coach and others. Do you ever average (down/up) into a fund? How long do you generally hold on to a loser? I know coach you generally don't trade but a couple of time a year I believe?
thanks
Oh and Happy New Year
Here's a question for collective discussion -
Could the next CEF move be in the old style equity CEF's? The ADX's, CET's, TY's of the world which trade at double digit discounts, and mirror conventional diversified large cap funds? Particularly if the market makes a run next few months.
Lots of private equity $$ around... how would you use this with a CEF?
Could the next CEF move be in the old style equity CEF's? The ADX's, CET's, TY's of the world which trade at double digit discounts, and mirror conventional diversified large cap funds? Particularly if the market makes a run next few months.
Lots of private equity $$ around... how would you use this with a CEF?
First of all, thank you for this thread. It has really gotten me interested in CEF's.
What do you think of JQC:
Nuveen Preferred and Convertible Income Fund 2 operates as a diversified, closed-end management investment company. It invests primarily in preferred securities, convertible securities, and high yield securities.
Fund Quick Facts
As of 01/10/2007
Closing NAV: $14.29
Current Distribution Rate: 8.10%
Closing Share Price: $14.07 Premium/(Discount): -1.54%
Monthly div. and share price has steadily caught up with NAV.
What do you think of JQC:
Nuveen Preferred and Convertible Income Fund 2 operates as a diversified, closed-end management investment company. It invests primarily in preferred securities, convertible securities, and high yield securities.
Fund Quick Facts
As of 01/10/2007
Closing NAV: $14.29
Current Distribution Rate: 8.10%
Closing Share Price: $14.07 Premium/(Discount): -1.54%
Monthly div. and share price has steadily caught up with NAV.
I like the yield and make up of securities. I do not like pure equity funds but I do like funds with convertible securities/preferreds that can increase with a rising equity market (assuming the underlying is going up lol) so this fund certainly has that. Also the top holdings are 2% or less so good individual diversification. As for sector you have a large banking and insurance sector which usually happens with investments in preferreds and converts ( 9 out of top 10 are financial institutions). So you get decent exposure in those sectors without unusual overweighting.
I certainly love the yield and the fact that the dividend was increased this year from .084 to .095, a significant increase. That is waht explains a lot of the shrinkage in the discount from almsot -14% to the current -1% or so. I usually like grabbing funds at nice discounts for this very reason, to gain some share appreciation with my yield. Although the discount is smaller than I like, the funds looks sound in the sense that it can maintain this yield for some time and possibly move to a premium as long as interest rates do not rise at all or too much in 2007.
Downside is usual high leverage of close to 33% but not unusual for CEFs. Other downside is average maturity is over 10 years but actual duration might be less since many funds employ some derivatives or swaps to reduce interest rate risks. Rate increases have stopped this summer which might have also pushed the discount up and it might not be a problem really in 2007 with no new talks of increases and even talk of cuts.
Overall I like the fund, and might even pick some up although I might have a lot of preferred/convert funds which invest heavily in banks.
I certainly love the yield and the fact that the dividend was increased this year from .084 to .095, a significant increase. That is waht explains a lot of the shrinkage in the discount from almsot -14% to the current -1% or so. I usually like grabbing funds at nice discounts for this very reason, to gain some share appreciation with my yield. Although the discount is smaller than I like, the funds looks sound in the sense that it can maintain this yield for some time and possibly move to a premium as long as interest rates do not rise at all or too much in 2007.
Downside is usual high leverage of close to 33% but not unusual for CEFs. Other downside is average maturity is over 10 years but actual duration might be less since many funds employ some derivatives or swaps to reduce interest rate risks. Rate increases have stopped this summer which might have also pushed the discount up and it might not be a problem really in 2007 with no new talks of increases and even talk of cuts.
Overall I like the fund, and might even pick some up although I might have a lot of preferred/convert funds which invest heavily in banks.