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Michael Fabian

 
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  • Massaging Your Dividend Equity Buy List: Part 2 [View article]
    Left banker,

    I tend to agree, if only they would create an ETF that's user customizable!
    Apr 10, 2013. 11:52 AM | Likes Like |Link to Comment
  • The Pimco High Income Fund (PHK) alters its mandate to allow the manager to invest in IO (interest-only) and PO (principal-only) securities, as well as inverse floaters. Pimco's Dynamic Income Fund (PDI) has had a great deal of success with this strategy since its launch about a year ago, and trades at NAV as opposed to the closed-end PHK at a whopping 44% premium to NAV. [View news story]
    I am a holder of PDI and like leftbanker have been impressed with the performance. I recently purchased a starter piece of PCI since it neared parity. NAV performance has been strong in recent weeks. It doesn't have the star factor of Gross or Ivascyn, but I dont remember ever seeing a PIMCO fund with that many managers... I think the drawback is that its a large fund, and also has limited history.
    Apr 6, 2013. 12:59 PM | Likes Like |Link to Comment
  • The Actively Managed Income Conundrum [View article]
    BruceM,

    I agree with many of the points you laid out in your comment regarding DVY and an income vs total return investor. However, I have witnessed many times investors that start down one path for their investing endeavors, end up traveling down another simply because the market didn't cooperate at the time. Its quite common to uncover income investors that are investing for growth and vis a versa. My business partner and I always put it that "everyone is a growth investor until the market corrects". I believe that income investing isn't that black and white, there are many effective styles, and mine is one tilted more towards total return and market timing. Thanks for your comment!

    all the best,
    Michael
    Apr 3, 2013. 09:47 AM | 1 Like Like |Link to Comment
  • Consider Making Changes To Your Income Allocations [View article]
    Gratian,

    Thank you for the kind comment, I'm writing an article over the weekend about managing an income portfolio more actively. I hope to have it published early next week.

    All the best,
    Michael
    Mar 30, 2013. 10:12 AM | 1 Like Like |Link to Comment
  • Consider Making Changes To Your Income Allocations [View article]
    I agree, PDI has been a great fund, I wrote an article about it last week. Its a bit more of an aggressive strategy than PIMIX that also uses leverage.

    http://bit.ly/Ymovrt
    Mar 30, 2013. 10:05 AM | Likes Like |Link to Comment
  • Consider Making Changes To Your Income Allocations [View article]
    Class D share is PONDX, $2500 minimum and transaction free however there is a small 12b-1 fee... you can check pimcofunds.com for additional share classes your broker offers. I use Fidelity so thats what I'm familiar with. Thanks
    Mar 29, 2013. 05:17 PM | Likes Like |Link to Comment
  • Consider Making Changes To Your Income Allocations [View article]
    Left banker,

    Thank you for the kind remarks. All the best to your investment endeavors.
    Mar 29, 2013. 03:32 PM | Likes Like |Link to Comment
  • Consider Making Changes To Your Income Allocations [View article]
    Deepwater,

    Thank you for the kind remarks. I also hold a large position in DBLTX that I've owned since a few months after the fund got started. The opportunities in Non Agency MBS have not been as easy to come by for Jeffrey and DoubleLine over the past year or so. They are also hindered by a prospectus rule that doesn't allow for more than a third of the fund to allocate towards securities rated below investment grade. Even though there is sound collateral and opportunities for capital appreciation there. I will continue to hold that position because I believe in the firms talents and core competencies. I also have a holding in a similar strategy run by Dan Ivascyn at PIMCO, the symbol is PIMIX. Its performed beautifully in concert with DBLTX. I suggest taking a look at that fund as well. I have stayed away from direct treasury investments like TLT or IEF because of the very high duration, and the mere fact I think it presents more risk than reward, even on a short term basis.

    Regarding your interest in oil stocks, mREITS, and other equities, its difficult to envision what your portfolio looks like and what your goals/objectives and comfort with volatility are. If you would like, I would be happy to discuss your asset allocation and review your portfolio to be able to give you some feedback (of course at no cost). Please feel free to contact me anytime. My email address is listed under my author column. Thanks again!

    all the best,
    Michael
    Mar 29, 2013. 03:14 PM | Likes Like |Link to Comment
  • Consider Making Changes To Your Income Allocations [View article]
    UpDown,

    Thanks for your contribution, I will give it a read!
    Mar 29, 2013. 01:46 PM | Likes Like |Link to Comment
  • Massaging Your Dividend Equity Buy List [View article]
    I could see why it might be confusing looking at an ETF providers website. They are not obligated to provide you with tax advise, but the 1099 they send to your brokerage firm tells the true story. I pay my taxes to the IRS, and the IRS allows for any common stock dividend that meets the corporate and holding requirements if owned through a fund or not to be dividend qualified.

    http://1.usa.gov/16mwtTu

    To each as their own, if you would like to pay ordinary income that's fine, but I will stick to paying lesser taxes on income from qualifying corporations owned by each respective ETF.
    Mar 29, 2013. 01:42 PM | Likes Like |Link to Comment
  • Consider Making Changes To Your Income Allocations [View article]
    Indeed he did. I respect every argument he pointed out, just not his delivery.
    Mar 29, 2013. 12:39 PM | 2 Likes Like |Link to Comment
  • Consider Making Changes To Your Income Allocations [View article]
    Bob,

    I think you might be making predictions and labeling them as facts. You stated that the "30 year bond rally is over", and that "interest rates are at all time lows" or "Since we are at almost zero interest rates, they only have one direction to go, up". Looking at my charts, interest rates are not at all time lows. That type of one way thinking can get you into trouble. I understand we have disagreeing philosophies, but you might want to take a more neutral posture when commenting on other contributors articles. Its the difference of opinion that works to promote healthy debate, that is what I believe this site was founded on.
    
    Furthermore, many actively managed bond funds have posted reasonable returns this year, and can shorten their duration to a certain extent if interest rates rise. Bill Gross even shorted bonds in the total return strategy in 2011-2012. However, he didn't have much luck with that as interest rates continued to fall. If he were to do the same in a rising interest rate environment, the returns would be fantastic.

    My position for clients in BOND is one single piece of a comprehensive strategy. I was an early adopter of the fund at its inception last year, and it posted significant outperformance over the benchmark. When I believe that interest rates have a dire risk of rising, I will shift my clients portfolios more towards equities or low/negative duration bond funds. I'm very aware of the realities of interest rates, and I'll change my "textbook" approach when its stops working.

    Thanks for the comment.
    Mar 29, 2013. 10:19 AM | 3 Likes Like |Link to Comment
  • Massaging Your Dividend Equity Buy List [View article]
    That's incorrect, any common stock dividends flow through even on a percentage basis, to the holder of the fund. You are 1099ed proportionately based on the holding period and qualified dividend requirements. However, the article wasn't intended to argue the benefits of tax efficiency.
    Mar 29, 2013. 09:45 AM | 2 Likes Like |Link to Comment
  • 3 Great Alpha Creators To Add To Your Portfolio [View article]
    7of9,

    PDI typically uses interest rate hedges (swaps) to manage interest rate risk within its portfolio. I know that GOF uses several types of hedges (mainly options) to manage its volatility as well. DBL's strategy is one that pairs bonds with negative and positive duration together so that the intermingling of the securities balance out interest rate volatility. I believe each manager would perform admirably in a rising interest rate environment.

    The leverage is another concern, since it simply enhances returns positive or negative. However I am confident that PDI and GOF are both using their leverage responsibly. Meaning that I don't believe they are over leveraged or under (especially compared with the average mREIT). DBL does not currently use any leverage.

    My trading strategy with these 3 positions for my own account, as well as client accounts, is one based on the current price vs. 12 month average trailing premium/discount percentage. I agree that DBL and GOF don't present the most opportune moment for new money. Feel free to contact me with any additional questions.
    Mar 28, 2013. 09:43 PM | Likes Like |Link to Comment
  • Massaging Your Dividend Equity Buy List [View article]
    Are you referring to PFF? I'm not a tax advisor, but from my knowledge distributions made from common stock equity funds are dividend qualified.
    Mar 28, 2013. 04:11 PM | Likes Like |Link to Comment
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