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I am the Director of Software Engineering at a privately held firm. I have been investing for more than 25 years, mainly in individual stocks and more recently in ETFs over the past few years. I enjoy sharing my investing ideas and views on where the market is heading as well as commenting on... More
  • JPS 1 comment
    Nov 16, 2009 12:55 AM | about stocks: JPS, WFC, BCS, DB

    I am invested in JPS - Nuveen Quality Preferred Income Fund 2.  It's a closed end fund investing in high dividend paying companies.  They pay a very attractive dividend.  The price has been going down a little lately so I've been dollar-cost average buying on the decline.  I started investing in them right around the October 2008 crash so I'm already up 100% or more.  I attribute the decline mainly to two factors:

    1. They went up too fast and peaked.  Hedgers saw this and sold at the top.
    2. I believe the instability of financials is partly to blame since quite a few of their top holdings are banks that pay dividends.  Last published, 4 out of their top five were these financial institutions: Wachovia, Barclays, Deutsche Bank, Rabobank Nederland

    But they also invest in many other non-financial companies, many of which are doing quite well.  So I expect this fund to not-only recover to their 52-week high but surpass it significantly, especially if we see a more permanent recovery in financials.  Overall, I think it's one of the best quality holdings in my portfolio at the moment.

    I'd like to hear your comments on the reason for this decline in JPS and related funds.


    Stocks: JPS, WFC, BCS, DB
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  • NormK
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    Author’s reply » I've changed my tune a little. I know if interest rates spike up even 1% then these high yielding stocks/ETFs could drop 15% in a week. But there's serious value in them in the long term even with that dip, as long as they don't continue to decline as long as you're a long holder. I held CHI through the 2008 Crash and even though principal went down, I'm still way ahead with the dividend reinvestment.
    30 Mar 2011, 11:15 AM Reply Like
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