Alpine Total Dynamic Dividend Fund (AOD)
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Managing Portfolio Allocations With ETFs [view article]
Where are your asset classes? You have 11 industries, yet you have 10.8% in financials. What about foreign securities? What about real estate, commodities, or alternatives? Secondly, where is the investment selection process? I don’t see how any asset allocation software could deliver the asset allocation mix you own. Thirdly, where is your risk management? If you change your risk model to Conditional VaR (Expected Shortfall) and weight your data using GARCH you would have avoided financials all together.Diversifying assets following the concepts asset allocation is not true portfolio optimization. You might enjoy reading Mandelbrot’s book ‘The (Mis) Behavior of Markets to better understand the newer asset allocation strategies like Extreme Value Theory. Cheers
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Why I Am Adding PGF and AGD to My Portfolio [view article]
Better link for a chart of NAVs of AGD vs. DPOtinyurl.com/5g6zrx Reply
Why I Am Adding PGF and AGD to My Portfolio [view article]
I like to see three things in a closed end fund: a relatively stable NAV; a high distribution yield; and a market price below the NAV (discount). Since AGD only meets one out of three criteria I won't consider it, although I really do like the concept of international equity dividends.Your article mentions that a positive feature of AGD is the lack of leverage and option selling. It's conventional wisdom those are bad things; however, I do think they can be good tools in the hands of fund managers that use them wisely. Take a look at this chart -- it compares the NAVs of AGD and DPO:
finance.yahoo.com/echa...;range=1y;compare=xdpo...
DPO uses leverage and option selling on the Dow 30, pays 12% yield, and is priced at a slight discount. The NAV for DPO is down about 5% in 2008 vs. 13% down for AGD. Reply
Why I Am Adding PGF and AGD to My Portfolio [view article]
The PGF does indeed look good as a diversification. I have been using these individual issues as a substitute in my IRA to additional re-investments in my bond ladder. Nearly half of my 2008 rung has matured and I have had a call at a premium to my cost basis on a '10 issue. Quality in med-term corporate bonds seems not to exist these days vs any kind of reasonable yield for risk premium and inflation protection. I am replicating the current yield of PGF with BAC investments in FBF-N. Others like C-F, JPM-W, MSJ, Goldman Sachs HJJ, USB-D, recent investments in TWC have done very well /GJG & PYI. I have hedged these higher payers with the very attractive Adjustable rate pfds selling well below par with slightly lower yields. The FNM-P, BAC-E and UBS-D all provide some kind of inflation protection. These are mostly selling below the minimium coupon. LIBOR will have to rise enough for the LIBOR + index to kick in. So there is a gap to the inflation protection. One Caveat the ISM (SallieMae) has not fared so well but may be a good longer term bet as it now has less than 10 years to maturity. It has kicked out some good increases on the inflation data recently. A democratic sweep of all 3 houses will dramatically improve it's quality/price. With the exception of ISM all of these listed have such !HUGE! premiums to the same issuer's bond coupons and YTMs as to make investing in their bonds of equal quality a "dubious" investment as we see real inflation in our everyday life severely eroding the value of the medium term bonds going forward. I like the fixed prferreds that are selling well below par with near term call dates. If called and some probably will be at some time you will get a hansome premium to your cost basis after enjoying the superior yield and quality. By then we would hope to see a return of +5.75% on high quality medium term corporate bond debt. That is when I will start filling my '12-'15 bond ladder rungs again. It seems there is no such thing these days that if imagined can't be invested in. I am also hedging with the DXSKX against higher rates eroding my preferreds valuations. Now we also have the PST "ETF" showing up in a very timely fashion. This seems to be a better bet than it's +20 year maturity sister TBT. These are all shorting the treasuries. I have held foreign bond positions in GIFD, MERKX,PFBDX, and LSGLX. The returns have been rewarding! However the cycle may be turning. While long term these may still outperform they look vulnerable in a US economy suffering/facing strong inflation and higher interest rates. Using the DXSKX allows me to incrementally buy into the short ten year position without the payment of commission fees. So we see again in the aftermath of the markets selling off yesterday the Treasury BULLs having their day. Even as the Treasury floated out a record $15 billion in 10 year notes, the FED increased TAF by 50% and TRCAs by 100% to the ECB and SNB. The lower rates in the long term are just unsustainable IMHO. Stagflation is here! Rates are going alot higher no matter who wins the Nov election for leader of "The FREE money world!" ReplyWhy I Am Adding PGF and AGD to My Portfolio [view article]
Thanks for the PGF idea. Disclosure: I own AOD. ReplyEditors
General Discussion on AOD
Is this a buy or a sell? Reply