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growingmoney

growingmoney
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  • American Realty Capital modestly higher after earnings beat [View news story]
    Looks like a long term hold to me. What was all the earlier concerns about?
    Jul 29 05:37 PM | 1 Like Like |Link to Comment
  • AMD +1.3% AH on strong Intel results/guidance [View news story]
    I hope we can finally break $5.
    Jul 15 11:50 PM | 2 Likes Like |Link to Comment
  • Realty Income called a Sell at Morgan Stanley [View news story]
    @m19c46, I learned the hard way too, but it makes business sense that they don't have your best interest at heart if you're their competitor. lol
    Apr 8 01:18 PM | Likes Like |Link to Comment
  • Bank Of America: A 7.2% Yield For Your Retirement Portfolio [View article]
    seanthome,

    I see what you're saying. Those risks are always there. However if you are comfortable with the yield rate then you should be ok. Yes, there are cumulative and non cumulative preferreds. Of course if you want to be safe, you would go with the cumulative ones.

    To reduce or eliminate risk, I mentioned earlier, the preferred needs to meet certain criteria, such as below par, cumulative, great rating, high yield, etc.
    Feb 25 01:24 AM | Likes Like |Link to Comment
  • Bank Of America: A 7.2% Yield For Your Retirement Portfolio [View article]
    spparowlake,

    What is the risk?
    Feb 24 10:11 AM | Likes Like |Link to Comment
  • Bank Of America: A 7.2% Yield For Your Retirement Portfolio [View article]
    Dr. Jackpot,

    Yes, I've new to preferreds, but I have many years of experience in investing. While I have not been in your mentioned situation, b/c 83 years old is many generations away for me, but I understand perfectly what you mean.

    I did mention that you have to be willing to hold preferred until maturity, but I should also add that you should not be solely dependent on this one preferred. I was assuming that you would have a diversified portfolio or a diversified income stream so you can account for unexpected situations.
    Feb 22 06:55 PM | Likes Like |Link to Comment
  • Bank Of America: A 7.2% Yield For Your Retirement Portfolio [View article]
    niuecon,

    Yes, you have listed the risks with preferreds. And preferreds can be traded on the open market like stocks, albeit less volatility. So yes, you can lose money if you sell below your purchased price, as with any security.

    I was going by several assumptions, mainly that if you purchase below par and you are willing to hold your preferreds until maturity or eternity, all those risks are negligible. Also, the preferreds need to have cumulative distribution, which means that they will have to pay the dividends eventually, assuming that they don't go out of business.

    So in summary, these are the criteria to eliminate or greatly reduce the risks.
    1. Buy a highly rated preferred.
    2. Buy below par.
    3. Hold the preferred until maturity or eternity.
    4. Make sure it is a cumulative preferred.
    5. Make sure you are ok with the yield.

    If you meet all those criteria, even if the interest rate goes to the moon, you wouldn't care.
    Feb 22 01:15 AM | Likes Like |Link to Comment
  • Bank Of America: A 7.2% Yield For Your Retirement Portfolio [View article]
    What do you mean by "When rates rise bye bye to your principal?"

    If you hold a preferred, you should receive the same distribution regardless if the rates go up or down. Assuming you bought the preferred below par and you will hold it until it's called, you won't need to worry because when they call the preferred, you will receive the par price (usually $25). So even if the interest rates go up to the moon, you get your initial investment back (and more), so there is no loss in principal here, right?
    Feb 21 03:09 PM | Likes Like |Link to Comment
  • Bank Of America: A 7.2% Yield For Your Retirement Portfolio [View article]
    I have started looking at preferreds recently and realized that it is a great thing to add a portfolio. It is a great financial instrument if used properly. I'm still learning.

    My strategy is to use safe high yield preferreds to add stability in the portfolio and generate income. The extra income can stay as cash while the market is up, and be deployed to use for purchase of additional equities when the market is down. Any thoughts?
    Feb 21 11:06 AM | 1 Like Like |Link to Comment
  • Bank Of America: A 7.2% Yield For Your Retirement Portfolio [View article]
    Generally, everything in a ROTH IRA is tax-exempt. The distributions should fit in this general definition and will almost certainly not be taxed. This is the advantage of a ROTH IRA.
    Feb 21 10:59 AM | Likes Like |Link to Comment
  • As Production Resumes At Its East Dubuque Facility, Here's Why I'm Long Rentech Partners [View article]
    Thanks Chris for clearing that up. The secondary issuing would scare me off. With no secondary issuing and no other material negative event, I think RNF should be bottoming. It may be good to start building or adding to a long position. Do you agree?

    P.S. Oh right, I just remembered. They may cut distribution and but that news may be factored in by now.
    Feb 9 02:42 PM | Likes Like |Link to Comment
  • Look For Tesla To Dramatically Raise Its Guidance: $500 Target Remains [View article]
    It's usually people like you with vision that will make millionaires.
    Feb 9 02:37 PM | 1 Like Like |Link to Comment
  • As Production Resumes At Its East Dubuque Facility, Here's Why I'm Long Rentech Partners [View article]
    I wonder what is going on with RNF. It was doing well in the beginning of January and then it suddenly fell off the cliff again. Something bad seems to be brewing? Could it be the secondary issuing?
    Feb 9 01:17 AM | Likes Like |Link to Comment
  • Look For Tesla To Dramatically Raise Its Guidance: $500 Target Remains [View article]
    I think the dot com bubble really showed which companies has leg and which ones don't. There were many people who made millionaires during that time. The smart ones were the ones that kept the money after the crash.
    Jan 28 11:30 PM | Likes Like |Link to Comment
  • March Madness Trading Challenge [View instapost]
    Arrghh.. Looks like AMD was picked. I'll go with long ALU. Thanks.
    Mar 7 05:14 PM | Likes Like |Link to Comment
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