Of course the decline in NAV is a credible and serious concern. It should be for every investor. It's why one should consider the role that GABUX plays in your portfolio. It is not going to move up or down quickly. It is a slow mover with only around a 20% turnover rate and paying out $.07 a month in distributions.
I know that I am accused of all kinds of preposterous things on this board, but I have never said that GABUX is a good investment for everyone. It is an investment to seriously consider if it fits your asset allocation strategy. I think that a good asset strategy is diversified and that it takes into account your age, acceptable risk level, and your goals for your investments among other things.
For me GABUX plays a role in my financial plan. It is one of 23 (I just added another) stocks and funds I own. I have no intention at this time of selling it. The only reason I would sell it is if I thought the distribution was going to be cut to reduce the yield to less than 9% and the NAV continued to fall. I don't see that happening. But I could be wrong. It's why every investment involves risk. There are no sure things.
I do know that GABUX fell from the $9 area to the high $4 price between 2008 and 2009. Despite the whining and complaining, GABUX has maintained an NAV generally between $5 and $6 for the past three years and paid its regular distribution through that entire period of time.
I don't think the market is going to repeat what happened in 2008 and early 2009. So I think GABUX will continue to follow the general market trends and range between $5 and $6 until the market rebounds strongly and a rising ride lifts GABUX above $6. In the meantime I take my cash distributions and I reinvest them in other stocks and funds because I own more GABUX than I think that I should in my portfolio. Rather than sell any shares I simply increase my other holdings slowly. to achieve the balance I have in mind.
I also use GABUX to diversify my holdings, but it is disheartening to see a 25% drop in any investment in a years' time (not counting dividends.)
I DO reinvest dividends though, which of course is averaging down my cost basis at this time, with the expecation that eventually utility and NG stocks will rise. I own other NG utilities (no NFG though) and they have also suffered in the downturn.
I for one appreciate your comments. I have only been in this fund since Summer of 2011. I don't blame you for anything, and I don't think anyone but our multiple personalities troll does. You have more experience with this fund, so I ask, but ultimately, you got to do your on DD to survive in this market. I have several years before I retire and I am extensively diversified, so one fund or stock does not make or break me. Thanks for your response.
There's no telling where this market is headed. I think Mario will have to make some adjustments in the holdings if he already hasn't. The portfolio claims they use options, buy writes and other means to make money but it hasn't seemed to help much in the past few months.
My unrealized loss being in this fund for almost two years is now around $14,000.00 but with the distribution I'm still up around $18,000.00 total return.
I agree with you Fred, I will sell if the distribution is cut. I also use a portion of my distribution for reinvesting in other funds and I add here from time to time..
Like I said before I almost pulled the plug here the last time we were at $5.60 but held on and we hit $6.66 I guess that would have been the time to sell. But, at the same time it showed me this fund has the ability to rebound.
If the market takes off again we should be able to rebound. The holdings in this fund can't stay down for ever unless the entire market continues to get hammered, in that case I would rather be here collecting some income and some dry powder for buying at the bottom..