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Fifth Street Finance Corp. Message Board

  • thewisejman thewisejman Aug 16, 2013 12:15 PM Flag

    I pronounce this market DEAD

    and you really need to consider getting out of most of your fixed income assets especially REITs now before it becomes too LATE.

    I simply cannot see there are any reasons the market will continue to rise in the next few months but the chance of it being corrected for 10% or HIGHER is at least 60% at this time.

    If Obama chooses Summers to be the next FED chief, you can expect the correction will be much higher than if Yellen will be chosen. I guess Obama may have to yield to MARKET wisdom and pick Yellen. If Merkel wins her re-election at around Sept. 22 in Germany, better watch out, the whole Europe will tank. German will refuse to continue in bailing out Spain, Italy and Greece. If the FED has the courage to confirm bond tapering in their Sept. FOMC meeting, the market will go down into the Florida sink holes, that is a guarantee. If they delay it to Oct., then the market may rebound a bit but stays very volatile and then it will tank worse. The longer they will delay it the worse the correction will be. There is no win-win situation.

    Sell your deadwood (all REITs and other fixed income) and get your CASH ready, buy your favorite stocks such as FSC every time the DOW drops 150 points. Keep buying and the market will rise after it bottoms out. How long it will take? I absolutely have no idea.

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    • Many REITs are not fixed income, nor are they all holding fixed-rate, long-duration bonds. The ones that do are well hedged. I'm perfectly willing to hold modest positions in hybrid mREITs such as TWO, MTGE and IVR. And I'm comfortable with my NRF, NCT and NRZ. I lightened up a little more on the RSO today and now own only 3000 shares. (The RSO is free since I've gotten my principal and then some. If they don't follow up on what they said they will do, I'll sell out of RSO. I'll give them another quarter.)

      I took some cash and purchased some SJNK today. It's a safe long-term buy-and-hold bond fund.

      • 1 Reply to sonnenwayne
      • Yea, I know REITs are not fixed income, neither are BDCs. As a matter of fact, if some of them tank again, they will provide very good values for LT. I do like RSO, NRF but unwilling to hold them at their current prices because I believe they will drop further. I also like MTGE, PMT and IVR, even TWO. But will not buy any right now for the same reason. If bond tapering is officially announced, all REITs will drop like a rock and there will be many for the picking. I am not sure there is any safe long-term hold anymore, but thanks for the tips and will take a look at SJNK.

    • Every single REIT except 7 on my REIT watch list are tanking today, the one rose the most (only about 1.3%) is PMT.

5.72-0.04(-0.69%)Sep 23 4:00 PMEDT