Market sucks right now. No good signs, just a muckety-muck.
Am wondering if I should take the 22k loss on FSC, the 27k loss on PSEC, the 10k loss on JMI, and the 18k loss on ARR and just give the finger to the BDC and REIT sectors. Course, having a few drinks tonight makes it easier to wanna do that.
I've had much better return with lower dividend paying ETFs than these deep in pocket high yield issues. I don;t like the idea of investing in 2-5% dividend payers bc I don't believe the risk is mitigated in any single-issue stock. I am becoming more convinced that ETF, at least now, are safer and better fit for me.
I think ETF is the way to pay that.
There is also a new ETF that appeared which invests in only the IBD top 50. I think it started trading today. FFTY
Picked up a small position with 300 shares in FV - a momentum ETF that uses relative strength as basis of share representation and rebalances based on RS each week. Costly at .98% fee but has outperformed S%P by some 40% since summer 2014 when it appeared.
Have read some good articles also on this ETF and am also looking at other 'strategic ETFs' that can be bought and sold based on macro variables in the market and to compliment my buy and hold core ETF portfolio.
What do you think of these new ETFs that depart from traditional sector and asset allocation angles?
I agree. NYMT is a good one and I have it. My regret is that I also have ARR, FSC, PSEC, and JMI but not enough NYMT or NRZ.
NRZ is the best performing high-dividend payer out there right now and most promising one for the near future.
There no safe harbor options available to new retirees that provide reasonable ROI. Those have traditionally come in the way of pensions, social security, rental income, and bonds. Bonds are threatened with the new rate environment. For most everyone only social security and rental income qualify as safe harbors with a return. At least that is what I figure upon my own retirement.
Other than real estate which returns rental and so is responsive to inflation, there is only speculation available. My own situation is one where I expect to retire early and rely on SS at 62 years, pull in rental income, and draw upon my equity investments - my bond allocation is approximately 15% bc there is no money to be made in bonds.
So like most everyone, I will have the majority of my assets invested in equities and sparingly in bonds - a healthy portion in real estate that generates rental income and is managed by professionals who skim 8% off the top.
Equity allocations follow Paul Merriman's modified FAMA 3-factor model (he calls it the buy and hold portfolio) and it has worked reasonably well for me. My problem is the lack of discipline in following it as about 1/2 my equity exposure is individual stocks - largely BDCs, REITs, and other dividend shares. I'm correcting that and hope to move toward 75% of my equity portfolio being invested in ETFs and mutual funds that correspond to Merriman's approach by the time I retire. The other 25% will be in those dividend payers and some speculative shares that are available at the casino.
No very good solutions exist. My dad used to be able to pull in 5%+ CDs but we won't see that unless the US gov't wishes to spend its revenue on interest on the debt. So we have to roll the die and assume higher risk at a time in life when we wish to contain risk as much as possible (and still not exhaust our savings through draw-down.