Other convertibles? Yes but only convertibles- WFC, BAC, KEY and a few others. I own zero REITs but a few energy LPs which I'm aggressively selling call options against.
Depending on her age I'd slowly start selling the S&P and move the cash into a short term bond fund if available and earn next to nothing until we have another correction. Selling 1% per quarter would be prudent until you're closer to 80% equities.
I know that until this year, none of my IRAs have kept up with the 500 so you could go to 10% cash today and still be ahead of me. Selling call options in a robust market hasn't been the best strategy over the period in question.
IRA #1 took a 1% position in the BAC/pfd today at 1116/share.
My cash is now down to 26% is this account. Equities that yield over 4.5% make up over 30%.
Stocks hitting new highs today.
We lose WW3 and like the Germans in WW1 are forced to pay war reparations to the victor. In our effort to not lose ww3 we'll financially lose as Eisenhower warned--
"Eisenhower expressed his concerns about the dangers of corporate control of Congress and massive military spending, especially deficit spending and government contracts to private military manufacturers, and coined the term "Military-Industrial-Congressional Complex"
Every year I pay tens of thousands of $$$ for insurance-auto, life, health and home, where I seldom see any return but it does give me peace of mind. I do like sleeping at night and that's how I think about gold.
I started buying gold in 2005 and I've never sold any of the metal but I have traded GLD on occasion.
For the record I also own silver but I use some of it for gifts and charitable contributions.
Would there have been less risk in buying gold last Friday?
What I achieved though selling the put options-if gold goes up I earn a small premium and the value of my existing gold stays in the 5-10% asset allocation I desire. If gold drops I'm forced to buy more through the liquidation of some of my bonds and I again I achieve my desired asset allocation for the metal.
Apr 25, 2011 11:44 AM
"Bought More Gold-$1500 plus mark."
As you can see by a post I made 2011, I'm committed to owning gold. Over the years I've occasionally sold a few out of the $$$ put options against GLD when it trades at new lows and I've managed to make a profit. My goal is to keep about 5-10% of my net-worth in the metal so in my case it's time to buy more.
She upped her position by 50% to 2.92% of her assets. It's currently her 12th largest position.
It goes XD in early August and she plans to sell call options for added income very soon.
I also bought more shares in my personal account.
August 175 call options are cheap which indicates to me that Mr. Market is skeptical.
I passed on selling calls so chances are the stock tanks after earnings again.
The current tax laws favor dividends over interest for me personally. If dividends were someday taxed the same as interest bearing instruments then the value of this security would fall. And as you point out-interest rate risk could hammer the value of this preferred and all of my so called high yielding securities.
10 year CDs currently pay over 3% but after tax you may see less than 2%. Whereas, if you're like Grandma, you're netting over 6% after State and Federal tax, which in her case is what she needs to live on and she can pass on the stock to her family after her death.
They are much risker in my IRA but I'm willing to take the risk just so I can bring my average yield up to 3% which is about what I'll start to withdraw when I turn 60 in 2018.
"The Preferred Stock is not redeemable by us at any time. On or after January 30, 2013, if the closing price of our common stock exceeds 130% of the then-applicable conversion price for 20 trading days during any period of 30 consecutive trading days, we may at our option cause some or all of the Preferred Stock to be automatically converted into common stock at the then prevailing conversion rate."
I'm not concerned.
The conversion right gives me protection against runaway inflation but I'm primarily in it for the high yield.
What are qualified dividends?
This account is currently 20% bonds which will be soon liquidated and moved into equities.