I am slowly reducing my holdings in RSO when there is a bump up in share price and if there is some need to increase my holdings in something else. I will continue to hold some of my RSO, but am looking to reduce it by about half. I think the dividend at $0.80 a year is pretty secure although it could drop a nickle or dime a year. But, I can get the same or better yields from other investments.
So I have added to my holdings in CEFL, DVHl, DVYL, and MLPL and opened a new position in MORL. I am not as comfortable with large holdings of individual stocks in my portfolio. I really like ETFs and ETNs like these that provide a lot of diversification. I love CEFL because it is a 2X ETN that holds 30 U.S. Closed End Funds. The same is true for the others I mentioned. They pay high distributions and aren't going to be impacted when one holding goes bad. They're going to generally move with the market. They are not impervious to dividend cuts, of course. But then few thing are!
So, "all markets are going down," today..... Not. GABUX will be up today, too.
A chart has always been available to learn what the total return of GABUX versus other investments would have been over any period of time. Yes, that includes expenses and fees.
If you want to know where our money is invested then look at the semi-annual financial reports. Why do you write about "derivative positions" and money being "leveraged in risky positions." There are no derivatives in the latest financial report and I have never seen any in any other report that I have read for the past few years. Help us all to see the source of your claim that GABUX is invested in derivatives. I suspect that you can't and that you're just blowing smoke.
You don't seem to know much about a mutual fund you claim to own. What you do think you know is inaccurate.
What an amusing post. You cannot short an open end mutual fund. Since you wrote that you just did it, then that means you are telling a lie. Let us know how fast your nose grows as a result.
There may be a difference between "the investment world" and your personal investments. I wonder if you have considered that view?
It isn't the case that stocks in general go down as the dollar strengthens. Stocks with foreign exposure are hurt by a strengthening dollar. So what is GABUX's foreign exposure? Do you know?
Utilities do tend to decline as interest rates rise, but that isn't going to happen anytime soon. You are conflating the end to bond buying with rising interest rates. The Fed plans to continue to hold rates low.
What you aren't considering is why the Fed has ended its bond buying. For the vast majority of stocks – even those with significant international exposure – the damage the dollar deals to earnings will be compensated for by an improving domestic economy, says Bob Keiser, vice president of global markets intelligence at S&P Capital IQ. Thanks in part to positive economic indicators in manufacturing and capital expenditure, analysts’ earnings forecasts have been largely unaffected by the currency, continuing to predict double digit growth during 2015, he adds.
“The U.S. economy is improving,” he says. “That story outweighs other concerns.”
I have no plans to lower my GABUX allocation. I appreciate the tax advantage and the monthly distribution. The chances of a distribution reduction are pretty slim and the NAV is not going to tank as you predict. If GABUX could pay its distribution through the worst of the recession it can continue doing it.
But, why do you care? Surely you have sold your GABUX shares. All you do is complain about it. Why would you remain invested in something you think is going to cut its distribution and see a significant decline in its NAV?
So you either can't explain to me how ending bond buying will cause GABUX's NAV to decline or you don't know. Of course GABUX is tied to its assets and those assets are a part of the stock market. Now, explain why you think those assets will decline in value because of the end of bond buying. If you cannot explain it just say so.
Notice how this board gets a lot quieter and a lot more rational when the NAV swings back up? As one who rode out the worst of the recession in 2008-09, I am amused at the Chicken Little investors who are in a state of panic when they see their unrealized losses and forget why people invest in this fund.
Gabelli Utility Fund has several "classes" of shares in the same fund. GAUCX is class "C" shares. When you buy the class C shares with the symbol GAUCX your shares are assessed 2.12% in fund expenses each year compared to 1.37% for the class "AAA" shares with the symbol GABUX. Class C shares also have a deferred or contingent sales charge of 1% if you sell your shares before holding them for 12 months.
An impressive first post in Yahoo finance boards! You must be an insider. Thanks for letting us in on the secret that hedge funds and money manager were holding spare cash in GABUX and were liquidating the last several days. So do you think that was dragging the NAV down? Can you tell us which hedge funds and big time money managers were doing this? I thought that I was the only big time money manager who was doing it. But you tell me there are others. I am shocked. Simply shocked! Did you get your financial knowledge in a school? Did you get a degree from the Barnum School of Investing?
Do you like dogs? Ever have a dog named Bear? Poor olde bear.....
Which long term chart are you looking at? Are you looking at a chart of the NAV or a chart of the total return? Sounds like you're looking at a Yahoo chart of the NAV. Try Morningstar instead and look at total return. You do know that there's a difference, don't you? Did you do know that GABUX has beaten the S&P500 and the Dow over 10 and 15 year periods and is even above the Dow YTD. Those kinds of facts don't seem to mean much to you or you don't know them. You already demonstrated that you don't know what's in the GABUX portfolio, what its turnover rate is and what its return from operations is or how it is figured. Nor do you know how the NAV is calculated each day.
So why are you posting here about things that you either don't know or don't understand?
You really don't have a clue what is in the portfolio and the financial report, do you? It isn't rocket science. GABUX has quite low portfolio turnover. It isn't hard at all to read the financial report and see stocks that the company has held for a long time that still has appreciated value even after the decline in NAV since June. That isn't guessing. It's simply reading the financial report.
They bought over a million shares of Edison and today it closed at $57.72. There's about a $25 million gain in that single stock. Look through the holdings and you'll see plenty of assets that have been held for years that have unrealized gains. The fund has about $400 million in cash and as of June 30 had $237 million in unrealized gains. Even if the fund lost 10% of those unrealized gains it would still have over $200 million in unrealized gains.
The point remains that selling assets to pay for redemptions doesn't change the NAV and what you posted doesn't speak to that claim. Redemptions don't change the NAV.