I have read all the critiques of the UBS ETNs and understand the risks. But, I hold MORL, CEFL, BDCL and DVHL in my portfolio. I can accept the risk. But, my risk tolerance is built on being consistently aware of how UBS itself is doing, how the indexes that those ETNs track are doing, and what other alternatives are available in the market. Two of the dangerous things investors, especially retirement investors, do is not using enough baskets for their eggs and walking away and not monitoring them.
Mint, I absolutely agree with you that GABUX is not a wise place for a younger person to invest tax deferred dollars. I was thinking about my earlier response and want to make it clear that I think there is a difference between tax-deferred investment in GABUX when you are 20-50 years old and when you are approaching or in retirement and are choosing to take distributions from those tax-deferred accounts. I would never have invested in GABUX and did not when I was 20 to 50. Now in retirement and taking distributions I view GABUX, as I said, as one piece of an income portfolio. I am not concerned then about NAV erosion. I view it as a nice annuity replacement that will continue have some value and even with a big cut in distribution rates it is better than an annuity. But when I was younger I sought growth, not income.
I understand what you're saying Mint. I do hold some GABUX in a regular IRA. Of course I pay regular income tax on any distributions that I take. That would be true, of course, for any of the investments that I hold in a regular IRA. Since those shares are in an IRA I don't have to be concerned about the cost basis declining with the ROC. Even after deducting my regular income tax from the distributions, I receive a double digit yield from the distribution. It beats an annuity. I think it would be foolish if all of one's tax deferred investment was in GABUX. But, I don't see an issue with using GABUX as one component in a tax-deferred portfolio for exposure to utilities and energy with monthly distributions.
Look, Jr is playing troll again with my ID. What a cute little game he is playing. Always be sure to check the ID history on this board before deciding if it a troll or not.
The Gabelli website has a calendar for the distributions for the entire year. The November date has been listed all year. It is November 25. So you are both incorrect. The date of record for GABUX is today. Ex-dividend date is tomorrow and pay date is tomorrow.
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.