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The Biggest Mistake A Preferred Income Investor Can Make
The Biggest Mistake A Preferred Income Investor Can Make Not for individual resale.”
Ever see that label on a box of food, and scratch your head? Like who’s buying this big-mega bag of Chips Ahoy for the purpose of reselling the “individually packaged” helpings of cookies inside?
One of our best holding is pff, it did plummet recently but we are still holding it and may add more later
I get my exposure to preferred's through an oef (PFANX). Currently, PFANX makes up about 5% of my hybrid income sleeve. In addition, I hold FISCX a convertible securities fund along with FRINX which is a real estate income fund in this sleeve as well. And, at times, I've held a commodity stratey fund (PCLAX & PCRAX) within this sleeve which has, at times, been good income generators. I've been thinking with commodity prices now being depressed this might be a good time to establish a position in a commodity strategy fund. The current yield listed by M* for PCRAX is about three percent. I've held them when they were kicking off a yields north of 10%. I generally, limit my exposure to these type of speciality funds to no more than a 5% weighting, for each, within the sleeve. The number of fund members within this sleeve has ranged form a low of nine to a high of twelve. Currently, there are eleven fund members within this sleeve. Should I add a commodity strategy fund then this would make number twelve.
OS: when you say a fund makes up, say, 5% of a sleeve, what i'd like to know is how much % of your total portfolio that fund is. possible to include that? i mean, your hybrid income sleeve in total could be but 5% of your portfolio, making any fund within it a tiny % of the total. right?
Currently, the hybrid income sleeve makes up 26.56% of the portfolio as of May 15th market close.
Generally, the income area of the portfolio carries a neutral weighting of 40%. With the hybrid income sleeve currently at 26.56% of the portfolio and my income sleeve at 12.73% leaves me a little short of the targeted 40% desired weighting for the area as a whole but it is within an acceptable range at 39.29%. Thus, I have been buying in the income sleeve with the portfolio's monthly income generation.
The neutral weighting for the income sleeve is 15% and for the hybrid income sleeve it is 25%. Each of these can carry target weights of + (or -) 5% from their neutral weightings with the area as a whole not being less than 35% nor greater than 45% of the portfolio as a whole. The amount of each fund held can varry based upon the number of members within each sleeve and its desired influence. Some hybrid funds might have no more than a 1% overall portfolio weighting while others might be upwards towards the maxium allowable of 6%.
Currently, hybrid type funds make up 43.23% of my overall portfolio and total eighteen in number. My hybrid income sleeve found in the income area accounts for 26.56% of the portfolio. The other two hybrid sleeves are found in the growth & income area. The domestic hybrid sleeve accounts for 8.89%; and, my global hybrid sleeve accounts for 7.78% of the portfolio.
My reason for a large number of funds, currently around 50, is that this limits fund manager and strategy risk. And, when one fund falters, within its sleeve, then there are the other members that can offer production and can continue to propel the sleeve. Including my two cash mamagement sleeves there are a total of twelve sleeves split among four areas of investmest within my portfolio.
Thanks again for your question. I am hoping that this gives you insight as to how Old_Skeet rolls.
Comments
Currently, the hybrid income sleeve makes up 26.56% of the portfolio as of May 15th market close.
Generally, the income area of the portfolio carries a neutral weighting of 40%. With the hybrid income sleeve currently at 26.56% of the portfolio and my income sleeve at 12.73% leaves me a little short of the targeted 40% desired weighting for the area as a whole but it is within an acceptable range at 39.29%. Thus, I have been buying in the income sleeve with the portfolio's monthly income generation.
The neutral weighting for the income sleeve is 15% and for the hybrid income sleeve it is 25%. Each of these can carry target weights of + (or -) 5% from their neutral weightings with the area as a whole not being less than 35% nor greater than 45% of the portfolio as a whole. The amount of each fund held can varry based upon the number of members within each sleeve and its desired influence. Some hybrid funds might have no more than a 1% overall portfolio weighting while others might be upwards towards the maxium allowable of 6%.
Currently, hybrid type funds make up 43.23% of my overall portfolio and total eighteen in number. My hybrid income sleeve found in the income area accounts for 26.56% of the portfolio. The other two hybrid sleeves are found in the growth & income area. The domestic hybrid sleeve accounts for 8.89%; and, my global hybrid sleeve accounts for 7.78% of the portfolio.
My reason for a large number of funds, currently around 50, is that this limits fund manager and strategy risk. And, when one fund falters, within its sleeve, then there are the other members that can offer production and can continue to propel the sleeve. Including my two cash mamagement sleeves there are a total of twelve sleeves split among four areas of investmest within my portfolio.
Thanks again for your question. I am hoping that this gives you insight as to how Old_Skeet rolls.