Business Development Companies have been on a tear for years.
Watch BDCS Wells Fargo Business Development Company ETN, a “fund” of BDCs. Paying over 7%.
We see continued strength in this sector and BDCS can be purchased in small amounts. But we may see a possible pullback in late January to add new positions or buy. Keep in mind we have already seen big gains in this segment but an upward trend appears to be likely.
I like BDCS as you get the diversification of a fund vs. buying a single issue. As an alternative, BDCL is the leveraged version offering 13%. This of course is riskier.
As always do the due diligence to see if this position is right for you. Plan on holding this long term, possibly for years….and never buy for more than 1% of your portfolio. ETNs are only as ‘good’ as the issuing Company which is Wells Fargo: Most people would doubt WF has much of a chance of defaulting on anything!!! Again, never buy more than 1% of the portfolio.
Stocks. Upward trend with possibly a small pullback. If you are in stocks I would hold on.