This blog provides comments and thoughts on the financial markets and specifically—dividend producing investments.
(Updated July 2013)
PHD is scheduled to go ex-dividend on May 14. This is a long term hold and is a bet for when the next “tightening cycle gets underway” which is probably over a year away. PHD is a play on rising interest rates and when Bernanke gets around to raising rates. load up. But NOT now, just hold a small position for the yield. HOLD your position, do not sell.
I have talked about PHD…here is the link.
(May 24 Update: Investors who had Never even heard of floating rate bond ETFs six months ago are now pouring money into these funds. PHD is soaring into the stratosphere and is at $14.51. Every where you look, blogs are talking about floating rate funds. So what to do. I am mad as H at myself for not taking advantage of this trend back in December. If you can handle the risk, buy PHD for a long term hold but realize you may see a temporary decline. The technical charts are showing PHD is hitting resistance and I simply dont want to boy at the top. Hopefully we will get a pullback and entry point.
Bernankes comments this week fueled speculation about rising interest rates. One this frenzy calms down, we May get a pullback. So I am waiting for more reasonable prices……… which may never come!!!!)
(Update May 23; Strong support for PHD. It appears we will not see a pullback to $13.60 as I had hoped. I would NOT buy at these prices.)
The price will probably drop to the $13.60 area and this would be a good place to buy more, or take a new position.
A single position should never represent more than 1% of the total account. It pays over 6% and is currently priced at $14.24
(From prior post: “I was fascinated by a comment that was posted on a financial site that I respect: floating rate funds are usually purchased by astute investors in advance of interest rate hikes. The idea is that as the Fed increases interest rates, the dividends paid by floating rate instruments will also increase.”)
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I am not an investment professional. You must do your own research before buying any position. All gains or losses that you realize are based on your choices.