4 Comments

PHD Floats Your Boat. Buy. 6.8%

July 29, 2013

SPY:  1686.00

(Update August:  Buy around $12.60 altho it may drop a bit.  Update August:  More and more of the financial advisors that I respect and listen to, are recommending the floating rate segment.  Buy now while the gettin is good.  You should also be selling medium and long term bond funds, in your IRA and 401k.

Never heard of floating rate bond funds???  You are not alone.  People are just discovering this group, and are pushing money into these funds because everyone knows interest rates are going UP.  We just don’t know when.  It could be a year.  Depending on the financial guru you read and their perspective, or who you believe, floating rate funds May or Should do better than bond funds, or at least not decline In a Rising Rate Environment.

The interest rate is adjustable in these funds.  This means that as interest rates rise, you would expect the interest payments you receive from a floating rate fund to increase.

The point is……………while we own this fund expecting rates to rise (eventually) we are earning almost 7%,.  Pretty good deal.  Better than a CD.  Click Here to read more about floating rate bond funds.

If you are not already in, buy PHD Pioneer Floating Rate Trust…it is scheduled for ex-dividend on July 31 and you may be able to get a lower price.  Everyone should own a floating rate position.

Price today is $13.13.  Since I last mentioned PHD it has stumbled in sympathy with the general bond breakdown in June.  But you are now getting a bargain price.  Buy up to 1% of the portfolio.  (See my previous post for more infor.)

There are numerous floating rate bond funds and etf’s out there.  So do some research to see what might be better for you.  They all appear to track the same tho. (PFLT, FRA, BKLN, are others, and I know Fidelity has a fund.  These are good in your IRA)

I mentioned VNR a few weeks back and it has gone ex-dividend.  It is holding nicely and we can watch to buy more at lower prices.  Support is $27.10 this may be a good price to buy.  (See prior comments.)

Funny Line of the Day:  If you want a stock to go down, buy it.

Go to “HOME” (top of page) for the most current posts.  (Please respond to POLL Click Here)  This blog discusses dividend paying investments that I find appropriate for myself…..and for investors seeking dividends and income.  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.

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4 comments on “PHD Floats Your Boat. Buy. 6.8%

  1. […] I have discussed bank loan funds ie floating rate securities in the past.  PHD is a good holding that pays over 7%.  Quite frankly this thing has been declining for the last six months due to all the economic noise. but I really don’t care.  The funds are a bet on rising interest rates which will happen eventually.  In fact we could be waiting for a year.  But in the meantime you earn a reasonable yield.  And you want to be in this position early.  $12.11 would be the best entry point. […]

  2. […] you have not purchased floating rate funds, watch PHD  It should be going ex-dividend next week and you may be able to get a lower […]

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