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GETTING INTO FLOATING RATE ISSUES. BUY BGT.

Welcome to Dividend Income Investor

October 23, 2016

LOL We are SICK of this election.  Seen on the interweb:

“Would you rather be burned alive at the stake accused of witchcraft OR read another post on why one candidate is better than the other.”

We previously recommended the book Guilty as Sin by Edward Klein.  We are half way thru this tome and can’t stop reading!!!!!  We recommend you read it.

 

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Well, we are approaching the end of the “Sell in May and go away” period which is the end of October.  So we are entering the period which is, theoretically, the best period to own stocks.  Our crystal ball is still broken so only time will tell.  Below is listed another ‘buy’.

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We have been selling interest rate sensitive positions, meaning those that would be hurt in a rising environment…and focusing on investments what would do better in a rising rate situation.

Today we are buying BGT a floating rate ‘trust’.  The current yield is 5.5%.  After going ex-dividend Oct 12, we have seen declining momentum in BGT and have stayed away.  But it appears to be stabilizing and turning back up. 

This should be a good position is a rising rate environment.  Even if the Fed does not raise rates, this is a good investment with a decent yield.

BlackRock Floating Rate Income Trust’s (BGT) (the ‘Trust’) primary investment objective is to provide a high level of current income. The Trust’s secondary investment objective is to seek the preservation of capital. The Trust seeks to achieve its investment objectives by investing primarily, under normal conditions, at least 80% of its assets in floating and variable rate instruments of US and non-US issuers, including a substantial portion of its assets in global floating and variable rate securities including senior secured floating rate loans made to corporate and other business entities. Under normal market conditions, the Trust expects that the average effective duration of its portfolio will be no more than 1.5 years. The Trust may invest directly in such securities or synthetically through the use of derivatives.

https://www.blackrock.com/investing/products/240195/blackrock-floating-rate-income-trust-usd-fund

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CLICK HERE FOR Dividend Income Investor Core Portfolio SHOWING current holdings.  WARNING:  MOST OF OUR POSITIONS ARE INTEREST RATE SENSITIVE.  IF RATES GO UP QUICKLY WE WILL WANT TO START SELLING.

CLICK HERE FOR our suggested financial websites.

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