May 9, 2017
Back in March, the technical indicators for BGT Blackrock Floating Rate Trust started to turn over. The price continued flat BUT have now started to turn down. We have a decent price appreciation and have received some modest dividends. Even tho there is a dividend scheduled for May 11, we are NOT waiting.
The down trend for this holding in the Core Portfolio seems odd with the expectation that the Fed will continue raising rates, but we still suggest you SELL BGT.
Trump is finding it extremely difficult to get his programs passed and even his own MORONIC party is pushing back. With the uncertainty right now in D.C. we are erring on the side of caution and getting out of positions that are showing any weakness. See below………………….
We own several of Gundlach DoubleLine bond funds:
Prominent investor Jeff Gundlach offered a bearish call on U.S. stocks on Monday at the closely followed Sohn Investment Conference in New York.
Gundlach recommended that investors short — or a bet on a fall in value — the exchange-traded SPDR S&P 500 ETF Trust SPY, -0.02% or SPY, which tracks the S&P 500 index SPX, +0.00% and invest in emerging-market equities. The DoubleLine Capital founder, known for his prowess in fixed-income securities, called out specifically a long bet in the iShares MSCI Emerging Markets ETF EEM, -0.02% Gundlach recommends that trade with 1 times leverage.
Well….this certainly goes against the current thinking on interest rates.
We do read the commentary from realinvestmentadvice.com:
“With bonds currently in between overbought and sold, no new positions are recommended currently and we are still maintaining our expectations of rates reaching the 2.4% range over the next month.
Let me be clear, I ultimately expect rates on the 10-year Treasury to reach 1.5%, or less, within the next 24-months which is why I continue to aggressively buy fixed income on opportunity. Over the next decade, based on current equity valuations, bonds will outperform stocks on a total return basis.”