capjak
Full time employment: Posting here.
WFC-L 6.4% current yield, goes ex-dividend next week, a juicy $18.75 of qualified goodness.
Nice (15 shares for me)
WFC-L 6.4% current yield, goes ex-dividend next week, a juicy $18.75 of qualified goodness.
A look at the 1 year chart for WFC-L shows a consistent pattern of decline in the days after ex-dividend. This is an opportunity to add more shares I am hoping the price will come down to the $1,145 area, at which point I would likely add a few more shares.
I'm still lurking on this thread. Here is a piece that goes into some detail on the pattern you mention:
Boosting Returns On A High-Yielding Wells Fargo Preferred - Wells Fargo & Co. (NYSE:WFC) | Seeking Alpha
Mulligan, Coolius or anyone else. What do you think of BGLEI, trading at 102.80 to 103.00 today. X d is 3/8 Yield at 103 6.92%
Mulligan, Coolius or anyone else. What do you think of BGLEI, trading at 102.80 to 103.00 today. X d is 3/8 Yield at 103 6.92%
I forgot to add, Golden, it is the size of the preferred issues that screams call. For example BGE, has only 4 preferred issues. They cumulatively yield close to 7% collectively, and are nearly 200 million dollars in total issue. Considerable savings could occur by simply calling and reissuing in low 5% range which is current rate for current utility preferreds of save investment grade ratings not yet callable. Sent from my iPad using Tapatalk
Thanks Mulligan. You break it down in such clear language. I spent some time yesterday looking for a preferred to purchase in a taxable account for our account as well as my Mom's. The three issues I own now yield 6.3-6.46. I kind of wanted to stay in or above that range. I've been waiting for AILLL to drop but it has been stubborn. I've looked at Peco and UNUM( two of your favs) but they aren't eligible for the 15% taxable rating and that's a sticking point for me. Once RMD's start for us, next year for DH and myself 2 years later we won't be able to avoid the 25% and eventually the 28% categories, so I'm trying to minimize the damage. I did ponder CHSCL( or was it CHSCM) but those issues seem somewhat more volatile. Thoughts?
Golden Sunsets,
I have owned CHSCO and CHSCL since their IPO. This is a strong co-operative that will survive the tough times we're currently going through.
CHSCO is volatile now because the co-operative recently converted some of its other debt obligations into CHSCO - so the new owners are selling it. I believe this is why CHSCO has been weak lately, but it will pass.
CHSCL is a large issue and the first one that is held mostly by institutions and the public; weaker hands, who sell quickly and nervously at any hint of trouble. This is likely a permanent feature, so just got to live with it.
The agriculture business is under pressure from the commodities/oil collapse, so at this time outlook is not great for CHS. But I am optimistic for the future. And the income stream will continue - which is what you & I should be focusing on.
CHSCO would be the best of the issues at this time - once the selling is over, the owners are mostly member-farmers who are strong hands. the volatility should go down then.
Hope this helps.
In addition to what Coolius said, CHSCL and CHSCM are very liquid preferreds which means they trade in higher volume. The higher the volume a preferred is, the more it tends to "mirror the market". When market sagged a week or two ago, you noticed these issues tanked in
unison. This will also provide you an opportunity for a better entry point if you monitor it.
Yes, I got my Peco and Unum stuffed in my tax free. My HSA is just essentially KTH. I understand your tax bracket situation as that is where I am at now. To be honest there are just very few 15% tax qualified I am interested in. There are many that pay higher, but the risk is greater and they are not what I consider a "safe bond substitute". In fact I see the higher yielding ones are just competition with buying common stocks with possibly poorer long term prospects.
Coolius and I both bought some SSW-C, which is a containership company that yields close to 10% and if they do not call by next January the dividend increases 25%. It is currently under par and historically has always paid. But I dont classify this one was a "safe utility preferred" substitute.
Like you, I will not go below 6.25% range as I do not want a 5% plus preferred due to more price loss risk if rates rise. So in taxable 15% issues I am only really only in CNLPL/CNTHP and AILLL/AILNP.
Over 30% of my portfolio is in AILLL/AILNP. I would probably sleep just as well if it was flipped to CNLPL/CNTHP but my situation is unique. I dont live off my investment money and in fact never will. The dividends just get reinvested. If I was living off a portfolio, I would not act in this manner though.
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I hear ya. The only reason we will ever need to withdraw from our portfolio is for weddings, kid house downpayments, grandkid education funds or when the extra RMD related taxes kick in. On the one hand that means that we can afford to be a little adventurous. On the other hand - why bother. But I enjoy the exercise of portfolio care and maintenance. Kind of like tending a garden.
The containership industry kind of scares me. I'm a scaredy cat.
As well you should be! Seaspan is considered "safer" (and yes make note the term safe is in quotations) due to its long term contracts and better capital structure. I only bought 300 shares myself, and that is the limit.
If you havent met your personal limit yet, I would just keep trying to be patient and look for AILLL at $26 and under, and CNLPL/ CNTHP at under $53 if next divi is declared. I picked up 200 shares of CNTHP at $52.20 less than 2 months ago. You just have to be patient and ignore the idiot purchases of $54-$55 that you see recently that "locks up" the trading the for a while.
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Yeah. My cost on CNTHP is 52. and on CNLPL - 51.85. Looking at more WFC-l, but not at current price. The recent article in seeking Alpha on WFC was interesting. Should have bought more back in December.
What do you make of the partial call on Unum? When that happens is surrender of shares voluntary? I do have some extra cash lying around in my IRA, but I've been plowing that money into a bond ladder to meet anticipated withdrawals. I'm out to 2023 right now. That's probably enough advanced planning.
Regarding partial calls:
I owned the D-preferred of Weingarten Realty, a Houston-based REIT in which I also own common shares.
I bought the preferreds at about a third of their par value in 2009. They did a partial call in (about) 2012, and just took about 15% of everybody's shares. They called the rest a year or so later.
Considering the price increase, I wasn't too sorry to see that one go. (I held it in my IRA, so no capital gains tax.)
Anybody who bought preferreds in 2009, probably had the opportunity to pat themselves on the back, for a very long time. I sure wish I had. But you had to have the courage. Great call, Slow!
Did anyone hear Warren Buffet yesterday crowing about his Dow Chemical 8.5% preferred stock and how pleased he is with it? Its a great investment he said.... Well I think I am going to follow him and get some myself...oh wait, never mind, its a private transaction between his company and Dow who was short on cash back in 2009.
While it is true that the agricultural business is under pressure from commodity collapse and as such is vulnerable to a deflationary scenario, the interest rates on these compensate for this risk well to me when one considers the more likely scenario of long term very low inflation pressures resulting in long term low interest rates such as in Japan. In such a scenario as that, these will be excellent investments and far better than plays in the energy arena in my opinion.Golden Sunsets,
I have owned CHSCO and CHSCL since their IPO. This is a strong co-operative that will survive the tough times we're currently going through.
CHSCO is volatile now because the co-operative recently converted some of its other debt obligations into CHSCO - so the new owners are selling it. I believe this is why CHSCO has been weak lately, but it will pass.
CHSCL is a large issue and the first one that is held mostly by institutions and the public; weaker hands, who sell quickly and nervously at any hint of trouble. This is likely a permanent feature, so just got to live with it.
The agriculture business is under pressure from the commodities/oil collapse, so at this time outlook is not great for CHS. But I am optimistic for the future. And the income stream will continue - which is what you & I should be focusing on.
CHSCO would be the best of the issues at this time - once the selling is over, the owners are mostly member-farmers who are strong hands. the volatility should go down then.
Hope this helps.
While it is true that the agricultural business is under pressure from commodity collapse and as such is vulnerable to a deflationary scenario, the interest rates on these compensate for this risk well to me when one considers the more likely scenario of long term very low inflation pressures resulting in long term low interest rates such as in Japan. In such a scenario as that, these will be excellent investments and far better than plays in the energy arena in my opinion.
Just don't let any one industry dominate your portfolio too much, I do not like the financial arena as well but WFCPL is the one banking company that is strongest for paying so I do own that one as well as CHSCM and BGEPF.
Trying to get one of Mulligan's nice Utility Preferred for me is like trying to catch a couple of greased pigs released in Yellowstone, they may exist but I can't get my hands on it with any success.....