Mulligan, Not sure what you mean about price erosion, perpetual issues and the long end moving north. We don't invest in "perpetual preferred" stock, at least to our knowledge, other than the fact that any preferred can live forever if the issuer chooses to let it remain outstanding.
Does "the long end move north" mean if interest rates move up to say 8% causing everyone to abandon 5 or 6% issues causing them to drop in price to yield the new 8? My personal view, buttressed by the monthly FRB Economic Letter from the 12th district in San Francisco, is that we are in for a long period of relatively low rates that should make the 5s & 6s attractive as long as we need them to be.
Overall our risk parameters are: Moody/S&P investment grade, NYSE traded, 15% tax eligible, 5-6% yields, with extended call protection particularly if they are purchased at a premium - which just about every one seems to be. In short we are looking for a "guaranteed" income stream from this area.
Does "the long end move north" mean if interest rates move up to say 8% causing everyone to abandon 5 or 6% issues causing them to drop in price to yield the new 8? My personal view, buttressed by the monthly FRB Economic Letter from the 12th district in San Francisco, is that we are in for a long period of relatively low rates that should make the 5s & 6s attractive as long as we need them to be.
Overall our risk parameters are: Moody/S&P investment grade, NYSE traded, 15% tax eligible, 5-6% yields, with extended call protection particularly if they are purchased at a premium - which just about every one seems to be. In short we are looking for a "guaranteed" income stream from this area.