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03-04-2008, 08:44 AM
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#2
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Mar 2003
Posts: 18,085
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I think bank loans are an extremely attractive opportunity right now. But like everything, be prepared for ups and downs and don't overdo it.
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"All animals are equal, but some animals are more equal than others."
- George Orwell
Ezekiel 23:20
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03-04-2008, 08:54 AM
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#3
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Full time employment: Posting here.
Join Date: Jan 2008
Posts: 798
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I'm sort of surprised nobody else comments on these.
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03-04-2008, 08:56 AM
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#4
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Moderator Emeritus
Join Date: Jan 2007
Location: New Orleans
Posts: 47,193
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 Quote:
Originally Posted by RockOn
I'm sort of surprised nobody else comments on these.
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Personally, with the present credit/mortgage crisis in full swing, and considering my low risk tolerance and lack of investing experience and knowledge about this type of investment, I wouldn't touch them with a ten foot pole.
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Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities. - - H. Melville, 1851.
Happily retired since 2009, at age 61. Best years of my life by far!
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03-04-2008, 09:04 AM
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#5
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Full time employment: Posting here.
Join Date: Jan 2008
Posts: 798
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For those that do not know, the attraction here is a 10% yield which should be good for about 6 years, they hold loans typically out to 2014 (yield is as high as junk bonds), on the 35% leveraged Closed End Funds. Some funds hold loans from over 600 companies so they are diversified. In the case of default the loans get paid first, making this investment less risky than junk bonds.
If the credit problems get solved without a meltdown, there could be some cap gains in addition to the yields. If the meltdown occurs, they might lose some money but so will everything else.
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03-04-2008, 09:06 AM
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#6
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Mar 2005
Location: Chicago
Posts: 12,930
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How would one participate?
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
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03-04-2008, 09:09 AM
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#7
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Full time employment: Posting here.
Join Date: Jan 2008
Posts: 798
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Go to ETF Connect and screen for the Loan Participation funds, there are some open end funds also, yielding 7% or so.
ETF Connect is great if you are at all interested in Closed End funds, the only drawback is they do not update the info very timely.
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03-04-2008, 10:22 AM
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#8
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Mar 2005
Location: Chicago
Posts: 12,930
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Interesting, thanks.
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
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