Income Investing Results - November

[Flieger]

Just getting things started for November! Summary of thread purpose below as stated in initial thread.

I thought it might be interesting to have a thread that those folks that have chosen Income Investing to fund retirement might share experiences, plans, investment decisions, and results so far if you so choose to divulge. This isn't intended to debate the investment choice/style as that has been done in other threads. This is for people that, at least for the time being, have made this strategy as their primary choice of income. I, for example, have a portion of total portfolio invested this way, while also continuing to have a smaller portion in Growth as "more" hedge to inflation.

Current Total Portfolio Allocation: Income 66%/Growth 24%/Short Term 10%. Income Holdings below.

Flieger

 

[aja8888]

Isn't EICC a term preferred stock (not perpetual) and not a CEF?

 

[Flieger]

Nice start to November yesterday.

Flieger

 

[Flieger]

Isn't EICC a term preferred stock (not perpetual) and not a CEF?

It is a Preferred issue of EIC, but within a CEF.

(Couldn't insert the link for some reason)

Flieger

 

[COcheesehead]

I think I may have mentioned in the October thread, I am rethinking the need for so much income. I was close to earning four times our normal expenses which felt like I was making hay while the sun shines.
I am making some changes in that regard.
Rates have dropped a lot and it gives me reason to pause and ponder the next phases of the markets.

 

[aja8888]

It is a Preferred issue of EIC, but within a CEF.

View attachment 59623

(Couldn't insert the link for some reason)

Flieger

Ah, oK.

 

[Flieger]

I think I may have mentioned in the October thread, I am rethinking the need for so much income. I was close to earning four times our normal expenses which felt like I was making hay while the sun shines.
I am making some changes in that regard.
Rates have dropped a lot and it gives me reason to pause and ponder the next phases of the markets.

When you say rates have dropped a lot, what rates are you referring to?

I'm also considering "shifting" my allocations some (not sure how much of a shift yet) toward Growth. I'm trying to move slowly to avoid snap decision(s).

Thanks,

Flieger

 

[COcheesehead]

When you say rates have dropped a lot, what rates are you referring to?

A lot of things are based off of this. Growth isn’t necessarily where I am thinking.

 

[Flieger]

A lot of things are based off of this. Growth isn’t necessarily where I am thinking.

View attachment 59624

Got it. Just wanted to make sure you weren't seeing some fund Yields dropping that I was missing.

Flieger

 

[Flyfish1]

I am rethinking the need for so much income

Well, I had a solution for your problem - you could have bought my boat. But, alas someone else bought it. Sorry...lol

 

[COcheesehead]

Got it. Just wanted to make sure you weren't seeing some fund Yields dropping that I was missing.

Flieger

Rates and yields are different, but they run in the same pack.

 

[Flieger]

Rates and yields are different, but they run in the same pack.

I haven't seen any real $ changes so far.

Flieger

 

[Flieger]

Went ahead and took a hit on some of the VZ I bought. Holding for some Div plays perhaps. Or maybe some Growth increase elsewhere, not sure yet.

I seem to be very indecisive these days.

Flieger

 

[Flyfish1]

Interesting, one of my advisory services recently recommended VZ as a buy.

 

[Flieger]

Interesting, one of my advisory services recently recommended VZ as a buy.

Yep. I bought on the news of the CEO change (and subsequent drop). Picked up Div's, but sold about 1/4 off today (loss of $140). I'll hold the rest to see what happens.

Flieger

 

[COcheesehead]

If you look at the short positions in some of AQR’s long short funds, the majority are in the communications space.

 

[dobig]

If you look at the short positions in some of AQR’s long short funds, the majority are in the communications space.

I've upped my allocation to 13%. The more I look at them, their long/short positions and their returns vs the S&P since they reformulated their strategy 5 years ago (never knew that) the more comfortable I feel moving more assets into them.

Something else that made me take note was your post on QLENX moving from a stronger long position to a more neutral one since spring.

 

[ERD50]

Just getting things started for November! Summary of thread purpose below as stated in initial thread. ...

Based on recent conversations here, I'm curious as to why you include that "YOC" (Yield On Cost) column? There just doesn't seem to be anything about that number that is useful. This is not a "debate the investment choice/style" - I'm just curious about the metric you are using.

 

[surprising]

Based on recent conversations here, I'm curious as to why you include that "YOC" (Yield On Cost) column? There just doesn't seem to be anything about that number that is useful. This is not a "debate the investment choice/style" - I'm just curious about the metric you are using.

To me that's probably the most useful. That's the yield you are receiving on the money you put in. Any price changes up or down after the fact is meaningless for your current income. Also comparing YOC to current yield allows you to see if there is opportunity to sell something that has gained a lot (so current yield is below YOC), and put it into something with higher current yield.

 

[COcheesehead]

To me that's probably the most useful. That's the yield you are receiving on the money you put in. Any price changes up or down after the fact is meaningless for your current income. Also comparing YOC to current yield allows you to see if there is opportunity to sell something that has gained a lot (so current yield is below YOC), and put it into something with higher current yield.

Yes it’s similar to a bond metric Fidelity reports as yield to maturity or yield to worst. It’s a reflection of appreciation or depreciation of the underlying asset in relation to its payout.

 

[Quattro73]

Yep. I bought on the news of the CEO change (and subsequent drop). Picked up Div's, but sold about 1/4 off today (loss of $140). I'll hold the rest to see what happens.

Flieger

Why not write CC on it?

 

[ERD50]

Based on recent conversations here, I'm curious as to why you include that "YOC" (Yield On Cost) column? There just doesn't seem to be anything about that number that is useful. This is not a "debate the investment choice/style" - I'm just curious about the metric you are using.

To me that's probably the most useful. That's the yield you are receiving on the money you put in. Any price changes up or down after the fact is meaningless for your current income. Also comparing YOC to current yield allows you to see if there is opportunity to sell something that has gained a lot (so current yield is below YOC), and put it into something with higher current yield.

I guess I need an example, I don't see it at all. In a recent post:

Personal Dividend Yield

@Taco gave examples of YOC being misleading if anything. The number varies based on when you bought it, not its current or relative performance.

The way to "see if there is opportunity to sell something that has gained a lot", it to just look at what you can sell it for! And capital gains normally mean more taxes - I'm generally looking for the lowest gain to sell. Or if I feel something has over-performed, and might be losing momentum, well that has nothing to do with when I bought it (like YOC uses), it has to do with its performance vs the market.

The comment from @COcheesehead on 'yield to maturity' - that's a very different thing. That is used to compare current values - interest rates may have changed, and the bond price will change to reflect that. YTM gives you a measure to compare to other bonds that are at different points in their maturity and could have different coupon rates. It is useful - I don't see how YOC is useful at all.

Examples?

 

[surprising]

I have many times looked at my spreadsheet and noticed big difference between YOC and current yield and actively sold and bought another fund with better current yield, gaining some extra monthly income.

 

[COcheesehead]

I guess I need an example, I don't see it at all. In a recent post:

Personal Dividend Yield



The comment from @COcheesehead on 'yield to maturity' - that's a very different thing. That is used to compare current values - interest rates may have changed, and the bond price will change to reflect that. YTM gives you a measure to compare to other bonds that are at different points in their maturity and could have different coupon rates. It is useful - I don't see how YOC is useful at all.

Yes, YTM can be used for comparison YTW is better, but the calculation of the value is the same as YOC which is why I brought it up. It’s how yield has changed with a static payment over a dynamic asset value and will expose appreciation or depreciation of the underlying asset.

 

[Flieger]

I believe (from prior threads) ERD50 is a "TR only" guy and views everything in black and white from that perspective. YOC is just one of MANY things to look at....

Flieger