THIS IS NOT INVESTMENT ADVICE. IT IS A PERSONAL REFLECTION ON INVESTING. RELY ON NOTHING STATED HEREIN.
With the successful offering of the shares of its subsidiary AIA on the Hong Kong stock market, AIG will repay the $20 billion it owes the Fed. Moreover, with the Treasury's decision to convert its $49billion AIG investment into common stock (92% stake), the likelihood that AIG will not only survive but will keep current on its subordinated debt is high. As readers know, I have liked AVF since I bought it for $19.52 and paying 10% in interest in May. I have periodically added to it and yesterday it closed at $24.16 paying 7.97%. I may buy more up to $25, the call price come December, 2012. For more principal appreciation, one can look at AFF which is callable in June, 2012 at $25. It currently trades at $21.75 and pays 7.41%.
Yesterday, Merrill Lynch opined that RBS common could double by 2012. I own the trust preferreds NWpC, RBSpF, RBSpH and RBSpL paying between 7.5 and 8% and selling way below the $25 call price. The more speculative of you may wish to investigate other, currently not paying RBS trust preferreds that have seen a flurry of activity recently, much to the delight of one of our readers.
This week, Citigroup's CEO gave encouragement that the dividend would be reinstated in 2012. This was reflected in a flurry of 2012 option moves. I own some Citi trust preferreds, and may buy some more.
If you do not like individual trust preferreds, take a look at RNP, a closed end fund comprised of high yielding REITS and preferreds, two of my favorite investments. It distributes on an annualized rate of 8.68% and trades below its NAV
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