THIS IS NOT INVESTMENT ADVICE. IT IS A PERSONAL REFLECTION ON INVESTING. RELY ON NOTHING STATED HEREIN
As interest rates begin to rise, it is a good time to look at one's bonds and bond/like investments. As loyal readers know, I am a huge fan of exchange traded debt with substantial positions in the debt of AIG (AVF, and AFF), MetLife (MLG) and the alphabet soup of GE offerings (GEA,GEC, GER,etc.). Not surprisingly, as spreads with Treasuries narrow, these have begun to falter. AIG's have fared best of all, but that is a function of its outsized yield and the continuing improvement of AIG's ratings. The same has not been true for Sallie Mae (JSM), MLG or even the vaunted GE. For a real shock, look at XCJ, the investment grade junior notes of Xcel Energy. They are trading near a 52 week low even though the common is near its high.
I love these offerings and find the current yields very attractive, but I don't want to lose principal. I am thinking about liquidating, taking some great profits and waiting to see where they fall, after which I will reenter. I hold these in the 401k so there will be no tax consequence and in today's world, transaction costs are so low as not to be a consideration. Any thoughts?
No comments:
Post a Comment