THIS IS NOT INVESTMENT ADVICE. IT IS A PERSONAL REFLECTION ON INVESTING. RELY ON NOTHING STATED HEREIN
I am back from a week's vacation in England. I did not trade, but could track my investments anywhere by using the 3G function on my I-Pad.
Before departing, I opened positions in two "qualified" dividend CEF's. I reviewed the holdings, liked what I saw and made the purchases. ETG and EVT achieve mostly tax advantaged distributions (15% qualified dividend tax rate) in excess of 8% by leveraging, through borrowing, investments in "qualified" dividend paying stocks like McDonalds's and Deere which otherwise do not meet my 6% criteria for investment. This is a good return even if the dividend tax rate increases.
Upon my return, I liquidated positions in Ally Bank (GOM) f/k/a GMAC and Bank of America thereby locking in 7% and 4 1/2% capital gains respectively. I will miss the good dividends and further capital appreciation from each, but with the developing story about foreclosures, neither fits my risk profile any longer. I replaced them with add on positions in IQT and NPM, two closed end municipal bond funds. I have done well with each of these, both in distributions and capital appreciation. I suspect all municipal bond investments will appreciate substantially if the Bush tax cuts really do lapse. I like the investment straight up and as a hedge
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