Friday, March 10, 2017

Observations and Sample of Recent Trades: 3/10/17 (GMTA, UL, FIE:CA, UL, PSAPRE )

I started to build a short term bond/CD ladder last December. At the start of this year, I was expecting the FED to raise the federal funds rate by .25% twice, once in March or June and the other in December. 

Initially, I concentrated my weighting in the 18 month period ending 6/30/18. My first maturity occurred last Thursday. 

Based on my expectations, I clustered maturities around the June and December Fed meetings anticipating that the proceeds could be used to buy higher yielding short to intermediate term bonds with slightly higher yields due to FED rate increases at those meetings.  

The FED is going to raise the FF rate next week. The question now is whether there will be one or two more rate increases this year. 

A lot of the proceeds from maturing bonds and CDs will be used to buy 1 or 2 intermediate term, high quality bonds. The yields on those bonds have been rising which is apparent when the investor looks at the FINRA charts. The prices have been moving down and the yields up. 

Today, the ten year was not able to stay over the 2.6% level, which is where the yield rise stalled last December. 

For corporate bonds, both Interactive Brokers and Fidelity charge me $1 per bond commission, while Vanguard is at $2 per bond. Those commission rates make small lot purchases cost effective, provided I do not pay much over the best ask price for such small lots. 

Schwab, Fidelity and Vanguard do not charge a brokerage commission for treasury purchases, although Schwab does have a commission for the treasury strips. 

I have snapshots of my intermediate term bond confirmations that show the price paid and the YTM. As interest rate rise, one option is to add to existing positions in 1 or 2 bond lots. Some bonds generally have active trading in one bond minimum lots, but most require a minimum of 2 bonds. 

Some bonds almost never trade in less 5 or 10 bond lots.  

Some bonds are far more actively traded than others even from the same issuer.  

I also have snapshots of order books for bonds that I may buy at some point. The idea is to see how the price changes over time which I can also see by looking at the FINRA charts. 

Examples: 3 Utility Bonds

Baltimore Gas & Electric:  


Consolidated Edison: 

The number in parenthesis id the minimum order for the bid or ask price shown. 

I can also place my own day limit order at Fidelity or IB, but not at Vanguard.  


1.  Intermediate Term Bond Ladder Basket Strategy:

All of the intermediate term bonds discussed below can be bought at lower prices now. 

These kind of purchases emphasize preservation of capital with a slight income tilt. 

I have no concerns about PG or Apple surviving to pay par value, and no current or reasonably anticipated credit concerns about the Ventas and Laboratory Corporation bonds discussed below. 

Interest rate risk is a potential issue assuming rates continue to rise. However, I personally have no concerns about that risk either for several reasons previously discussed in more detail:  

(1) I am using a ladder strategy and buying only small lots;  

(2) I am able to hold everything purchased until maturity;  

(3) I have no situational risks that require a higher return on investments;  

(4) I have a number of securities maturing every month; and 

(5) I intend to buy more high quality bonds and FDIC insured CDs with the proceeds from maturing securities which will capture high yields in a rising interest rate environment. 

A. Bought 2 Procter & Gamble 2.7% Senior Unsecured Bonds Maturing on 2/2/2026


Issuer:  Procter & Gamble Co. (PG)
FINRA Page: Bond Detail (prospectus is not linked)
Credit Ratings: 
Moody's at Aa3
S & P at AA-
YTM at Total Cost (98.519 ) = 2.889%
Moody's Assigns Aa3 Rating to P&G's USD bonds; outlook stable

This bond closed today at 96.5, creating a YTM at that price of 3.155%.

B. Bought 2 Apple 2.4% Senior Unsecured Maturing on 5/3/23:


Issuer: Apple Inc.  (AAPL)

FINRA Page: Bond Detail (prospectus linked)
Credit Ratings:
Moody's at Aa1
S & P at AA+
YTM at Total Cost (98.864) = 2.6%

This bond closed today at 97.09, creating a YTM at that price of 2.922%. 

C. Bought 2 Ventas 3.125% Senior Unsecured Maturing on 6/15/23:

Bought 1 Ventas  2023 Bond in a Taxable Account  


Issuer: Ventas Realty  Limited Partnership, a wholly owned operating partnership of Ventas Inc. (VTR)

Fully and Unconditionally Guaranteed by Ventas

VTR Page at Morningstar 
Finra Page: Bond Detail
Credit Ratings:
Moody's at Baa1
S & P at BBB+
Fitch at BBB+
YTM at Total Cost ( 99.324) = 3.242%

Bought 1 Ventas 2023 Bond in a Roth IRA ($2 per bond brokerage commission-Vanguard)


YTM at Total Cost (99.454 ) = 3.221%

D. Bought 1 Laboratory Corp. 3.2% Senior Unsecured Bond Maturing on 2/1/22-ROTH IRA:


Issuer: Laboratory Corp. of America Holdings (LH)

LH Page at Morningstar 
Finra Page: BondDetail
Credit Ratings:
Moody's at Baa2
S & P at BBB
YTM at Total Cost (100.308) = 3.131% ($2 brokerage commission)
Moody's changes LabCorp's outlook to stable; affirms Baa2 Sr. unsecured rating
2016 Annual Report (debt listed starting at page F-22)

I will consider buying this bond in a taxable account with the proceeds from maturing securities.   

This bond closed today at 100.35.

E. Added 1 Consolidated Edison 2% Senior Unsecured Maturing on 5/15/21


Issuer: Consolidated Edison Inc.  (ED)

ED Page at Morningstar
Finra Page: Bond Detail (prospectus linked)
Credit Ratings:
Moody's at A3
S & P at BBB+

YTM at Total Cost (98.105 ) = 2.478%

The other 1 bond lot was bought in a Roth IRA account and was discussed in this post: Stocks, Bonds & Politics: Observations and Sample Trades (VIVHY, ADX, HTGZ): January 24, 2017/Donald Trump and the Beginning of the End of the Progressive Era

2016 Annual ReportEarnings Report Q/E 12/31/16

In late February, Consolidated Edison sold $400M of a 2% coupon senior unsecured bond maturing on 3/15/20.

The 2021 bond closed at 98.68 today, creating at YTM of 2.334%. 

2. Long Term Bond Basket Strategy-Minimal Exposure: I will flip exchange traded bonds with potentially long maturities. 

A. Sold 40 GMTA in Roth IRA at $25.23

GATX Corp. 5.625% Senior Notes due 2066  (GMTA) 

Profit Snapshot: +$124.78


I discussed this purchase here. The issuer has the right to redeem on or after 5/30/2021. If not redeemed early at the issuer's option, the bond matures on 5/30/66. Prospectus

I basically exchanged GMTA for a similarly rated Laboratory Corporation senior bond, discussed above, that matures in about 5 years. 

I am down to owning 50 shares of GMTA bought at $22.23 (12/14/16). I intend to keep that lot and will consider buying more when and if the price sinks below that purchase price. 

I last discussed this security when I sold 20 shares using a commission free trade: 

Scroll to Item #3 A: Stocks, Bonds & Politics: Observations and Sample of Trades (UMPQ, GMTA, GJO, DLRPRI, MRK): 2/19/17/ Trump The Classless/Trump as the Victim of a Fake News Conspiracy

3. Short Term Bond/CD Ladder Basket Strategy:

A. Bought 2 First N.A. .65% CDs (monthly interest) Maturing on 9/15/17:


First N.A. is the operating bank subsidiary of First Bancorp (FNLC), a small bank holding company based in Maine. I have bought and sold the common shares several times.

4. Continued Paring Stock Allocation:

A. Sold 200 FIE:CA at C$7.54:


Profit Snapshot: +C$166


I sold 1500 earlier this year:

I discussed that transaction here.

Quote: iShares Canadian Financial Monthly Income ETF (FIE:TOR)

I have periodically discussed buying shares at my SA Instablog, including these posts:

Item # 1. Added 200 FIE:CA at C$6.69: Update For Portfolio Positioning And Management As Of 6/6/16 - South Gent | Seeking Alpha

Item # B1. Added 400 of the Ishares Canadian Financial Monthly Income ETF at C$6.46: Update For Portfolio Management And Positioning As Of 10/16/15 - South Gent | Seeking Alpha

Toronto-Dominion, one of the bank stocks owned by FIE, had a bad day today. I own over 100 shares. 

Closing Price: $49.03 -$2.74 

The culprit was apparently this article that appeared in a Canadian paper. TD Falls on Reports Tellers Were Pressured to Hit Sales Targets - Bloomberg

'We do it because our jobs are at stake': TD bank employees admit to breaking the law for fear of being fired - British Columbia - CBC News

This is reminiscent of the WFC fiasco. TD responded as follows: TD Comments on CBC Go Public Story

My last TD purchase discussion was probably in this post: Item # 4 Initiated Position in Toronto Dominion (TD) at $43.37 (2/11/15) The USD priced TD shares have been hurt by the weakness in the CAD/USD exchange rate since my purchases. 

B. Sold 30 of 100 UL  at $47.66 (recently bought lot):


I used a commission free trade to buy and sell this odd lot.

Profit Snapshot: +$264.7


I still own 70 shares that were bought in March 2009 at $18.05. 

Unilever's stock is expensive at its current price. UL Analyst Estimates I will consider buying back some shares at less than $40. 

I have been trading both UL and UN shares for several years now, including the following more recent round trips. 

2015 Dispositions: 

103 + Shares of UN: +$497.61

I discussed the purchase of this 100 share lot here:  Item # 2 Bought 100 Unilever at $38.10 (9/21/13 Post)

30 Shares of UL: +$104.78

The UL lot, which was sold in 2015, was bought in a Roth IRA account and discussed here: 

Dividend Growth Strategy: Added 30 UL At $39.25 Roth IRA - South Gent | Seeking Alpha

The UL ordinary shares are priced in British Pounds, whereas UN's ordinary shares are priced in Euros. The U.K. will not withhold a dividend tax, whereas the Netherlands has a 15% dividend tax for U.S. citizens that will reduce UN's dividend.  

4. Continued Paring Potentially Long Duration Fixed Coupon Equity Preferred Stocks

A. Sold 50 PSAPRE AT $22.37


I used commission free trades to buy and to sell this odd lot. 

I discussed buying this lot here



Quote: Public Storage 4.9% Cumulative Preferred Series E Stock (PSA.PE)

Prospectus (issuer has the option to redeem at par value on or after 10/14/21)

I will consider buying a PSA cumulative preferred stock when and if the yield exceeds 6%.

Some preferred stocks that have investment grade ratings from one or more rating agencies have recently declined to yield 6%+, and several others are close to that yield. 

Baa1/BBB+  RenaissanceRe Holdings Ltd. 6.08% Preferred Series C (RNR.PC:NYSE) 

Baa3  Capital One Financial Corp. Non-Cumulative Preferred Series F (COF.PF:NYSE) 

Baa2/BBB-  JPMorgan Chase & Co. Non-Cumulative Preferred Series AA (JPM.PG:NYSE) 

Baa2/BBB-  Kimco Realty Corp. 6% Cumulative  Preferred Series I Stock (KIM.PI:NYSE) (optional redemption period starts on 3/20/17)

Baa3 National Retail Properties 5.7% Cumulative Preferred Series E Stock (NNN.PE:NYSE) 

Baa3/BBB Wells Fargo & Co. Preferred Series V (WFC.PV:NYSE) 

I would expect all of those securities to continue their price declines if the ten year treasury continues to move up in yield. 

However, as I have pointed out in the past, the ten year treasury initially went down in yield when the FED started to increase the FF rate in June 2004. The starting point then was a 1% FF rate and the rate increases kept coming until the FF rate hit 5.25% in July 2006.  

Effective Federal Funds Rate-St. Louis Fed

Disclaimer: I am not a financial advisor but simply an individual investor who has been managing my own money since I was a teenager. In this post, I am acting solely as a financial journalist focusing on my own investments. The information contained in this post is not intended to be a complete description or summary of all available data relevant to making an investment decision. Instead, I am merely expressing some of the reasons underlying the purchase or sell of securities. Nothing in this post is intended to constitute investment or legal advice or a recommendation to buy or to sell. All investors need to perform their own due diligence before making any financial decision which requires at a minimum reading original source material available at the SEC and elsewhere. A failure to perform due diligence only increases what I call "error creep". Stocks, Bonds & Politics: ERROR CREEP and the INVESTING PROCESS Each investor needs to assess a potential investment taking into account their personal risk tolerances, goals and situational risks. I can only make that kind of assessment for myself and family members


  1. Hi SG,

    The TD story was big news and I added some shares on the dip. Everything seems expensive, but I'm sure rates and TD shares will end the year higher.

    I was bond shopping (buying) today and chose to buy XBB just to not hold cash. I will keep you posted on the final plan, but I have confirmed that holding pref shares in a cash account gives me a much lower tax rate. I now have to revisit my whole plan as the tax savings outside of my tax deferred account are significant.

    Thanks for the updates.

  2. "Formerly ‘phony’ jobs numbers are ‘very real’ under Trump, spokesman says"

    During the campaign, Donald belittled the decent job gains and unemployment rate numbers under Obama as phony, claiming that the real unemployment rate was "probably 28, 29, as high as 35. In fact, I even heard recently 42%."

    It is hardly news that Donald creates his own reality and takes credit where no credit is due.

    The February jobs report probably benefited from seasonal factors related to the unusually warm weather in February as pointed out by a number of commentators.,000-in-february

    Weaker numbers next month or later this year will be Obama's fault or maybe Donald will call them phony for some other reason that makes no sense. The easiest solution might be to publish his own numbers.

    It remains to be seen whether Donald and the GOP can deliver on meaningful stimulus policies.

    There will also be a focus on cutting back on several social programs that provide spendable income for lower income households and jobs.

    That will be done while giving the rich more tax cuts including the repeal of the taxes that help fund Obamacare. The problem with this approach for the economy is that it takes disposable income from those who spend all or most of it and increases disposable after tax income for those who do not.

    Other risks are still present including possible trade wars that will cause job losses:


  3. The Atlanta Fed's GDP model is currently forecasting a first quarter real GDP growth ( a seasonally adjusted annual rate) of only 1.2%. That estimate has been falling over the past few weeks.

    This model is forecasting much lower growth than the blue chip consensus.


    Steve Bannon claimed a Florida residency since Florida does not have a state income tax.

    The Washington Post has conducted an investigation of Bannon's asserted residency in Florida.

    Bannon "did not get a Florida driver’s license or register a car in the state. He never voted in Florida, and neighbors near two homes he leased in Miami said they never saw him. Bannon’s former wife occupied the premises, according to a landlord and neighbors. At the same time Bannon said he was living with his ex-wife, she was under investigation for involvement in a plot to smuggle drugs and a cellphone into a Miami jail . . ."

    The WP article says that Florida prosecutors are investigating.

  4. I hadn't realized warm weather was being considered a factor.... hadn't caught any commentary about it (such as on CNBC).

    Can't read as many articles lately -- Barron's wants me to pay. Wash Post, NYT, Wall street. If I buy subscriptions to all of them, it'd be too much spend on news.

    From the other article,
    "In the past 20 years, an average of 307,000 workers missed work due to bad
    weather in February; this February it was only 157,000. In other words, without
    good weather, civilian employment would have been up about 297,000, which is
    still a fast pace."

    They also show it's not a climb in part time workers. They also look forward to better policies, creating better reports in the future. (to paraphrase.)

    Looks like there's a thing called blue chip predictions from Aspen (link from GDPnow didn't open for me). On the FAQ they calculate that their error rate is similar to other professional estimates. I'm wondering if there are other estimates that are important to look at too.

    I started out trying to figure out how warm weather can result in more jobs. I didn't see anything to clarify that on the pages. People showing up for work, isn't "more jobs" it's just less snow days.

    1. LMH: In the report, 58K new jobs were reported in the construction industry, the most in a decade. That was weather related. Last month was the second-warmest February since 1895. The robust hiring in February would borrow from the normal spring increase in hiring.

      Mortgage rates are starting to move up and that may have a negative impact on new home starts.

      Oil and gas drilling added 7,700 jobs last month but crude prices are starting to fall again.

      There are issues in how the BLS calculates seasonal adjustments. Warmer then normal winter weather can cause the reported seasonally adjusted number to be too high or colder than normal can result in a number that is too low.

      The following statement is based on David Rosenberg's estimate: "only 184,000 folks couldn’t make it to work because of bad weather—half the February norm of 365,000. If a more normal number of workers were stuck home for bad weather during the survey week, the headline payrolls gain would be a tepid 55,000."

      I am just passing along those issues. I am not a statistician and certainly would not offer to teach a course on how BLS massages the numbers.

      I would anticipate a slowdown in job creation, even if the economy does not experience a recession, due to the nation being at or near full employment. The labor pool of desirable hires is running dry.

      I would agree that animal spirits are running high based on what I view as unrealistic expectations relating to Trump's policies. I have seen those spirits pop in the past when reality suffocates the hopium or what Shiller and Greenspan called Irrational Exuberance.

      Bill Gross had a sober view of the likely impact, which assumes that Trump's stimulus policies will be turned into law which is questionable IMO:

      That CNBC article is based on his March 2017 commentary that was published here:

      I discussed the same line of thinking here:

      I view it as important to at least be aware of the arguments and facts being presented to justify a more cautious stance now.

      It is also important to identify what can go wrong and how likely are those events. An example is the zero per cent chance currently assigned by stock investors to a U.S. initiated tariff trade war. Another is the negative economic impact flowing from cutting spending on social programs for low income households or increasing the cost of healthcare insurance for those households.

    2. "58K new jobs were reported in the construction industry, the most in a decade. That was weather related."

      Oooh. I saw some road construction crews and thought they were starting early this year. Didn't think in terms of jobs report. That means the jobs report is very mercurial, day to day counting of jobs without smoothing for contracts.

      I still don't understand the "stuck at home" quote that's similar to the one I found. Just because I stay hold sick from school doesn't mean I'm not in the course! That style of counting makes no sense to me.

      I've been expecting a jobs slow down since last year's high report. I dont' know why it hasn't happened. But finally there's a small amount of wage pressure. I assume .2 is small.

      "it as important to at least be aware of the arguments and facts being presented to justify a more cautious stance now."

      I was going to bring that up as a topic, because I think it's important to look at. It's easy to get too nervous, so it's helpful to qualitfy what the issues may be.

      Gross talks about a debt payment coming up? That's not hitting the debit ceiling yet...

      So Gross is talking about the debt being a risk. With this comment:

      "But our highly levered financial system is like a truckload of nitroglycerin on a bumpy road."

      I am not aware of the financial system being particularly levered?

      There's the gov't debit that I've known about. That debt is a problem but not any time soon. Reps can just raise the debt ceiling again.

      Gross has been warning for a long time. I THINK - wish I could remember. So is he a bit overly bearish and quite early? I do remember he was bearish at some point that turned out to be accurate (I noted it). So much for vague memory.


      I'm going to play with an idea here.

      Crashes have typically been 20-50%. Not more except the great depression sequence. So if things have climbed, and climb a little more... a crash will not bring us down very far. Maybe to the 2013 breakout level. Not to some "wonderfully" low point like we'd seen in 2008-9 for investing. So even if the bubble bursts, it's not likely to be down to terribly low levels.

    3. LMH: Gross is talking more about financial instability in the banking system which has occurred frequently in the past.

      As far governments, the U.S., China and other large economies are no longer able to stimulate growth without huge stimulus efforts. If those efforts create substantially more debt, which has been the case since the last recession, then the ability to deal with the next financial crisis is restrained, and a point is reached where the government has to reduce spending.

      The potential flash point IMO involves emerging market debt issued by governments and corporations that are denominated in U.S. Dollars.

      These problems take years to develop and the blowups are difficult to time. I could argue that the debt problems that led to the 2008 crisis started in 1985 as consumers started to increase their debt as a percentage of disposable income. For several years, that change in behavior, where increasing sums of borrowed money was spent, contributed to the market's rise and economic growth, but it also sowed the seeds of destruction.

      The important point is whether the arguments make sense and at least highlight potential areas of concern that need to be monitored closely.

      Debt accumulation worldwide since the last recession is off the charts high.

  5. With Yellen being dovish and cautious about raising too fast...

    Do you have thoughts about Trump getting rid of her for someone more quick to raise. Or pressuring her and having an effect on Fed raising faster than they would have on their own?

    1. LMH: Yellen can remain as a Federal Reserve governor until 2024. Trump can replace her only as the Fed Chairman which will happen on or around 1/18/18. I do not think that will have any impact.

      By historical standards and given current economic conditions, the FF rate needs to be much higher.

      The FED's main problem is that other central banks are still using monetary policy to devalue their currency. The ECB's benchmark rate is still at -.4%.

      A too fast rise in U.S. interest rates may cause the USD to gain far too much in value, thereby negatively impacting exports and U.S. economic growth.

      If the current spurt in economic activity and job creation is short lived, then the FED is back to one and done or no more than two .25% increases this year. A recession which I do not expect within the next 18 months would send the FF back down.

    2. Thanks. Didn't realize she stayed in the Fed just not head.

      The coming .25% is welcome and needed. So you think there's need for raising rates more than that quickly. Long rates aren't high enough yet? It'd create pressure. I would expect rates to keep climbing but doesn't seem like we're out of step yet.

    3. LMH: I would say that major Central Banks are all out of step by keeping extremely abnormal monetary policies in place for an extended period of time. There is nothing normal about a less than 1% FF rate eight years into an economic recovery or negative nominal and real interest rates under current and reasonably anticipated economic conditions.

      Maintaining those policies for way too long will cause the non-productive accumulation of debt, irresponsible spending, and excessive valuations in asset prices. Those factors together make the world's economy more unstable and susceptible to shocks.

  6. HI SG

    Absent a recession do you think a value correction is the reason the market can correct ?

    Earnings seem to be better than 1999-2000 even though much is based on share repurchase and borrowing to cover dividends in some cases.

    I know you are selling stocks in a very measured manner, but for a dividend investor who depends on dividends to augment SS and a pension, its very hard to sell.

    The companies I am holding onto mostly have gains, have high quality credit ratings and hopefully will not go out of business,

    I will hold during a correction and hope the dividends will continue even if stock prices correct.

    I still have cash as A back up to invest but probably nothing like the level you are raising for bonds.

    Its a difficult management issue for the average investor and bonds are still paying a pittance even though they are rising, not to mention the tax disadvantaged percentage of income versus dividends.

    1. Sam: There are several possible reasons why the stock market may correct. A reversion to historical multiples is one reason. You can literally have a 50% correction, as in 2000-2002, and the S & P multiple on future estimated "operating earnings" could still be outside a normal range.

      A decline close to that magnitude may easily trigger adverse consequences in the economy,

      A recession is one possible catalyst capable of causing a greater than 20% decline.

      Another would be clear and convincing evidence that investors have been too optimistic about future growth which is what led to high multiples.

      That recognition may be what precipitates the next major decline.

      Potential external events which are being ignored by the market can precipitate a reversion to normal multiples as well.

      Those events would include a trade war or higher than anticipated inflation that causes interest rates to rise much higher and at a faster pace than currently anticipated are just two examples.

      A market that is already at a historically high multiple, as now, is far more vulnerable to a catastrophic decline as shown by past history. The question is what will be the precipitating event or events and when will they happen.

      I am not calling for a 45% decline this year or next year or at any time in particular. If one did occur from current levels, we would be back to mid-2012 levels or thereabouts.

      All I am saying is that those types of declines can and will happen and are likely to happen with greater frequency in the future than in the past due to the world's financial system becoming potentially more unstable due to the massive accumulations of debt.

      It would take a depression for most blue chip companies outside of the financial sector to cut their dividends. Financials are notorious for dividend cuts during a recession that results in high charge-offs. The commodity sector is another sector vulnerable to dividend cuts even without a recession due to a price collapse in whatever commodity is being produced and other factors.

      GE was an example of a company that slashed the dividend during the last recession. COP is an example of a dividend slash by a major oil producer.

      Some companies will quit growing due to competition, failures to adapt or major long term adverse secular trends. Their dividend increases may slow down, then stop and go into reverse over time.

      The dividend investor who depends on dividend flow needs to have a plan to deal with those stocks before too much damage results from adverse changes.

      One sector that may be vulnerable to an ongoing secular trend is the box retailers.

      Bonds are not going to provide much cash at current yields, as you noted, and that is certainly a consideration for each investor to evaluate when making allocation decisions. The biggest risk for most households will be a failure to take risks that causes those households to fall way short of meeting their financial needs and goals.

      I can pick up for the first time in several years close to a 4% yield on BBB+, sometimes higher quality debt, by going out seven or so years. That is adequate for me, but may be inadequate for others.

      My main consideration is capital preservation. I do not need to risk a catastrophic decline given my financial circumstances. And, I certainly have no desire to go through one for the 4th time in my life with a lot of stocks.

      Most of what is being used to buy bonds is coming out of my cash allocation that was earning almost nothing at Schwab, IB and Fidelity. I have raised additional cash by selling stocks. The reallocation is mostly out of cash and into high quality bonds maturing in less than 10 years using a ladder strategy and short term CDs.

    2. hello South Gent,

      Thank you very much for your answer. I do try to monitor every company. As you have suggested in your answer.

      I note for example Coca-Cola which hopefully can reinvent itself along the noncarbonated beverage line. I see that it's free cash flow has been sinking as its dividend is rising and this is one of the problems of dividend investing as you point out above.

      I do have to thank you for your always clear answers and I know myself as a do-it-yourself investor, I have asked questions that upon reflection are very unsophisticated and simple. You have answered everyone of them in detail.

      I don't think I have ever thanked you in public. You are a great teacher and your knowledge base and ability to synthesize a conceptual answer as the one above, continues to amaze me.

      I realize no one has all the answers. I very much appreciate and understand your caution. Over the few years I have been investing,I have steered away from BDC's, LPs, story stocks ,etc, trying to keep my risks of capital loss to a minimum.

      I hope you continue to write and I very much miss your formal portfolio positionings .

      Anyway, this is just a public "thank you" for your willingness to teach and your patience.

  7. I have published a new post: