The market had been grinding and coiling for a number of months seeking the catalyst to nudge the market towards the path of least resistance. We’ve had a number of scares that agitated and excited the bear camp from the Fed induced “taper tantrum”, to China’s growth falling off the table (never materialized) to the most recent Brexit drama.
The markets reacted sometimes violently only to slowly grind back to loftier levels. The domestic fundamentals and economic indicators I follow were in a similar “bend don’t break” mode. There was some soft periods only to see, in some instances robust snap backs that never warranted the aggressive selloffs witnessed in the major indices. We’ve used those bouts of weakness to add to positions and initiate new ones off our watch list. I thought I’d share some from our portfolio holdings. This will be part one focusing on our income producing holdings. Traditionally when we were building out this sector of our portfolio we’d look to good old US Treasuries.
However, in the current ultra-low Fed orchestrated interest rate environment investing our fixed income dollars here when 10 year treasuries yield less than 1 1/2% is, in our opinion not enough compensation and far too much risk. We thus look to treasuries alternatives. Which leads us to the following high yielding bonds, R.E.I.T’s and preferreds:
RR Donnelly 8 82% 4/15/2031- Bond
Fairfax Financial 8.30% 4/15/2026- Bond
Freeport McMoran 6 3/4% 2/2022- Bond
Citigroup 6.30% callable 2/1/2021- Preferred
AmTrust 7 5/8% callable 9/16/2019- Preferred
Apollo Commercial 8 5/8% callable 8/1/2017- Preferred
Barclays Bank 8 1/8% callable 6/1/2013- Preferred
Energy Transfer Equity
Callon Petroleum 10% callable 5/30/2018- Preferred
Iberia Bank 6 5/8% callable 8/1/2025- Preferred
Kinder Morgan 9 3/4% 10/26/2018Â
Medical Properties- Real Estate Investment Trust
National General 7 1/2% Callable 7/15/2019- Preferred
