I’m introducing a new regular Friday feature at the raptor.
music selection: “Tumbling Dice” — The Rolling Stones
I’ve been getting more questions about the non-options portion of my portfolio. I rarely report on that as the positions are mostly fixed income positions that are held with a wide stop loss and are intended as permanent positions rather than for trading. A “nothing changed again” blog post has always seemed sort of dull to me so I have refrained.
But I think it is important for an early retiree to have a reliable stream of income that is not dependent on trading. The best traders are the ones who have the discretion to sit back and not trade anything at all if nothing attractive is on offer. You don’t want to pick up nickles in front of a steamroller. So I have built a base of my portfolio, about 40% by cost basis into fixed income type investments. This allows me live modestly without trading when and if necessary.
I like to invest in fixed income via Closed End Funds that are trading below their Net Asset Value (NAV). You get diversification, an opportunity to buy assets below their liquidation value, and low cost leverage without the possibility of a margin call. So I am going to start offering three selections in the closed end fund space each Friday that are yield rich and attractively priced.
Aberdeen Inc. Credit Strategies (ACP) is a closed end fund that invests in senior loans. It pays monthly and the distribution type is “income only”.
- Discount to NAV – 6.32%
- Yield – 10.01%
Brookfield Real Assets Income (RA) is a closed end fund that invests in mortgages and mortgage securities. It pays monthly and the distribution type is “managed distribution”.
- Discount to NAV – 6.83%
- Yield – 10.12%
EV Tax Advantaged Bond & Option (EXD) is a closed end fund that invests in high quality bonds with a rules based options overlay strategy. It pays quarterly and the distribution type is “managed distribution”.
- Discount to NAV – 6.00%
- Yield – 10.91%
What do you think of the new feature, raptors?
Devour your prey raptors!