Written by David Fabian, March 13th, 2017
Preferred stocks offer the distinction of being unique hybrid instruments with qualities of both stocks and bonds. In that manner, they offer healthy dividend yields alongside a favored position in the capital structure of many companies that issue these securities.
The reason company’s issue preferred shares are to raise capital from investors that are seeking an attractive yield without adding traditional debt (bonds) that carry strict maturity dates and covenants. Preferred stocks can also be “callable” from the issuer, who has the right to redeem them at a certain price or time at their discretion. Read more
Written by David Fabian, November 13th, 2016
It feels like we have almost packed a full year’s worth of stock market price action into just the last two weeks. With so many diverging market sectors and overall fluctuations, I thought it would be prudent to do an examination of some key charts.
Taking a closer look at these categories can help frame macro views as well as determine areas of strength and weakness. Read more
Written by David Fabian, October 18th, 2016
The first six months of 2016 were characterized by a sharp drop in U.S. interest rates as investors flocked to the safety of Treasury, municipal, and investment grade corporate bonds. This created significant inflows to diversified exchange-traded funds that track these asset classes in an attempt to ride the building wave of momentum. However, as the ship became overloaded to one side, it was only a matter of time before it began to swing back towards a relative state of equilibrium.
One major indicator of this trend, the 10-Year Treasury Note Yield ($TNX), fell to an all-time low of 1.34% near the mid-point of the year. This index has now reversed course and risen to a four-month high near 1.75%.
Written by David Fabian, September 01st, 2016
If there is one major theme that pervades the financial markets this year, it’s the shift from stocks to bonds. You can romanticize about the momentum in gold stocks. You can peek over at emerging market strength, but nothing compares to the pervasive re-allocation of global assets. Read more
Written by Michael Fabian, November 13th, 2015
For many closed-end funds, the realization that borrowing costs could potentially rise in the near future hasn’t been met with a smooth transition. In fact, the majority of funds on my watch list have suffered a great deal as individual investors fret over the unknown, and choose to “de-risk” instead of hanging in there to see what ultimately happens. Read more