Always Happy for a Quiet Day
By: Tim McPartland,
While stock and bond markets can certainly get wild and crazy today was a relatively quiet day–and we find these days pretty relaxing. We watch the markets all day long, which we don’t recommend, and have for years, but we still get somewhat tense watching major down days like yesterday. Honestly there is no reason to watch all day as we don’t act on anything that happens.
Today MLPs and REITs were simply flat—utilities generally were down–but by only a fraction of a percent. We continue to want to buy a utility or two–but we can’t bring ourselves to accept 3 or 4% so we will wait. Also we continue to want to buy REIT Realty Income (ticker:O), but again it has a current yield of 4.65% and we want at least 5%–we wait.
Crude oil prices kind of drifted today. After last nights release of the API figures showing a small drawdown in crude stocks we thought the EIA release today might confirm the drawdown, but it didn’t instead showing a 4.4 million barrel build. This is a good improvement over the last 2 weekly inventory builds which were over 8 million barrels. We may be reaching a balance in supply and demand, but we have no reason to get excited. Upstream MLPs will need a lot more than simply a balance in supplies to successfully survive.
At this time all models continue to perform as expected. We continue to really love our Short/Medium Duration Income Model. With March dividends and interest added in to the account it stands at a gain of 3.75% since 10/31/2014. This is our conservative model set up with issues that mature over the next number of years (both Term Preferreds and Exchange Traded Debt). It continues to move generally less than a $100 or so daily (up or down). The model has a current yield of 6.65%.