Asian Markets Falling Hard as are U.S. Futures

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Tonight we have large losses in ALL Asian stock markets.  Indexes are down 5-10%–WOW.  SP500 futures are off about 2.5%.

Our key concern is that the massive market tumble may begin to ‘spill over’ to investment grade debt issues, which thus far have held up well.  While this is a concern it may also be an OPPORTUNITY.

Personally IF there is a panic in the fixed income market we will buy Kayne Anderson Term Preferreds or any of the investment grade ETD (exchange traded debt issues) with a short/medium duration (less than 10 years).

When we say a panic we mean a market that tosses out the best issues along with the junk issues.  For instance if a investment grade debt issue fell from the $25 area to $21 or $22 we would likely buy some additional shares.

Here you can find the TERM preferreds and ETD debt issues with short/medium durations.  We would also consider minor purchasing in some REITs (i.e. Realthy Income) in a panic situation.  We do NOT consider falls of say 5% in a stock a panic.
DO NOT commit all your ‘dry powder’ tomorrow–no one can predict how long and how far these markets could fall–good deals tomorrow may turn into great deals on Tuesday.
Our 2015 Short/Medium Duration Portfolio is performing great–up 6.01% even with last weeks massacre of markets. This model is here.

Additionally oil is off by over 4% tonight.  If we have said it once we have said it a hundred times–if you are in upstream MLP’s or related preferreds you shouldn’t be—even those with so called hedges are likely heading for bankruptcy—they will bust their loan covenants this fall when their asset values tumble again–no hedge will save them.

This correction will pass—but in the meantime you will see the fear mongers come out in force.  Tune them out and use common sense.

We make NO RECOMMENDATIONS on how an investor handles themselves in this market–as our readers know we never make recommendations to individual investors.

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