Portfolio update for January

The first month of the new year saw quite an active month for trading comparable to our usual sloth-like trading activity.

The trading was required in the ROTH IRA Preferred portfolio.

One of our mortgage REIT’s Annaly Capital (Ticker:NLY) was called away with an 8th of Feb call date on their E shares forcing us to take action. We took a brief look at their replacement incoming G shares with a call date March 31st 2023 but the coupon was a less desirable 6.5% compared to the outgoing 7.63%, not a hefty drop but we felt we should go shopping to see if we could improve on it.

We wanted to stick with Preferreds for new business since we just can’t bring ourselves to dive into rollercoaster volatility of common shares at the current overbought levels, so we finally settled on another mortgage REIT, Two Harbors (Ticker:TWO) C shares, Cumulative with a 7.25% coupon and a jan 27th 2025 call date, as an REIT it isn’t a qualified dividend but we think the yield compensates for it.

REITs continue to feel the pain from the constant threat of raised interest rates so no doubt there will be more opportunities around the corner, keep that dry powder at the ready..

Thanks for reading,

DN

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