Problem is rates will likely continue to increase over 22’ and into 23’ and ORC will have to cover that by decreasing dividend again likely. Sure they built baked it on now for the moment down to .055, but that likely will be reduced again. Which means PPS, will decrease dramatically once again. It’s a slow spiral down. They can’t stop it either, because they have no power over interest rate decisions.
For dividends paid monthly it’s great. However, the PPS investment, you want stability and not prone to decline, on the other flip side of this, the PPS, will likely be impacted when they IMO possibly are forced to reduce further down the road 3/4 quarters the dividend yet again.
But then again, PPS, may continue to drop regardless without any more reductions of dividends with zero connection to rates. Highly leveraged. IMO- vulnerable. I’m betting on a continued further drop in PPS.
The dividends imo is the light bulb the moths are attracted to, however, the fly swatter nobody talks about is the continued drop in PPS. Wont surprise me if PPS drops to low 3’s and crosses below that...so yeah divs look good in account - but your getting principal cash invested reductions in original value. You hold, you eventually lose on the PPS declines. Once your in, your in. Who wants to take a loss on further PPS declines?
That part sucks, big time. Divs sure- great. But look at declining PPS, and rising rates are not going to be over for ORC imo and further rate increases will occur and div slashed yet again - then looking at even further massive PPS declines.
If your day trading it month to month, ok. Long term - imo- nope.
