Quick post regarding my preferred stocks. They all took a hit when JP said we'll likely have two more bumps up in 2023. That portfolio is now down 1.25% since inception earlier this year. I'm not concerned because; A) I'm always early and B) This is a long term holding. As each of these 12 throw off dividends I'm adding a few shares while keeping my cost basis very similar in each holding - not the market value. Some, like AT&T and Southern Co. are up nicely and others like Schwab and Metlife are down. I don't want to chase the losers. In aggregate these preferreds are down 16% from par, roughly where I bought them. If it takes four years for them to return to par my return will average 10% a year. If it continues to perform weakly this summer I'll bump it up from 20% of holdings to 25%.
Regarding the economy:
JP's job is to kneecap the economy if he has to, to bring inflation under control. There was a good article in the WSJ a few days ago talking about how the treasury had to 'catch up' selling bonds this summer after the debt ceiling goofy-verse. That means there may be more treasury debt sellers, (yeah, that seller), than buyers which will drive up the cost of debt. They speculated 6% for 2-year bonds. As I've said before, the hobo government is desperate to get back to near zero short term bonds and it's JP's job to make sure that happens.
Any Democrat with a brain is only paying lip service to how truly sorry they are about student debt payments beginning again. People are still too flush with money after the pandemic giveaway and the huge Social Security bump in 2023. If they can't break the consumer they can't stop inflation. They've tried breaking the jobs market but that didn't work, now they're going directly after the consumer's pocketbook.
Just my opinion but it makes complete sense to me. You can't tell American consumers to do anything, you have to break them. Volker and Reagan did that. JP knows that lesson well. So does Biden. He's been around that block before.
The stock market is a device for transferring money from the impatient to the patient. - WB
AI
