Profiting from the Pivot: Preferred Stocks

Preferred stocks offer consistent yields of 6-10%, some even higher. Why are their prices down, and how will they benefit from the eventual Fed Pivot (falling interest rates). This introduction to Preferred Stocks explains why you should be aware of this asset class. If you like dividend investing, I hope you enjoy this review of preferred stocks and funds including, PFF, PFFA, and RC.E.
📊 RESEARCH TO BOOST YOUR RETURNS:
➡️ Seeking Alpha ($50 Coupon +Free Trial): armchairincome...
Dividend Research Tips for Seeking Alpha: • Top 5 Dividend Investi...
✏️ LINKS FROM TODAY'S EPISODE:
The REIT Forum:
10% Discount!
After posting this video, The REIT Forum created an Exclusive Discount for Armchair Income viewers. Click here to receive your 10% Discount:
armchairincome...
Favorite Preferred Stock Article on Seeking Alpha:
armchairincome...
Systematic Income Investing:
armchairincome...
Guide to Preferred Stocks:
armchairincome...
=======================================
🤓 DETAILED INFORMATION:
✅ Seeking Alpha:
My #1 source of income investment information. I've been a subscriber for more than 6 years and my favorite feature is the collection of analysis articles for any given stock or fund.
www.sahg6dtr.c...
------------------------------------------------------
The information on this KZbin Channel and the resources available are for educational and informational purposes only and should not be construed as financial advice. Always do your own research before investing. Some links provided above may be associated with affiliate programs. If so, use of those links will not incur any additional cost to the user (and will, in many cases, provide a benefit to the user) and may result in a referral commission to this channel.
#armchairincome #seekingalpha #preferredstocks #ad
Edited with Gling AI: bit.ly/46bGeYv

[@stubby145]

Thank you! Great value.

[@armchairincomechannel]

Glad you enjoyed it!

[@Klausi666]

Buy BDCs in high rates times. Main, Golub, Ares, Blue Owl, Hercules. Time to get 10% yield to fight 4% inflation.

[@armchairincomechannel]

I’m a big fan of BDC’s too (and also of diversification). Thanks for sharing.

[@Klausi666]

@@armchairincomechannel those i mentioned had positive growth overall. main the highest with 182%

[@armchairincomechannel]

I have them all except GBDC. Haven’t seen it before. Why did the price not recover to pre Covid levels? Dividends look good 👍🏼

[@Klausi666]

@@armchairincomechannel covid is not over yet. its still here dude, hoever it is currntly 12.87% up overall. its not much, but it aint bad.

[@jimsteinberg9291]

Super impressive overview and intro to Preferred investing, with excellent references to follow up resources. Thx

[@armchairincomechannel]

Much appreciated! Preferreds are a huge rabbit hole.

[@chickendinner4098]

I only invest in Preferred ETF's, I have a large position in PFF and smaller positions in other Preferred ETF's, the key for me is not just the yield, in fact I try not to invest in the 10%'ers because I worry about reaching for yield! however my primary concern is to stay qualified as much as possible. Ordinary generally has greater tax implications! An ETF like PFF is around 60% qualified! Although alternatively you could just buy VZ and take a 100% qualified dividend at 8%! with maybe some upside!

[@armchairincomechannel]

Thanks for sharing. I think preferreds have upside when interests rates fall. I don’t know how VZ grows. Their debt and capital expenses to upgrade their network are enormous. But the yield is great!

[@sofakinginsane]

Thanks for the video. Will be checking out PFFA. I only own 2 small holdings of preferred shares: ENO and CHSCO. Looking forward to your future vids.

[@armchairincomechannel]

Thanks for sharing! 2 is a good start :)

[@johnbeeck2540]

Love the content on your channel! Keep up the great work!

[@armchairincomechannel]

Much appreciated!

[@thecryptostrategist2433]

This is a welcome video. I am looking for plays on the pivot and I love income. I have historically avoided preferred (aside from a few mReit preferred.) To be honest, I worry about liquidity in many issues. However, both preferred shares and REITS should rise in value as the Fed eases. Of course, the Fed has been more aggressive than almost everyone predicted.

[@armchairincomechannel]

Glad you enjoyed it! Thanks for the feedback. I agree that liquidity is an issue for some preferreds, especially now while they're out of favor. That should change over the next 6-12 months.

[@dominiquetheeasyminimalist]

I’m too lazy to manage individual preferred stocks on top of my other holdings, I’ll gladly pay the fees to PFFA! This was a fun thought process from NIE to ACV to PFFA to individual stocks 😁

[@armchairincomechannel]

Yes, they get complicated so unless you're excited about it then it can get tedious. I might come back to ACV :)

[@jameskeefe1761]

Thank you for the excellent review of preferred stocks, this unique asset class. There is another asset class called convertibles also which is where what you buy starts off as a bond but later on can be converted to a stock.

[@armchairincomechannel]

Thanks for sharing. I've been looking into convertibles too! So far I like ACV. Do you have any favorites?

[@alr9967]

12/13/23. Fed Pivot Day. Grab high yields while they’re still priced for higher for longer. Duration was best avoided and now it’s best embraced

[@armchairincomechannel]

Does smell like opportunity…😁

[@kejianniu2994]

Great info. I know one of the advantages of preferred are lower tax as their dividends are mostly qualified. Didn’t realize that this may not be the case for preferred CEFs. Are the distributions from Preferred Stock CEFs all non- qualified or a mix?

[@armchairincomechannel]

Glad you're enjoying the content. Funds typically offer mostly ordinary income, and therefore aren't as tax efficient as individual preferred stocks.

[@kejianniu2994]

@@armchairincomechannel Thanks!

[@asphaltandtacos]

I am looking at preferred stocks. Floating rates are a minor issue but that is not enough to make me avoid them.

[@armchairincomechannel]

There are some juicy yields to be had in preferred stocks and potentially some upside when the Fed pivots...which might be a while.

[@normansimonsen1203]

JEPI's distributions are a bit low. I'm thinking it might be a good time to sell it all. And double my position in PFFA.

[@armchairincomechannel]

Two very different investment categories. Thanks for sharing your thoughts.

[@finwest]

Since it’s been a few months since you started down the path of investing in individual preferred stocks, beyond the 2 you mentioned here, are there any others you like?

[@armchairincomechannel]

At the moment I have AGNCN, NLY.PRF, and VIASP. VIASP is riskier as its subject to risk if there's a severe weather storm, and there's little information about it available. I'm also holding the PFFA fund.

[@finwest]

@@armchairincomechannel Thanks for your reply sir! I'll look into these as I want to expand this asset class of my portfolio (well, actually, START some positions in this asset class!).

[@neddiego2570]

​@@armchairincomechannel What about BAC-L & WFC-L ? Both are non-calable qualified dividend payers with 6% yield.

[@Michael-nq4ek]

Good video

[@armchairincomechannel]

Glad you enjoyed, thanks for watching and commenting :)

[@blackfiree91]

But why not PFFD?

[@armchairincomechannel]

I didn't do a deep dive into PFFD; can't study them all. However, the Total Returns for PFF and PFFA were higher over 1, 5, and 10 year periods so that helped me narrow it down. PFFD may have some other advantages in terms of diversification that I'm not aware of. I've got nothing against it :)

[@williamstoker8027]

Where is a good free site to find preferred stocks? I have sold some of mine.

[@armchairincomechannel]

I use The REIT Forum and Systematic Income Investing. Both are paid but offer a limited amount of free content. I'm not aware of any services that offer unlimited 100% free info on preferred stocks. If so, they would have to rely on advertising revenue to compensate them and its a small niche asset class that won't attract a lot of clicks so that probably wouldn't make sense.

[@Baron1975]

I own Pff in scale!

[@armchairincomechannel]

Thanks for sharing. That makes 2 funds we have in common :)

[@Baron1975]

@armchairincomechannel yes I'm also going to buy UTG after watching your video, perhaps 1-3% weighting in my portfolio... thanks again for all the time and work you put into these videos.

[@armchairincomechannel]

Thanks for your feedback, great to have you onboard. Feel free to be active in the community :)

[@edmitiu7383]

any thoughts on pipelines ?

[@armchairincomechannel]

Can you be more specific?

[@edmitiu7383]

@@armchairincomechannel ET, AMLP have been my trades. CAPL may have promise. Thanks for HTGC...''Rather be lucky then good'''

[@armchairincomechannel]

Oh....MLPs! I thought you were talking about something related to preferred stocks. Now I get it. Yes, I'm open to them. Looking at HESM. I don't like K-1s so that's a limiting factor.

[@alr9967]

Nice yield. Don’t put them in IRAs without checking on UBTI. ask your tax advisor

[@armchairincomechannel]

My Favorite Research Tool...Seeking Alpha: ($50 Coupon + Free Trial): armchairincome.link/SAlpha Quickstart Tips for Seeking Alpha: kzbin.info/www/bejne/haOrg5KKot2MkKs

[@dudewheresmyguitar21]

PFFA and ACV both say they have a 2%+ expense ratio. Thats the highest expense ratios ive ever seen. ACV 2.69% ratio?? Youre giving up a huge chunk of income from that

[@armchairincomechannel]

I don't own ACV and I haven't done a video on it so I'm not very knowledgeable about that one. As for PFFA, per the fund manager, the management fee is 0.80%, which is a bit high for an active ETF fund. The expense ratio is higher at 1.4% because that number includes interest expense. Leveraged funds produce higher yields (in good times) and the interest expense is just part of the business, it's not as if the fund keeps the money. You could debate whether the 0.80 should be lower though. Here's the website: www.virtus.com/products/virtus-infracap-us-preferred-stock-etf#shareclass.742/period.quarterly

[@dudewheresmyguitar21]

@@armchairincomechannelthanks man. I just found your channel and i absolutely love what youre doing im in the same mindset right now. Ive got a little over 1.1M, im 31, and i just want to be in high dividend fixed income with little regard to growth because i think stock market valuations are just absolutely ridiculous across the board. If the market was to crash id be interested in growth again but as for now i want to try to get into the best names i can with 5-12% yields. Right now your UTG suggestion looks extremely attractive to me especially after the pullback its had the last month or so. Do you have a video that shows all the tickers youre currently in and highlighting your favorites?? Very happy again to find your channel!!!

[@armchairincomechannel]

Thanks for your feedback. I don't post my personal portfolio because some people would just copy it and I'm trying to focus on sharing the finding of my research rather than just copying my portfolio. As for UTG, I like it too but it uses leverage so the high interest rates are hurting it at the moment from a pricing perspective. I'll probably buy more when interest rates head down.