10-19-2020, 10:55 AM
(10-19-2020, 09:45 AM)fenders53 Wrote:(10-19-2020, 08:23 AM)ken-do-nim Wrote:If you don't listen to anything else, look for a couple decades of performance, and research the management. I didn't cherry pick your list to find a problem. I just grabbed OXLC because it was listed first and it looks like the worst investment idea ever. You are likely only attracted to the too good to be true yield. Just understand whether the yield is a real dividend from FCF, or merely financial hocus pocus. I highly suspect the latter in this case. Virtually all the high yielders get beat up in a market downturn. That is just how it is. That is when you buy, no matter how much patience it requires. I consider my high yielders solid, and I still have to wait a long time between adds. A "safish"'' 7% yield is infinitely safer than a 15% yield today.(10-18-2020, 09:27 PM)fenders53 Wrote: I understand you aren't really buying these today but the high yields made me curious. I took a look at the first security which is OXLC which is closed end fund listed at an 18% yield. I was curious how it did during severe markets but it didn't exist until 2011. It's dropped from about $19 to around $4.40 after being under $2 earlier this year. That's about a 75% loss of capital during a nine year bull market. The yield is now down to 18% because they cut the dividend in half a few monthes back. I wonder if they might be distributing the capital back to the shareholders? That's a very interesting pick. Am I missing something?
Admittedly I'm very leery of OXLC as well. Now, I did own ORC and NLY for many years. ORC went down down down, but I did buy more at the bottom in March and it tripled since then, which was nice, and I sold. But it has stabilized since.
NLY I had about $25K in for many years, and getting those quarterly $700 dividends was wonderful. It traded in a tight $10-$12/share band, until it dropped like a rock this year, thankfully after I got out, and like ORC has since stabilized.
The ones I only recently discovered but am very excited about are the two PIMCO funds paying around 10%. It will be interesting to see how they do.
Very solid advice. My thinking was to put a small amount of money in some of these too-good-to-be-true funds.