Basic to my trading strategies is the division of capital into essentially two major parts-capital gains and income orientations. In the C.G. component all holdings endevour to have an income (dividend, optionablility) attachment. In the income component all holdings endevour to include a capital gains element. While these situations are sought, as we all know, they are not necessarily obtainable for numerous and sometimes conflicting reasons.
In this time of benumbed and muddled garu's, financial advisors thumb sucking, dumbfounded talking heads, wildly volitile markets and panic attacked players, there appears to be a dull and overlooked sector slow turned bullish from some deeply oversold levels which should provided security, tax favoured income, capital gains plus a gaurenteed call price within the next four to seven years in some issues'.
Over a period of time the majority of blue chip, infact the entire preferred share sector of the tsx has taken a nasty hit. As usual there is no paucity of uninformed thought as to why this has happened. We, as chart glazers, if we were watching, saw the saranio unfold and exited: now it is starting to reverse. We should be interested! Some issues have suffered 20% and 30% losses from their ISO price and if one was to start selecting and accumulating now the dividends would range from 6.5% to 9% on invested capital.
Most of these preferreds, some are prepetual, bear a date for redemption and at the original issued price. Since they are trading at a substantual reduction from that price an assured capital gain is built in.
The foregoing fulfills a part of my overall investment strategy. I have been and will be continuing to selectively add preferreds as the technical pictures unfold favorable.Remember, we are in a bear market, as far as I am concerned,: bear market traps take no prisoners, so care and close attention to your tech info on each proposed purchase is of the utmost importance.
Oh yes, don't be fearful of the issues of tis oversold equity they include the Royal Bank, BMO, Thompson, Bombardier, Power Corp, Power Financial, BNS just to name a few the list is rather extensive.