While this is not a TRADING thread -- nor am I a trader... I am "market aware" which to me is completely different than just the itchy trigger finger -- or just buy and hold and forget. As such I read A LOT -- and I listen A LOT....
And I look around at lots of various factors. So when I hear that auto sales have hit records - and housing is making a major recovery... and that the talking heads (TV people) are all talking about the RECOVERY rather than the depression, this signals a shift that I need to pay attention to. My friends are all talking about trips - and or - what they're buying or planning to buy. Thus the selling and discussion about selling this or that is over. Yippee is all I can say about that!
But what does this tell me about "the market" and or what I'm invested in. I've had a fairly large position "parked" for months now in JNK bonds... and this pays a great monthly dividend so it's been good to say the least. BUT a holding like this will get clobbered in share price (which would actually raise the dividend percentage if you buy at the lower prices) which would not be a good thing given the amount I hold. I want to be AHEAD of any such drama... and as I've preached here again and again -- I want to SCALE OUT of a position. So this morning I sold 1/3rd of my position. It (JNK) went ex dividend on 03/01 - so I get this months dividend (paid on the 11th)... I've got nice capital gain % in the name as well as collecting that magic dividend.
What I'll buy is yet to be determined. No rush. I'm shopping for a new position not adding to existing stuff. What I want is something that WON'T be interest rate (a rise in) sensitive - while still giving me a good dividend but that might also do well in a "good" economy.
Annaly Capital Management (NLY) is another candidate for scaling out of - although with it's much higher dividend % -- I'll scale out a bit slower... maybe 20% of the holding at a time. My position is not as large but it's certainly interest rate sensitive so I've got to keep on my toes. If the FED even hints that rates are going to rise -- or that they're going to start to reduce their Treasury purchases ---- Rates are going to start to rise. I just am trying to be "somewhat" ahead of that. Most likely - nothing will happen and I will be way early to that party. I'm okay with that.
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