Below are our latest blog posts for the week of February 22nd.  Click on the links below to view the full article.

Late last year we took strategic steps to raise cash for our Dynamic CEF Income portfolio in light of the decline in high yield bonds.  In hindsight, having a 20% money market position going into the January-February 2016 correction was certainly a relief.  Nevertheless, it has always been our plan to deploy that capital at more advantageous prices or in funds exhibiting a stronger relative value story.

There is a saying on Wall Street that the markets try to deliver the maximum amount of punishment for the most investors possible. They call this phenomenon the “pain trade”.

In essence, the pain trade is when investors become so overly bullish about a specific theme or outcome that they overload one side of the boat. As the boat leans further to one side, the majority of participants become complacent as their thesis bears fruit.

Preferred stock ETFs were once considered a tiny corner of the alternative income marketplace that had dodged the bullet of credit contraction. High yield mainstays like junk bonds, master limited partnerships, and even REITs have felt the pain of income investors reeling in their risk targets and running for the safety of high quality bonds.

Published on NASDAQ.com

As the ETF universe becomes saturated with new investment strategies, it becomes harder and harder for issuers to add unique and value-added features.  This is particularly true in the world of dividend investing, where many of the top funds were early to the scene and captured a significant market share.

P.S. Are you confident in your portfolio?

At FMD Capital Management, we are focused on using low-cost and diversified investment vehicles to meet our clients' goals.  Our new client process includes a comprehensive portfolio review and a detailed game plan to transition your accounts to a sensible investment strategy.  Learn how you can benefit from this process.