Sheaff Brock Preferred Stock portfolio | question marks about rising interest rates

Preferred Stock—Expect the Question; Consider the Answer

The unrelenting search for reliable investment income is an important theme in retired clients’ investment plans, and preferred securities certainly share the limelight. What’s more, given the current buzz about the new tax law, it’s hard to ignore the fact that certain features of the law can favor investing in preferred stock, potentially increasing the demand for high-income investment vehicles. The question: As you’re discussing this very topic at the tennis club, expect the question: Interest rates are on the rise. By [...]

Sheaff Brock Preferred Income Portfolio | Impact of New Tax Law on Preferred Stock

New Tax Law Bodes Well for Companies Issuing Preferred Stock

There’s a whole lot of media buzz going on about the new tax law and how good a thing that law is turning out to be for corporate America. Turns out, certain features of the law may be a very good thing for investors in preferred stock as well. What’s that all about? First, by way of quick review, preferreds are hybrid securities, blending traits of both stocks and bonds. Preferreds, like common stock, represent ownership in a company, but [...]

Interest Rate Signs Increasing in Size | Managing Interest Rate Risk for Preferred Stock Income | Sheaff Brock Investment Advisors

Managing Interest Rate Risk in a Preferred Stock Portfolio

If I invest in preferred stock for the income just when interest rates are rising, won’t I be setting myself up for losing money? “Not necessarily,” contends JR Humphreys CFA, CAIA, Senior Portfolio Manager at Sheaff Brock Investment Advisors. Humphreys explains that, “increasing interest rates is usually the result of an improving economy that could lead to credit rating upgrades for the preferred equity, resulting in a higher price.” Many investors have the perception that preferred securities are highly interest-rate [...]

Sheaff Brock | Index Income Overlay | covered calls | net unrealized appreciation | financial planning

Planning Conversation Can Net Unrealized Appreciation Benefit

It’s right there in Section 402 (e)(4)(B) of the IRS publication—that part about net unrealized appreciation. Without having in-depth planning conversations with their advisors, clients might miss out on important tax benefits. In an interview with our SheaffBriefs editor, Sheaff Brock Senior Vice President of Investments Christy Jordan pointed to the following statement in the IRS Code: Section 402(e)(4)( B) provides that in the case of a lump sum distribution which includes employer securities, there shall be excluded from gross income the net [...]

Sheaff Brock Investment Advisors | portfolio managers offer offense, defense, and special teams for investors

Building All Aspects of Gameday Strategy

Like a well-run football team, portfolio managers should consider offering long-term investors all three facets of game strategy: offense, defense, and special teams. Marv Levy, former head coach of the Buffalo Bills who led the team to an unprecedented four consecutive Super Bowl appearances, explained, “There’s these parts to football—offense, defense, and special teams. You’d no more ignore special teams than you would ignore offense and defense.” He further defined these three different areas of focus, which are all going on [...]

Sheaff Brock Investment Advisors | Indianapolis | Preferred Stock Performance | Asset Class

Will Higher Interest Rates Huff and Puff Your House Down?

Ever since (think back approximately a year-and-a-half) rates began their slow upward movement, income investors have experienced a certain degree of worry about the “big bad wolf” blowing down their carefully constructed investment “abodes.” Thankfully, as Sheaff Brock senior portfolio manager JR Humphreys, CFA, CAIA explains, if you’ve “built” for the longer term (planning a longer holding period), there may be little reason for concern. In fact, Humphreys pointed out in an October interview with our SheaffBriefs editor, since December [...]

Sheaff Brock | rising interest rates | Dave Gilreath Sheaff Brock | income-bearing investment strategies | REITs | Preferred Stocks

Do Rising Interest Rates Put Investors Behind the Curve? It Ain’t Necessarily So.

Rates are rising. They will likely keep rising; accept that and adjust, is the message astute investors should be receiving. Rates are rising. They will likely keep rising; accept that and adjust, is the message astute investors should be receiving. When we compare the rates on U.S. Treasury bonds now to those of one year ago, Sheaff Brock Managing Director Dave Gilreath observes, at every maturity, rates are higher now by 60 to 95 basis points. Actually, he adds, U.S. 10-year [...]

Salzinger Sheaff Brock | Mark Salzinger | Exchange-Traded Funds | investment strategy

The Anomalies and Advantages of Exchange-Traded Funds

Exchange-Traded Funds (ETFs), often described as “baskets” of marketable securities, contain anywhere from 30 or 40 stocks to thousands, with the typical ETF containing companies numbering in the hundreds. Asked to compare owning ETFs to owning individual stocks, Sheaff Brock joint venture partner Mark Salzinger sees the “baskets” as a risk-reduction strategy, because with ETFs, investors are exposed to a broad range of companies. In fact, through ETFs, investors can gain exposure to “satellite” or niche positions, Salzinger adds—anything from [...]

Sheaff Brock Investment Advisors REITs portfolio performance investing in apartments

REITs – The Timing may be Just Right

Investment income can be rather hard to find these days, as you’ve no doubt noticed. With interest rates in “the 2’s,” (not to mention the risk of principal loss when, as Kiplinger predicts, those rates likely rise), it’s time to get strategic, taking a broader look at portfolio possibilities. When both stock and bond markets become more unpredictable, Sheaff Brock feels it becomes important to diversify into assets that are less correlated with traditional stock, bond, and cash holdings. [...]

sheaff brock investment advisors active management style portfolio investing

Active vs. Passive: “Stand Up and Be Counted”

One question any investor must consider, Sheaff Brock Managing Director Dave Gilreath agrees, is whether to take an active or passive approach to investing. While there is certainly room for both approaches in an investor’s portfolio, he concedes, ’tis the season for the stock picker and sector picker to stand up and be counted. Why? “Markets are not cheap right now,” Gilreath explained in an interview with our SheaffBriefs editor, “whether judged by ‘price-to-sales’ or ‘price-to-book.’” Unlike 2009, for example, [...]