Saturday, March 14, 2015

My interest rate is not rising...

A recent FOMC caused an immediate 4-and-some-odd-percent correction the value of my holdings.
A self-fulfilling prophesy, perhaps. If the market believes REITs and other higher-dividend equities are bond-equivalents, then it will reprice them according to what it believes is the risk-free interest rate, or will be soon. Funny, nothing actually happened, but apparently vague hints are all it takes to reprice real assets in this country.
It's not clear that the earning potential of any of my holdings has changed.
I looked at the trailing 12 month dividend payments to my IRAs; biggest 12 month interval in my history.  At least the rising income piece seems to be intact. I can't completely look past the 4+% slide in account values from their peak, but this is the time for me to remember my principles and hold to the values I have adopted. If values drop another 20%, I still need to hold fast. I'm not aware of a better strategy than the one I've got, so there's little value in selling while prices are down. I've seen a few companies melt down. I know what that looks like. So far, nothing bad appears to be happening with any of my holdings, other than "headwinds" and a broad-based pull back in value.
I'm fully invested, as usual. That means no ready cash. The only way that is going to happen is turning off the DRIPs, or waiting for a cash infusion to the pension plan. That won't help the IRAs. I've watched some other investors sell a few companies that failed their screening criteria. I'm not convinced I have anything so broke it needs replacing. One guy I read simply says "never sell".  Pretty easy advice. For now, I think I'll take it. 

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