PDI - PDI: I Sold A Chunk Of The Position But I Am Still Bullish On This Fund Going Forward

2024-07-02 09:00:00 ET

Summary

• I sold part of PIMCO Dynamic Income Fund position for other investments, but remain bullish on the fund.
• Risks to investing in PDI include opportunity cost, potential distribution reduction, and macroeconomic environment uncertainties.
• PDI's potential for capital appreciation and income generation remains strong, especially if Fed cuts rates in 2024.

Sometimes, investors sell part of a position or even an entire position that they are still bullish on. They may need to raise capital for a life event or for another reason. I have written about the PIMCO Dynamic Income Fund ( PDI ) since the beginning of 2022 and have remained bullish the entire time. I found myself in a situation where I wanted to finish off my positions in Tesla ( TSLA ) and NVIDIA Corporation (NVDA), and I didn't want to pull capital from my liquidity to do so. I fell into a situation where I looked at the opportunity cost and decided that I would liquidate PDI from one of my accounts to raise enough capital to finish off my TSLA position and get closer to finishing off my NVDA position. I still hold PDI in other accounts as I am bullish on the fund, and plan on reestablishing the position in the account I liquidated it from in the future. While I may get caught a bit offsides if the Fed cuts rates in July with the intention of repurchasing shares of PDI, that's a risk I am willing to take as I believe PDI will trade sideways until the Fed starts its cutting cycle. If I hadn't been working on the TSLA and NVDA positions for long-term capital gains and generating income from writing covered-call contracts, I wouldn't have sold PDI from one of the accounts I hold. From an income perspective, I think that PDI is a strong closed-end fund ((CEF)) that will continue generating monthly income, and its shares could experience significant upside during a Fed cutting cycle....

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