PDO - PDO: You Won't Be Able To Lock In The 11.74% Yield For Long If The Bottom Is In
2024-03-13 09:00:00 ET
Summary
- Market continues to rally in 2024 with strong corporate earnings and forecasts from major companies.
- PDO has increased by 16.49% since October 2023 and offers a double-digit yield.
- Bullish on PDO due to potential Fed pivot and expected appreciation in fixed-income assets.
The market continues to rally in 2024 as the S&P 500 is up 7.42%, and the Nasdaq has climbed 7.15% YTD. While the bears think the Nasdaq above 16,000 and the S&P above 5,000 are unsustainable, we could very well be in the early innings of a multi-year bull cycle. Corporate earnings continue to be strong, and the largest companies in the market, including Microsoft ( MSFT ) and Alphabet (GOOGL), are forecasting strong earnings growth for years to come. We are also on the verge of a Fed pivot as Fed Chair Powell testified on March 7 th that the U.S. Central Bank was not far from gaining the confidence it needs from inflation data to begin cutting rates. It looks like shares of PDO bottomed toward the end of 2023 when Fed Chair Powell pivoted and started discussing the possibility of rate cuts in 2024. The current setup is strong for fixed income, and when the Fed pivot occurs, I think that PDO is likely to increase. I think now is a good time to lock in the double-digit yield as PDO's distribution yield could finish the year in the mid to high single digits. As an income investor, I am excited about the opportunity in fixed income because many assets have been under pressure during the rising rate environment, and establishing a base at the current levels could generate capital appreciation in the future while locking in a yield on cost of 11.74% for the monthly distribution....
PDO: You Won't Be Able To Lock In The 11.74% Yield For Long If The Bottom Is In