ZION - Safe Preferred Stocks And Baby Bonds Still Selling Below Par
- Opportunities in preferred stocks and baby bonds are getting rare.
- Our favorite safe buys below par are a baby bond (ECCX) from Eagle Point Credit and a “term-preferred” stock (GAINL) from Gladstone Investment .
- Investments that are issued from a BDC or a CEF have legal leverage limits, thus providing safety.
- These leverage limits have kept BDCs and CEFs from ever having defaulted on a bond or preferred stock. This history of no default adds to their safety profile.
- The investments we are recommending have maturity/redemption dates at prices higher than they trade now. This provides protection of your principal and thus protection against price damage from higher interest rates.
For further details see:
Safe Preferred Stocks And Baby Bonds Still Selling Below Par