Camarda is proud to announce that the investment advice of its Chairman, Jeff Camarda, was recently featured in a Forbes story. An excerpt follows, and a link to the entire story can be found below.
How To Invest Your Money In 2nd Quarter:
5 Best Funds To Buy Now
By Ky Trang Ho
Where should mutual fund investors put their money in the second quarter? I asked a panel of financial services pros to explain their read on the stock market and give their best mutual fund investing idea.
4. Blackstone/GSO Senior Floating Rate Term (BSL)
By Jeff Camarda, CFA®, CFP®, ChFC®, CLU®, E.A.®, MSFS®
After the recent rally off the February lows driving major U.S. stock indexes into the black for 2016, we are somewhat ambivalent on the market’s prospects for the second quarter. 2016 has gotten off to an unsettled start. In late March, the Dow Jones Industrial Average (DIA) and S&P 500 (SPY) rallied gains for the year after slipping in January and even more in February. While the current bull market is now one of the very longest on record, with many wondering if the recent correction was the beginning of a bear market, at last, Camarda believes that stocks will continue to perform for the next year at least, for several reasons:
- U.S. economic data continues to improve with employment and inflation (at last) both up
- The Fed appears set to slow the pace of interest rate increases, weakening the dollar (good for exports and big companies’ bottom lines), and leaving few alternatives to stocks for investors seeking even modest returns.
- Oil seems to have (for the moment at least) bottomed hard and bounced from the low $20s a barrel to over $40, alleviating a concern that had (somewhat irrationally) scared the dickens out of investors around the world.
A new bear market will eventually come. But we think it will not be this year or early next. Still, U.S. stocks offer only fair value at best. The Shiller CAPE (“cyclically adjusted P/E” ratio) is nearly 60% higher than its historical mean. And with the recent rally having boosted us out of the apparent bargain basement, further gains in second quarter seem dicey.
Still, bargains are to be had. We particularly like the closed-end fund space, which has been in discount territory for much of the past year, and remains unusually undervalued at nearly -12% to average fund net asset value (NAV). Unlike ETFs and mutual funds, closed-end funds do not adjust the share float to match investor demand. Supply and demand forces can drive pricing distortions and enable bargains or overpricing.
The near-certainty of rising U.S. interest rates makes asset classes like bonds, utilities, and dividend stocks less appetizing. But floating-rate funds – secured by adjustable rate loans senior to borrowers’ bonds and relatively immune to interest rate risk – are appealing for conservative investors.
Blackstone/GSO Senior Floating Rate Term (BSL) recently had for a 7% discount to NAV. With a current yield of 8% and an effective maturity of six years due to mandatory NAV liquidation in 2020, Blackstone/GSO Senior Floating Rate Term (BSL) has an effective yield to maturity of nearly 10%. With current income and a hard repayment date, this can be an attractive place to ride out a rough market while waiting for interest rates to rise.
Jeff Camarda, CFA®, CFP®, ChFC®, CLU®, E.A.®, MSFS® is the founder of Camarda Wealth Advisory Group, LLC in Jacksonville, Fla. with $220 million in assets under management.
Click here for a link to the full article.