I am getting killed on my preferred stocks due to these high interest rates. The worst one is Public Storage. It only has a 4% yield, yet the share price is down 35% from my purchase price. The second problem I have with the four that I own is, they are all perpetual, and then they are all non-cumulative. With interest rates forecast to continue on up, do I take a 25% hit now, or wait for possibly years to get back to even? I’m a saver, not a trader.
Are you listening to the earnings calls or reading the earnings reports? Hearing from the CEO or other C-suite officers is very important when deciding to buy hold or sell.
How will you react if price drops another 20%? How will you react if you sell and price goes back up? Depending on your age and where you are financially are major factors to consider. Why did you buy these stocks? Has the story behind these buys changed? If you didn't already own it, would you buy it today?
They're eating the Penguins, they're eating the seals...
My take ... unless there's been a high drain on talent, a bad acquisition/merger, a serious change in competition/demand, keep it.
Unless, as noted above, you bought it based on a pundit chattering vs solid reasoning for the purchase. They will recover if sound.
If they are preferred shares then you likely bought them for income. All preferreds are down because interest rates are up and they are very interest rate sensitive. I have one that was yielding a little above 5% when I bought it and it is down 22%. It doesn't bother me because I bought it purely for income. When rates drop at some point the price of the preferred will go back up. I'm not selling mine because there is not a specific problem with the company and I'm not worried about them not making a dividend payment. I have some long bonds that I bought in the last few months that are also down but since I'm going to hold them to maturity it doesn't really matter. If you take the loss how are you going to make that back without taking on more risk?
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