Why I Still Believe in This 13%+ Yielding Income Fund
Vložit
- čas přidán 8. 04. 2024
- / dividendbull
I’ve noticed over the years that this closed-end fund has a way of dividing people, especially after the pandemic and when interest rates started increasing. Because there are some really good things about PDI, and there’s also some concerning things about this investment. On one hand, it’s currently offering a dividend yield of almost 13 and a half percent. On the other hand, its share price has gotten beaten up over the past five years. PDI has also never cut its dividend since its inception. But, it also holds some very risky investments inside of it. PDI also offers a really good DRIP discount, meaning that when you choose to reinvest your dividends, you actually get a 5% discount on all your shares.
But then according to PDI’s undistributed net interest income report, which shows how well covered its dividend payments are, this fund has been consistently coming up short for awhile. But it does pay a monthly dividend, which again has never been cut. Yet, PDI comes with a very high expense ratio, even by closed-end fund standards. Despite these things, PDI has continued to cover its monthly dividend, seemingly defying the odds at times. More recently this funds share price has been seeing a really good recovery. But again, on the negative side, it’s currently trading for a big premium compared to its historic performance. So you can see there’s a lot of great things, and concerning things about this closed end fund going on right now. Despite these things, I continue to hold this fund and I remain optimistic about its future. So in this video, we’ll look at the most recent developments with PDI and I’ll discuss why I hold this fund, and where I think it’ll eventually go in the future.
Because of dividends, I first began investing in stocks. It's important, in my opinion, to be able to live off of dividends without selling if you invest and make other income in addition to payouts. It suggests that you may pass that down to your kids and give them a leg up in life. Over the years, I've invested over $600k in dividend stocks; I continue to buy more today and will keep doing so until the price drops even further.
Hearing from an experienced investor who has survived adversity and prevailed is always motivating. It may be frightening when your portfolio goes from green to red, but if you have invested in strong firms, you should maintain growing them and stick to your goal.
I wholeheartedly concur, which is why I appreciate giving an investment coach the power of decision-making. Given their specialized expertise and education, as well as the fact that each and every one of their skills is centered on harnessing risk for its asymmetrical potential and controlling it as a buffer against certain unfavorable developments, it is practically impossible for them to underperform. I have made over 1.5 million dollars working with an investment coach for more than two years
this is all new to me, where do I find a fiduciary, can you recommend any?
My CFA ’Melissa Terri Swayne’ , a renowned figure in her line of work. I recommend researching her credentials further. She has many years of experience and is a valuable resource for anyone looking to navigate the financial market.
Thanks for sharing, I just looked her up on the web and I would say she really has an impressive background in investing. I will write her an e-mail shortly.
Sweet, I just transfered a couple thousand dollars into my portfolio today to open a position in PDI and watched the old portfolio analysis video on it and now I can watch this one before I buy in.
PDI is up over 16% since I started buying and a 13.4%. Dividend on top.
Excellent review of PDI, thanks
5% expense ratio? WoW! This is one VERY expensive Closed End Fund. It would have to be a significant discount to NAV for me to even consider it. Striking video - it was good work on the outline and fleshout, thanks.
Love pdi purchase from your recommendation up 9%
Now I own PDO. In Pimco I trust.
I agree. I'm holding mine. Thanks for sharing your research and opinion again.
Excellent review , thank you
When looking at any stock total return is the yardstick that should be used and not dividends. But you need to go one step further and that is to compare it to other stocks. If a stock cannot beat an index ETF like the SPY, then look for another stock or use the index. I compared PDI to SPY buying each at the beginning of each year from 2014 and selling at the end of 2023. Of the 10 years, PDI never out preformed the SPY. Looking for dividends may be at the expense of total return. Since this is a closed end fund, maybe there should be some discussion about NAV.
I shoveled money onto PDI when it suddenly dipped below it's nav for the first time since covid.
It was a 8 percentage allocation all in one go.
I am since up by a lot.
Today it is a 6% allocation as it is no longer discounted.
As with all CEFs, you need to time your purchases based on discount/premium.
Trust the management, buy the dips.
Ah. PDI. I have a love hate relationship with this fund. It’s my biggest holding but unfortunately I bought it when the price was higher and I’m losing on share price but where else can I get 13% on my money. It’s been creeping back up and when interest rates go down it should go up faster. I have 3 pimco funds PDI pty and pfl
PTY is doing great right now. Wish I got more when it was in the 11's.
Got PDI and PDO
Keep buying PDI!
Own these and other pimco funds. Have been steady although price has been beat up last few yrs.
What is a good site to invest in private stocks?
Please analyze GGN
Hey GLAD just did a reverse split. Can you make a video on that stock?
I do own it. My favorite thing about these fixed income fund is the payout time, usually on the first day of the month. Been pumping these as well as PFLT to get my early income up!
I sold PCM today, I'm selling PDI tomorrow
Thanks
I miss the opening music.
$KMI ROC% has been very high. And energy is booming. I am a buyer under $16.
Do you have any suggestions for investments that promote small businesses, community development, and/or financial inclusion?
What is your take on CLM and CRF?
I've had CLM and CRF for a few years. They are great. CLM is putting out $0.10 per month. CLM is $7.73 so getting $1.20 for the year is good. 17%
I would recommend it. But it's up for you to decide. 🤷♂️
@@aronstein140 It's been on a downtrend, what makes you think they're worth buying?
Can you shed some light on the HIGH etf?
I guess I'm confused at the allure of this CEF based largely on its expense ratio of $2.30. Enjoyed the video.
Most CEFs have leverage and that explains most of the expense ratio.
Wow being charged 5% for a 39% 5 yr loss, only to be given your own money back to you to be taxed. Yeah I have so much faith in it too
There are other closed end funds such as CLM, AGGH
Pimco is an Allianz fund so you may well be right. Allianz is the biggest insurer-swindler company I ever experienced
I avoid. I do not understand bond funds, CEFs, mREITs or covered call funds. Don’t like ETFs.. don’t think I’ll ever touch options. I like individual stocks, individual bonds and preferreds. Sally Mae bonds seem interesting.. not sure why they are cheap.
How does someone get the 5% drip discount?
According to what he writes in his description... "PDI also offers a really good DRIP discount, meaning that when you choose to reinvest your dividends, you actually get a 5% discount on all your shares."
@@BenjaminHansen yeah but where do you have to invest to get that discount? I've never seen that reflected in my reinvest in my fidelity account.
@@seanuh60 If the stock sells for say 10.00 then when the dividend is paid and you have drip then Fidelity would by the shares for you at 10.00 - 5% = 9.50 per share
@@seanuh60I assume you look at how much the reinvested dividends purchased and figure out if they were 5% below cost.
Call Fidelity, they are a great customer service.
very interesting
I don't think you mentioned that it uses leverage, thus that explains most of the return of capital. If you buy an undervalued bond with leverage, then your intention is to make money on the bond appreciating in value.
5% ?? No thanks.
Pimco rules
What do you think about CLM?
It's the only CEF I'm investing in. Dividend drip at NAV. Then, sell off your shares before the rights offering, wait a month for the price to fall. Then pile back in at a lower price and drip at NAV until the next RO.
CLM also follows the S&P 500 index. Low risk and currently offers an 16.88% yield.
How do you know when the rights offer is?
@@turbojeremy13 They publish in the press releases section on the CLM website. They used to do it every year, but they suspended it due to the significant drop NAV. The last one was in 2022. It might be for 2025.
@@tanju5465 good to know thank you
It's also on its second consecutive dividend cut. As far as it following the S&P, it's down 1.4% over the past year while the S&P is up 26.79%, lol. If we move that timeline out to 5 years, CLM is down 37.1% while the S&P is up 79.19%.
@@GrandPrix46 CLM distributes dividends based on NAV. This year, it also pays a 21% dividend based on NAV. You cannot analyze CLM in the traditional way, only by looking at charts and dividend cagr. I recommend you to research CLM on how to manage the position.
😅
Catastrophic stock price development in a bull market! These 13% I get also elsewhere with much better performance.
Total Return is what matters, Total Return says sell PDI. Plus PDI has horrible Sharpe Ratios (risk adjusted returns) ! All these PIMCO funds are loaded with high risk. Thinks for exposing part of the risk.
If you can't explain to me the attractiveness of Romanian bonds, then why are either of us here?
Ugh you are emotionally attached to a loser.
PDI has not EPS, so it is paying out of $0. Good balance sheet though.