Ken put it euphemistically when he said, “2008 was a fluid year…a blur.” Investors scrambled to find solid investments. The US Government and Warren Buffett turned to preferred stocks as that investment vehicle. The US Government used preferred stocks to stabilize the world economy. Buffett used them to secure investments in GE and Goldman Sachs.
In 2010, the yield on preferred stocks is a staggering 23%, compared to modest gains in the S&P.
Ken got into preferred stocks in 2005 when customers were looking for corporate bonds to invest in and there were no good opportunities in that market. Ken’s interest in preferred stocks led him to create the Winans International Preferred Stock Index (WIPSI). The WIPSI has become the barometer of the preferred market, much the same way the S&P is a barometer of the stock markets.
We recapped various asset classes, many of which are up for the year-to-date. In fact, Ken concedes that most investors are “pleasantly surprised” that the US markets are up. Two asset classes are outperforming the others, however. Corporate bonds are up double digits for the year. Silver is up even more; 59% for the year-to-date.
Listen to the entire financial discussion below: