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Using BCX's 7+% Yield, To Hedge Against Inflation In Your Income Portfolio

Published Fri, 19 Oct 2018 07:37:31 -0400 on Seeking Alpha

Introduction: Right now there are a few key areas of risk when constructing an income generating portfolio. Interest Rates are rising after years of an extremely accommodative Federal Reserve policy. The process of raising the long end of the curve can wreak havoc on an income oriented portfolio's principal valuation. Efforts to mitigate these risks often involve strategies such as weighting to Short Duration, using Bond Ladder strategies, or purchasing ETF's that effectively hedge out rising rate risk by shorting Treasuries. Yet there are more risks to your portfolio's valuation that these strategies can't fully address, such as Credit Spread widening, but I would like to focus on one specifically in this article: Inflation.

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Strategies to Hedge Against Inflation: Inflation Risk to income portfolios carries two primary issues: 1.) the risk to future Purchasing Power of one's income generated from the portfolio, and 2.) the risk that rising inflation forces an acceleration in the pace of rising interest rates. The latter risk would push up Longer Term Inflation Expectations, which would result in the market demanding higher yields now, i.e. lower income security prices. A quick search can turn up numerous articles on the topic of strategies for mitigating the risk of inflation for income portfolios. Here's my quick summary of the common strategies you might hear proposed:
1.) TiPS: Pros: Treasuries linked to the Consumer Price Index... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
GABELLI GLOBAL GOLD NAT RES & INC TRUST 4.44   0.0 0.00 0.00 13.48
BLACKROCK ENERGY AND RESOURCES TRUST 10.94   0.0 0.00 0.00 8.50
PETROLEUM & RESOURCES 15.85   0.0 0.00 0.47 2.98
ASA 12.30   0.0 0.00 0.02 0.16

GABELLI GLOBAL GOLD NAT RES & INC TRUST - GGN
GABELLI GLOBAL GOLD NAT RES & INC TRUST - GGN  


Older articles featuring Gabelli Global Gold Nat Res & Inc Trust (GGN):
GAMCO Global Gold, Natural Resources & Income Trust Declares Monthly Distributions of $0.03 Per Share
GAMCO Global Gold, Natural Resources & Income Trust Declares Monthly Distributions of $0.03 Per Share
GAMCO Global Gold, Natural Resources & Income Trust Declares Monthly Distributions of $0.03 Per Share
GAMCO Global Gold, Natural Resources & Income Trust Declares Monthly Distributions of $0.03 Per Share
GAMCO Global Gold, Natural Resources & Income Trust Declares Monthly Distributions of $0.03 Per Share
GAMCO Global Gold, Natural Resources & Income Trust Declares Monthly Distributions of $0.03 Per Share
Gold Mining Stocks Broaden Their Appeal - With Dividends
BCX: A 7.8%-Yielding CEF With Diversified Exposure To Commodities
Closed-End Funds: 12 Funds In The 10%+ Yield Club At A Discount
The Fed's Decision May Yield A Surprise

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