Matthew Waterman
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Matthew Waterman in Brand Power,

Trim Your High Yielders In Case The Fed Acts

The Fed is meeting this week, and investors don't appear to be expecting much in the way of changes. The one thing I've learned over the years is that things happen when people don't expect them to. So that means it's a perfect time to take profits on your high yielders. In my case, I'm trimming a bit off of the Pimco High Income Fund (PHK), as well as a couple of my mREITs, namely Annaly Capital (NLY) and American Capital Agency (AGNC). I'm actually completely selling out of AGNC because I don't think there are any especially great opportunities for them to take advantage of right now.

Since I'm showing paper profits on all of these holdings, I'm going to go ahead and trim about 1/4th of off of each position and move it to cash for the time being until the Fed meeting passes. Of course, it's totally likely that the Fed will do nothing, but why give away those trading profits..