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Preferred Income Portfolio

The investment objective of TIA's Preferred Income Portfolio (PIP) is three-fold: 1) to provide a taxable fixed income alternative through fixed quarterly dividends, 2) to manage the call protection and duration risk,  and 3) to produce "equity-like" total returns through the superior historical yield spreads to US Government Bonds existing in the preferred stock market.

There are several components in TIA's preferred stock philosophy:

  • High quality marketable preferred stocks (NYSE)
  • Superior historical yield spread to 30 year US Government Bond
  • $25 par value
  • Quarterly dividend payments
  • Less than 5 years call protection

The typical preferred stock portfolio will consist of a diversified portfolio of 20-25 stocks. TIA maintains and monitors diversification guidelines on both a company and industry basis.

For more detail as well as commentary on current conditions, the following newsletters may be of interest:

2017-01-15 PIP Quarterly Year End Update

Posted on February 01, 2017

January 15, 2017 Dear Mr. and Mrs. Smith, 2016 marked the eighth year of our Preferred Income Portfolio (PIP). Through those eight years, our investors have enjoyed above-market income and below-market volatility. 2016 started with the stock market dropping about 11% while PIP suffered about a 5% loss. Then it was off to the races with a furious rally into the end of the first quarter, closing w…

2016-10-10 PIP Quarterly Update

Posted on October 25, 2016

October 10, 2016 Dear Mr. and Mrs. Smith: The Preferred Income Portfolio (PIP) had a very active third quarter in 2016.  Standard and Poor (S&P) added a new sector to their S&P 500 index by removing real estate stocks from the financial sector and giving them a sector of their own.  This rebalancing caused an increased demand in Real Estate Investment Trust (REIT) shares as mutual funds …

2016-07-15 PIP Quarterly Update

Posted on July 29, 2016

Dear Mr. and Mrs. Smith, The Preferred Income Portfolio (PIP) continued to perform superbly in the second quarter of 2016. PIP’s current yield of 6.42% remains over 4% than the 30-year US Treasury bond. Over the second quarter, the average share price rose from $26.15 to $26.96 giving us capital appreciation of over 3% before adding the annual income stream of almost 7% In a world of investing v…

2016-01-15 TIA Annual PIP Review

Posted on February 24, 2016

January 15, 2016 Dear Mr. and Mrs. Smith, 2015 marked the seventh year of TIA’s Preferred Income Portfolio (PIP). It was an outstanding year with total returns outperforming other fixed income sectors and the major stock market averages. PIP continued to deliver almost 7% income while its average share price on December 31, 2015 was within a nickel of its December 31, 2014 price. PIP’s stability…

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