Trust Investment Advisors

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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:

Mr. and Mrs. Smith, TIA developed our Preferred Income Portfolio (PIP) to achieve a fixed income strategy designed to produce superior yields while avoiding the "perpetual maturity" inherent in these securities. We have shared dozens of related articles on preferred stock issues with you. TIA is maybe the only firm to utilize the financial crisis to introduce a "call protection" portfolio. We bel…

2015-02-25 Where to Park Your Cash

Posted on April 20, 2015

Dear Mr. and Mrs. Smith "Where to Park Your Cash" was the title of an article in the Wall Street Journal, dated February 21, 2015, which reviewed the available fixed income alternatives for cash management. The challenge is the current meager returns on these traditional investments. The days of a reasonable return on virtually "risk free" cash investments are just a fond memory. Interest rates …

TO:          Investment Consultants FROM:      Larry K. Pitts, CFA DATE:       August 6, 2014 SUBJECT:  Shorter Call Preferreds vs. Cash Alternatives In a July 2014 article, the Kiplinger letter discussed ways to boost your cash yields.  Here is their encore: “For the four months ending June 13, Juiced-Up Cash delivered $279 -- total return of 0.56% for an annualized gain of 1.68%” on a hyp…

TO:           Investment Consultants FROM:       Larry K. Pitts, CFA DATE:        May 5, 2014 SUBJECT:   Preferred Income Portfolios The purpose of this e-mail is to discuss our different preferred stock portfolios.  The Preferred Income Portfolio (PIP) is our benchmark portfolio with 31 issues and 41 months of call protection.  PIP is e-mailed to you every Monday with its Friday closing s…

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