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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:

TO:            Investments Consultants FROM:       Larry K. Pitts, CFA DATE:        February 21, 2014 SUBJECT:  7% Income Return “Forever” The purpose of this e-mail is to discuss the current yield of our Preferred Income Portfolio (PIP).  Our investment strategy is to only own preferred issues with a coupon rate greater than 6.50%.  Since 2002 all preferred issues with a coupon higher than …

TO:                 Investments Consultants FROM:           Larry K. Pitts, CFA DATE:            December 31, 2013 SUBJECT:     What’s Wrong With REITS, Anyway?  The purpose of this e-mail is to review the REIT article which appeared in the December 20, 2013 Wall Street Journal.  The negative performance of REIT preferred stocks has also negatively impacted our Preferred Income Portfolio (PI…

2013-12-31 TIA PIP Annual Letter

Posted on August 26, 2014

December 31, 2013 Dear Mr. and Mrs. Jack Smith, This is our 2013 annual client letter for our Preferred Income Portfolio (PIP).  We have completed our fifth full year with this fixed income portfolio.  In the fourth quarter of 2008, TIA introduced this portfolio as a fixed income alternative to common stocks.  Preferreds were selling at deep discounts to their $25 par value with double-digit yie…

Preferred Income Portfolio, Inaugural Quarterly letter This inaugural quarterly letter is exclusively for our Preferred Income Portfolio (PIP) clients. We are completing our fifth year of PIP. It was developed as the only attractive fixed income alternative to common stocks. We have been bullish on the stock market and bearish on bonds for the past decade. One of your exhibits is our quarterly al…

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