WSJ: Auction-Rate Securities Alive & Well

By SIMON CONSTABLE

Is it déjà vu all over again in the debt market?  You’d be forgiven for thinking so, especially if you remember the auction-rate securities debacle from 2008.

Those securities were and are used by some tax-exempt organizations as a form of inexpensive financing. They price using a Dutch auction at periodic (usually short) intervals.  Read more here.

Photo by Joshua Mayo on Unsplash

Barrons: Energy Boom Powers Up Shipping

By SIMON CONSTABLE

The North American energy boom should help power up an industry that's been stuck in the doldrums: marine transportation.

Shipping, the ugly stepsister of commodities, has been unappealing over the past few years. A massive shipbuilding boom created overcapacity, sending shipping fees into free fall. The Baltic Dry Index, a key benchmark for waterborne transportation fees, peaked at 11,793 in May 2008 before plunging to 663 in December that year, according to FactSet. By Friday it crept back to 933. See original story here.

WSJ: When Preferred Securities Make Sense

By SIMON CONSTABLE

Investors seeking income might want to take a peek at preferred-stock funds.

What is preferred stock? It is a hybrid security that is a cross between equity and debt. Like debt, it pays a fixed amount of interest, and holders get paid before any common-stock dividends are distributed. But like equity, it tends to have larger price swings to both the upside and the downside.Buyers may reap handsome yields of around 6% with advantageous tax treatment on distributions. Still, you need to understand the nuances of preferred stock to get the most from it.  See original story here.