Yeah, so if it’s on the buy list and there’s not a caution or instructions about the price, then you’re good to do it. Now, you know, we have an investment committee that meets every week. And so we’re reviewing everything that’s on the buy list. If there’s a reason, maybe it’s just temporary for new money not to be deployed there, then it will not appear if it’s on the buy list.
Okay, all right. And do we hold that Preferred then until we see a change, like an alert comes out, to make a change to sell or such?
Yeah, so if there’s a reason to sell securities that you bought, as long as you bought them when they were on the buy list, we’ll be issuing sell alerts if something ever changes. Now, the idea with Preferreds is that we keep them for as long as we can. So the Preferreds that are on our list right now are paying very good yields, higher than what we can get on CDs right now. So the idea is that we want to keep them for as long as possible. Lots of Preferreds these days are perpetually callable, which means that they could be called in by the company at any time. And that is always a possibility as you start to— as we start to get into this decreasing interest rate environment. But, you know, if they do get called, there’s a— there’s a good possibility that you’ll get your original principal back and you would have earned interest, a good interest rate in the meantime.
So that would be a good time to use a Limit Purchase when you’re buying it and just put it in under a particular price, whatever you left in your comments.
Yeah, yeah, you could do that.
Okay, and one last question, how is the interest calculated? Say, for instance, you have a $20,000 preferred stock that you buy. When do you get your interest? How’s that calculated? So if you go— Your dividend?
Yes, so the interest is calculated based on the par value. And so there’s a stated rate, the dividend stays the same. Now the value of the preferred can change. It can go up and down. That’s why you’ll see yields change. Let’s just say that you’ve got a 5% coupon rate. It’s going to be 5% of the par value. So if you click on, if you go to the section, whatever your brokerage account that you’re using, you can usually find the security details and you can see when they pay. Most of them pay quarterly. You know, occasionally you’ll get some that pay monthly or semi-annually, but for the most part, they pay quarterly so you’ll be able to go in and you can see when the next interest payment is due.
And would you get then 5% of the par value on, say, a quarterly basis?
Yes, if that’s the details of the preferred, yes.
Okay, okay. That sounds good, thank you so much.
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