Market Meltdown Update

2 Sales, 1 Buy, 1 Increase

Author

Armchair Income
March 12, 2025

A lot of market drama so I thought an update is in order. The weighted average yield of the portfolio is currently 11.7%.

One of the benefits of income investing is that you don’t have to sell investments to pay the bills. Selling overpriced stocks is easy, selling them when they’re bleeding…not as easy. Despite the current market volatility, I’m not making any major moves (like going to cash). With the exception of a few trades below, I’ll continue as usual…using unspent distributions to buy whatever is the best income opportunity at the time. Most distributions arrive at the end of the month, and it looks like there will be a buffet of opportunities to choose from.

Business Development Companies (BDCs)

These haven’t fallen as far as the S&P 500, with the exception of HTGC, which was trading at nosebleed prices (1.86 x Book Value). It’s an excellent BDC, but the price action is wild. If it gets cheap enough, I’ll happily buy more. Same goes for MAIN. 

As explained in a recent video, there are a handful of BDCs in the portfolio that have demonstrated over the past 10 years, the ability to navigate all interest rate conditions, while delivering consistent income and long term growth. I continue to like this asset class, and will be looking to take advantage of deals, especially for the 5 mentioned in the video: MAIN, HTGC, CSWC, FDUS, and ARCC.

With the exception of HTGC, BDC’s from the portfolio fell less than the S&P 500.

Markets are Down: But not Everything

Covered Call Index funds are great, most of the time. However, it's important to diversify beyond them, even if the returns aren’t as good. Outside of the major indexes, investments from the portfolio that have held up well over the past month are listed below (a video about these coming soon).

Healthcare: THQ

Credit: PDI, EIC, GOF, FSCO, DSL

Preferred Stocks: AGNCN, EICC, NLY-PF

Infrastructure: ASGI

Real Estate: RLTY (Adding IYRI)

Armchair Income, and this newsletter are not political. However, I will address Government policy to the extent it affects income investing. The President has noticeably ceased making statements about the stock market being a measure of his effectiveness. More importantly, the Secretary of the Treasury, Scott Bessent, publicly stated that he, and the President, are in agreement that their policies will be directed at lowering the yield on the 10 Year Treasury. 

I don’t know if Bessent will be successful in lowering the 10 year yield, but his intention is worth noting. The conclusions I draw from this are: 1/ Government policies are not as focused on boosting stock prices in the near term, as they were during the President’s first administration. 2/ If the Government can reduce the yield on the 10 Year Treasury, it would be a positive for the price of fixed rate credit investments (eg. corporate bonds, fixed rate preferred shares). 

I don’t plan to make radical changes to the portfolio, but maintaining diversification beyond the S&P 500 and NASDAQ 100 continues to make sense.

Trades

Sold GPIX (3% Allocation)

Nothing wrong with this fund, but I’m looking to reduce exposure to the S&P 500, and this ETF is more price sensitive than SPYI. It tends to do best during a bullish market.

Sold SVOL (0.85% Allocation)

I’ve been steadily reducing exposure to this ETF since the last election, because it does poorly during periods of high volatility. My expectation was that volatility would increase with the new administration and sure enough…it has. Going forward, I expect the volatility to continue, so I’m exiting this last…small…position in SVOL.

Bought: IYRI (1.85% Allocation)

This is a relatively new ETF from NEOS and is based on the Dow Jones U.S. Real Estate Capped Index. I like most of the holdings in the index, I like NEOS’ approach to actively managing options for consistent income, and the market has been liking the real estate sector recently. I will invite Garrett from NEOS onto the channel to explain the fund strategy (probably late March, or some time in April).

JEPI: Increased Allocation from 0.57% to 2.58%

My allocation to JEPI during the bull market of the past few years has been small. It is designed to produce less volatility than the S&P 500, so it does best during bear markets. The yield has been in the low 7’s. It recently bumped up to the mid 7’s. That’s about 1.3% less than GPIX. If I’m wrong about switching GPIX to JEPI, that 1.3% difference is a small price to pay.

If you want to get up to speed on JEPI, I enjoyed this recent update by Quad 7 Capital: Link to JEPI article.

I used to scroll through Schwab, Etrade, and Interactive Brokers portfolio screens, and then try to figure out who was going to pay me what, and when. Much easier to have 1 clean dashboard that’s designed for income investors.

I usually sort by yield and price, to get a quick overview of how the market is affecting my portfolio. Occasionally they have sales, and the current one ends March 12 (today). Click here for the discount.

Recent Videos

(Published Since the Last Edition of Armchair Insider)

Armchair Insider Portfolio

Armchair Insider Portfolio, March 12, 2025 - Snowball Holdings.csv (1).pdf930.34 KB • PDF File

(*If you have difficulty opening the portfolio directly from your email, try opening the newsletter in a browser, then opening the portfolio)

Basic Resources

Advanced Resources

Thanks for stopping by…see you in the next issue!

Regards,

Armchair Income

Disclaimer: I’m sharing information about my investments, but I’m not making any recommendations to you to buy or sell anything. Each investor has their own goals, risk tolerance, and timeline, and must make their own investments decisions…then take responsibility for those decisions. I’m not a financial advisor, and I don’t advise anybody regarding their investments. If the information in this newsletter is useful or helpful in any way, then my goal is achieved :) Some of the links provided above may be associated with affiliate programs. If so, use of those links will not incur any additional cost to the user (and will, in many cases, provide a benefit to the user) and may result in a referral commission to this newsletter.