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"I'm loving
your book! Thank you!!"
- Linda H.
As always, welcome to all of the
new CDx3 Newsletter subscribers who signed up during
May. This is your first issue of the CDx3 Newsletter, a free monthly newsletter devoted
to the interests of CDx3 Preferred Stock investors. To be sure
that you continue to receive the CDx3 Newsletter each
month, please remember to add the following email address to
your email address book safe sender list:
CDx3NotificationService@us.emaildirect.com.
I also wanted to thank all of you
who purchased Preferred Stock Investing during May; the
book continues to be ranked within the top 100 most popular
stock investing books in the U.S., out of close to 5,000
competing titles. Thank you for your interest.
The Last
Month's CDx3 Investor Results article below explains why
June will be a huge month for CDx3 Investors.
59% of CDx3 Preferred Stocks use the calendar
quarter to pay dividends to whomever owns them
on "pay day." When's pay day? It
varies throughout the month, but subscribers to
the
CDx3 Notification Service receive a calendar
each month that shows them the magic days.
And whomever owns a CDx3 Preferred Stock on that
day, gets the entire quarter's worth of
dividend income! June 11, for example, is
pay day for a whopping 22 CDx3 Preferred Stocks;
own any one of them and you get 90 days worth of
dividend cash (about $0.50 per share that you
own on that day).
This month's Special
Announcement article describes the May separation of the
Borders.com online bookstore from Amazon.com. Until a
couple of weeks ago, as weird as it sounds, Borders' online
customers were redirected to Amazon.com. When they split
during May, Preferred Stock Investing was included with
Border's initial offerings and Amazon.com immediately ran a
promotion on the book (which, as of this writing, is still
running)!
In this month's CDx3 Company Spotlight
article I provide you with an update of how the housing market
troubles are delivering piles of new customers to apartment
provider BRE Properties, Inc. BRE, an issuer of CDx3
Preferred Stock, is wondering what all the fuss is about as new
tenant applications for apartments are piling up by the truck
load.
Ever wonder how a new CDx3
Preferred Stock is created or how you would know about it if it
was? This month's CDx3 Question Of The
Month article describes the process and how you, as a CDx3
Investor, can watch it unfold - and way before your local broker
knows about it, too.
For our new readers, there is a free calculator available
to you that allows you to correctly calculate the effective annual return of
preferred stock investments. The Free Special Offer
article below provides you with a download link. Keep an eye on this monthly CDx3 Newsletter
for announcements of future promotions of CDx3 products and
services.
The Federal Reserve Board says
that they are going to return their focus to inflation
management. Does that mean that the credit crisis is
winding down? If so, how would that affect the market for CDx3
Preferred Stocks and CDx3 Investors? The Fed meets again
on June 24-25 and I will report back to you in next month's
issue of the CDx3 Newsletter.
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CDx3 Income
Engine Generates Income Every Month
June Dividend Income Flood Sets
Up July Bargain Basement Purchases
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The average annual
dividend rate being paid by new CDx3 Preferred
Stocks* reached 8.54% during May. And
Preferred Stock Investing teaches you how to
screen, buy and sell the highest quality
preferred stocks - CDx3 Preferred Stocks - in
order to earn monthly, not just
quarterly, dividend income.
Each CDx3 Preferred
Stock pays a dividend to you every quarter. But
while all dividends are paid quarterly, the
quarters are not all the same across all issues.
That is, CDx3 Preferred Stocks will pay
dividends to you using one of these three
quarterly payment schedules:
January-April-July-October
February-May-August-November
March-June-September-December
The following
chart shows the relative popularity of each of
these three quarterly dividend payment
schedules.
Looking at the
above chart, if you were to purchase 100 CDx3
Preferred Stocks randomly, you would receive
dividend income from 23 of them each January,
April, July and October; another 18 of them
would pay you each February, May, August and
November; and during March, June, September and
December you would receive a cash payment from
59 of them. So, because of the
variation in the popularity of quarterly payment
schedules, CDx3 Investors end up receiving
dividend income every month.
How Long Does It Take? Using this same math, we can
calculate how many CDx3 Preferred Stocks you
would have to own (assuming random purchases)
before your CDx3 Portfolio was producing
dividend income for you every month; that is,
before you had at least one CDx3 Preferred Stock
paying a dividend to you in every month.
The answer is six;
when you own six CDx3 Preferred Stocks (again,
assuming random purchases), your CDx3 Portfolio
will provide you with one dividend payment in
January, April, July and October; another single
dividend payment during the months of February,
May, August and November; and four
dividend payments during the remaining months
of March, June, September and December (the
months that end calendar quarters). |
CDx3 Investors
usually add about one CDx3 Preferred Stock to
their CDx3 Portfolio each month; doing so would
provide you with a CDx3 Portfolio of six CDx3
Preferred Stocks in about six months. At that
time, CDx3 Investors tend to start seeing their
CDx3 Portfolio generate dividend income every
month.
June Will Be A Big
Month: With June being such a huge
dividend income month, subscribers to the
CDx3
Notification Service are
already anticipating using the cash to add to
their CDx3 Portfolios during July at bargain
basement prices.
Each month,
subscribers to the
CDx3 Notification Service
receive the "CDx3 Bargain Table" (see
sample)
that provides a list of CDx3 Preferred Stocks
that are candidates for purchase at a point in
time when their market price tends to be at a
low point, significantly boosting yields. For
example, the average market price of the CDx3
Preferred Stocks seen on the June CDx3 Bargain
Table that subscribers to the
CDx3 Notification
Service just received is $20.48 per share (well
below the $25 par value), producing an average
yield of about 9%.
Because 59% of the
CDx3 Preferred Stocks held by CDx3 Investors are
going to produce dividend income this month,
many CDx3 Investors will be shopping for new
purchases in early July. And the July CDx3
Bargain Table is going to identify over 20 great
CDx3 Preferred Stocks when subscribers to the
CDx3 Notification Service receive the table
later this month.
If you would like
to start building your CDx3 Portfolio, June is a
GREAT month to do so by subscribing to the
CDx3
Notification Service. Start building your
portfolio of the highest quality* preferred
stocks available. And remember - we do the
work for you.
*How can I say that CDx3
Preferred Stocks are the highest quality?
Regular preferred stocks have to meet each of
the ten CDx3 Selection Criteria (Preferred
Stock Investing, Chapter 1) in order to
qualify as "CDx3 Preferred Stocks." Here
are just three of the ten CDx3 Selection
Criteria that regular preferred stocks have to
meet in order to be considered CDx3 Preferred
Stocks; CDx3 Preferred Stocks must:
1. be rated
"investment grade" by Moodys;
2. be issued by a
company with a perfect record of never having
suspended a dividend on a preferred stock; and
3. have
the "cumulative" dividend requirement,
which means that in the unlikely event that the
issuing company misses a dividend payment to you
(which I have never seen happen with a CDx3
Preferred Stock), they have to make it up to you
later; they still owe you the money. |
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Borders Splits From Amazon, Includes Preferred
Stock Investing
Amazon Runs PSI Promotion,
Knocks $2 Off Of Retail Price
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When Jeff Bezos founded Amazon.com in 1995, he caught
the world's top book retailers - Barnes & Noble and
Borders - flatfooted. Both of the retailing giants
had enjoyed huge customer loyalty, but completely missed
what online retailing would mean for the book business.
Bezos has since grown Amazon into a $33 billion giant,
while others have played catch up or given up entirely.
Barnes & Noble
launched its
bn.com site to help stop the flow of its customer
base over to Amazon. It only worked to a limited degree,
as Amazon substantially outperforms bn.com on almost
every metric. |
Borders, years ago,
realized that it was too late to catch Amazon and
entered into a "no other choice" partnering deal with
Bezos. If you pointed your web browser to
www.borders.com,
you would be redirected to Amazon (if you can't beat 'em,
join 'em). How this encourages Borders customer
loyalty and brand recognition is unclear, but Borders
felt it was important to have an online
presence, even if it was someone else's presence.
A couple of weeks
ago, that all changed. Borders split with Amazon and
launched their own web site at
www.borders.com,
complete with free shipping for orders over $25, just
like Amazon.
And I'm happy to announce
that Preferred Stock Investing is included in
Borders' initial offerings. You can see Preferred Stock
Investing at the new Borders.com web site by
clicking here.
And not to be outdone,
Amazon promptly launched a promotion for Preferred
Stock Investing, now (at this writing) offering the
book for $2 off of its suggested retail price.
Click here to see Preferred Stock Investing
at Amazon. |
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Who Are
These Companies That Issue CDx3 Preferred
Stocks?
BRE Properties (NYSE:
BRE)
An increase in home vacancy
generally means a decrease in
apartment vacancy, and vice
versa. According to the U.S.
Census Bureau, 2.9% of homes are
currently vacant. This is the
highest home vacancy rate in
about 20 years. But just because
a home becomes vacant doesn't
mean that its prior occupant no
longer needs a place to sleep
every night.
BRE Properties, Inc., a $2.5
billion San Francisco-based
apartment real estate investment
trust (REIT) founded in 1970,
develops or acquires and manages
apartment communities throughout
California, Arizona, Washington
and Colorado. As of March 31,
2008, BRE owned, either directly
or via join venture, 23,749,174
rentable square feet over 26,760 individual units.
REITs are companies that are not
required to pay corporate income
tax, as long as they distribute
at least 90% of their taxable
revenue to the company's
shareholders; Uncle Sam then
takes his part from
the shareholders, rather than
from the company.
While the current credit crisis
has many in the real estate
business cutting back, BRE, as a
provider of apartments, finds
itself wondering what all the
fuss is about. In the
November 2007 issue of the
CDx3 Newsletter, I led a
similar story with
"Looking for an apartment? If
so, you're about to have plenty
of company." How's it gone
for BRE since then?
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In
their May 31, 2008 Stock Report,
Standard & Poor's points out
that "the S&P Residential REIT
Index rebounded 13.6% during the
first four months of 2008, after
declining 27.9% for 2007."
As
prior homeowners caught by the
subprime squeeze now look for
apartments, occupancy rates at
BRE properties have gone up
across the board. The same
S&P Stock Report goes on to say
"The downturn in the domestic
housing market has provided some
positive benefit for apartment
operators. We think renters are
staying put longer, holding off
on new home purchases and
contributing to a generally high
level of occupancy."
Such an outlook caused BMO
Capital Markets to issue an
upgrade of BRE last March (to
Market Perform from
Underperform).
While there is still a ways to
go before we will see recovery
in the U.S. housing market,
apartment providers, such as BRE
Properties, are enjoying a
silver lining of sorts to this
"credit crisis." Check out
the current list of BRE
properties
here.
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How
is a new CDx3 Preferred Stock
created? What's the process? -
Barbara T.
Subscribers to the
CDx3
Notification Service are aware
of new preferred stocks long
before your local broker knows
about them. With a few
exceptions, new preferred stocks
go through a three step process
when they are issued to the
marketplace:
1. obtain regulatory approval
and credit agency rating; then
2. begin public trading on the
Over-The-Counter (OTC) stock
exchange, usually at very
favorable pricing, under a
temporary trading symbol; then
3. transfer trading to the New
York Stock Exchange (NYSE) under
the permanent trading symbol
once approved by the NYSE.
To the extent that your local
broker becomes aware of a new
preferred stock at all, it is
generally not until step 3 -
transfer to the NYSE. And
even at that, your local broker
is often only made aware of
new preferreds if their
corporate
office was involved in
the introduction process (underwriting) to
begin with.
The
CDx3 Notification Service is
the most comprehensive service
for preferred stock investors -
by far - and is the only
notification service that makes
subscribers aware of new
preferred stocks as they travel
through these three steps.
After we filter out preferred
stocks that do not meet the ten
CDx3 Selection Criteria (Preferred
Stock Investing, Chapter 1),
subscribers to the
CDx3
Notification Service receive
"CDx3 Buyer's Notification"
email messages as the new issue
heads to the open market.
"Just
Announced:"
Depending upon the timeliness of
the various regulatory review
processes, subscribers can
receive a CDx3 Buyer’s
Notification message before a new issue
starts trading on the OTC stock
exchange (i.e.
the temporary OTC symbol has not
yet been assigned). The Just
Announced CDx3 Buyer's
Notification email message makes
subscribers aware that a new
CDx3 Preferred Stock is about to
start trading on the OTC stock
exchange.
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"Now Trading":
Subscribers also receive a CDx3
Buyer's Notification message once a new
CDx3 Preferred Stock begins trading on
the OTC stock exchange under its
temporary trading symbol. The new CDx3
Preferred Stock will trade on the OTC
stock exchange under this temporary
symbol until the NYSE approaches its
trading application (which usually takes
about two weeks).
"X Becomes Y:"
When the NYSE approves the trading
application and assigns a permanent
trading symbol to the new CDx3 Preferred
Stock, subscribers receive another CDx3
Buyer's Notification email message.
Subscribers receive this CDx3 Buyer’s
Notification message the same day that
the issue starts trading on the NYSE
(usually within minutes). Any
shares that had been purchased under the
temporary OTC trading symbol are
automatically transferred over to the
new NYSE trading symbol by your broker.
We use about six different data sources
in order to confirm the information that
subscribers see on these CDx3 Buyer’s
Notification messages.
Having said that, there can still be
anomalies. For example, not all brokers
are created equal. Sometimes it can take
broker systems some time to populate
with information for new NYSE issues. I
have seen cases where TDAmeritrade will
give me a NYSE quote on a new issue, but
e*Trade and Schwab will return an
“invalid symbol” error for a day or two.
The
CDx3 Notification Service is the
only service available that allows you
to see the migration of a new preferred
stock from
the OTC to the NYSE when it happens.
 You
can learn more about how new preferred
stocks are issued onto the
Over-The-Counter stock exchange by
reading the CDx3 Special Report "Trading
Over-The-Counter" (sample
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purchase $4.95,
free to CDx3 Notification Service
subscribers).
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Free CDx3
Special Report Also Has Free Companion Excel
Calculator
See How To Correctly Calculate Your
Effective Annual Return - FREE
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The Preferred Stock Investing Reader's Forum provides a
free special
Excel spreadsheet calculator that you can use to
calculate the effective annual return (EAR) of your
preferred stock investments. The calculator allows
you to just plug in a few parameters from your preferred
stock (such as purchase date, purchase price, sell
price, etc.) and see what your effective annual return
really is, or will be if you sell.
 When
you initially download the EAR calculator, it is set up
using the Series A CDx3 Preferred Stock from Dominion
Re-sources (D-A) as an example. This is the same CDx3
Preferred Stock that is used as an example through-out the CDx3
Special Report titled "Calculating Your Rate Of
Return."
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As a
recipient of this monthly CDx3 Newsletter,
you are entitled to a FREE copy of "Calculating Your
Rate Of Return." So, get
them both - FREE - and use them together to
learn how to correctly calculate your rate
of return on this type of investment. To download your free copy
of Calculating Your Rate Of Return, just click on
the following email address:
CDx3Newsletter@PreferredStockInvesting.com.
No need to type anything in the body of the
message, just click the Send button.
You will receive an auto-reply email message
with download instructions for your free
CDx3 Special Report.
To see the entire library of useful and
educational CDx3 Special Reports, including
three sample pages from each one,
click here.
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Federal Reserve Returns To Inflation Busting
CDx3 Investors Look Forward To "Seller's Market"
According to the FDIC, the original 2.5 million
adjustable subprime mortgages that triggered the
current "credit crisis" will finally wash
through the financial system by the end of next
month. With that part of the problem
behind us, the Federal Reserve Board is
signaling that they are likely to return their
focus to inflation management. The Fed has
a two-day meeting scheduled for June 24-25, but
is unlikely to announce any major interest rate
changes or other "liquidity-oriented" policy
adjustments. Unless something major
requires it to do so, the Fed, while still
paying very close attention, is essentially done
force-feeding our financial markets (at least
for the time being).
Not that there is no more blood to be spilled; we're
a ways away from being out of this. Market
equilibrium will not return until the availability
of credit - for consumers, home buyers, builders,
etc. - stabilizes and confidence in the system's
ability to meet the demands placed upon it is
restored. Plus, there is still more
consolidation to be done (bigger, faster swimming
banks eating smaller, slower swimming banks).
For CDx3 Investors, this credit crisis has pushed
the annual dividend rate being paid by newly issued
CDx3 Preferred Stocks all the way to 8.875%, with
the current average at 8.5%. That's up from
about 6.75% just twelve months ago as big banks have
had to "sweeten the deal" in order to attract
investor cash.
Doing so has created a spectacular "buyer's market"
for CDx3 Preferred Stocks - relatively high dividend
rates at relatively low market prices, sending many
yields well over 10%. Once banks stop bidding
up the dividend rates for new CDx3 Preferred Stocks,
the overall average dividend rate will begin to fall
back.
What do you think is likely to happen to the market
price of the 8+% dividend payers that CDx3 Investors
are buying today when the average new CDx3 Preferred
Stock issue is paying, say, 7%? Once this
credit crisis plays through, dividend rates will
fall and market prices of previously issued CDx3
Preferred Stocks that pay higher rates will tend to
rise accordingly. CDx3 Investors will return
to the "seller's market" where they will enjoy
substantial capital gain opportunities by selling
the high dividend payers that they are purchasing
for bargain basement prices today.
As the Fed turns its attention toward inflation
management, will June be the month of transition for
CDx3 Preferred Stocks, where we see dividend rates
level off and market prices start back up? I
am anxious to report back to you in next month's
issue of the CDx3 Newsletter.
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Remember, I'm not a stock broker;
I'm not trying to sell preferred
stocks to you; and I don't sell
investment advice. I'm an
investment researcher with an
economics and statistics
background who has developed a
simple way to earn a respectable
return at very low risk. And I've
written it down in
Preferred Stock Investing.
I'm hopeful that you find these
monthly CDx3
Newsletters interesting, and
will consider learning more by
purchasing my book, Preferred
Stock Investing or by subscribing to
the
CDx3 Notification Service.
Please
take a look at
www.PreferredStockInvesting.com. And don't forget
about my
FREE SPECIAL OFFER.
Know
someone who might be interested in simple,
low-risk investing for non-investment
experts? Have them send an email
message to
CDx3Newsletter@PreferredStockInvesting.com and
they will automatically
begin receiving this monthly CDx3
Newsletter
next month (plus a
CDx3 Special Report) - all FREE.
Then they can make up their own mind.
Many Happy Returns,
Doug K. Le Du
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