November 2016 Newsletter to Clients

Enjoy this month’s edition that features a holiday open house invitation, update on the economy and stock markets in addition to highlights on an important announcement by BlackRock.

BlackRock Advisors decided too many of its income oriented closed-end funds are selling at a discount to their book value. Let us start with a short lesson. There are two types of investment vehicles known as mutual funds: Open-end funds and Closed-end funds. Open-end funds sell at net asset (book) value – the price of the total investments within them, and are priced daily after the market closes. By contrast, Closed-end funds trade in the marketplace, usually but not exclusively on the New York Stock Exchange. Purchasers and sellers (investors like us) may pay more or less than the book value based on the price in the market at that time. The discount or premium depends on collective investor sentiment about the particular fund.

BlackRock Floating Rate Income Trust (BGT) and BlackRock Floating Rate Income Strategies Fund, Inc. (FRA) are two of the twenty (20) closed-end funds which are targeted for repurchase. The Boards of Directors/Trustees have authorized open market share repurchase programs for each Fund. Funds may buy up to 5% of its outstanding shares between now and November 30, 2017. Our two funds, BGT & FRA are selling, at this writing, at discounts of 5.7% and 7.5% respectively. Rising interest rates usually result in lower bond prices. Over the past nine months short term interest rates have trended higher due to the generally accepted assumption that the Federal Reserve Bank will increase the bank’s key rate another quarter of a point in December. What most investors don’t understand is that as short term rates increase the amount of income received by mutual funds which own floating rate bank loans and bonds will also increase. The rising LIBOR is suggestive and predictive of an increase. That is why we want to retain them among our investments.

Many economists and market watchers view our economy as strong and improving. The stock market seems to predict more robust economic activity in 2017 and later.

Holiday Open House: Moneywatch Advisors will host a Holiday Open House on Wednesday, December 14th at our office building on Walton Avenue, all are welcome and we hope to see you.

Client Alert:  Identity Theft, Data Breaches and Your Investment Accounts

Awareness of potential identity theft or data breaches is essential to safeguard personal financial information. Important steps offered by the SEC’s Office of Investor Education and Advocacy:

• Contact your investment firm and other financial institutions immediately.
• Change your online account passwords.
• Consider closing compromised accounts.
• Activate two-step verification, if available.
• Monitor your investment accounts for suspicious activity.
• Place a fraud alert on your credit file.
• Monitor you credit reports.
• Consider creating and Identity Theft Report.

Thank you for your continuing confidence.

Past performance is no guarantee of future results. The opinions expressed are those of Moneywatch Advisors, Inc. and are no guarantee of the future performance of any particular fund. This information is for educational purposes only and is not intended as investment advice. Please consult your financial advisor for more detailed information or for advice regarding your individual situation.​​