Prospect Capital Removed From the SMA Portfolio

By on November 17, 2017

Prospect CapitalI decided to sell Prospect Capital (PSEC) since it has rebounded 25% from lows reached earlier this month. PSEC is a Business Development Company (BDC) plagued by high management fees, falling net interest income, declining book value, and dividend cuts. It was purchased for the SMA Portfolio in February 2014. The total return over this timeframe was -3.5%, or a little more than a loss of one percent annually. I may reconsider it for purchase in the future as it can be a worthwhile trading vehicle, but as a long-term holding there are just too many negatives for this particular entity. PSEC was sold today at $6.85.

Disclaimer: It is very difficult to outperform a buy and hold strategy. Many investors have found themselves well served over long time horizons by investing regularly in a diversified portfolio of stocks or low cost, broadly diversified indexed stock funds. Information presented is based on analysis of past data and assessments by the Tactical Timing System model. Future performance may not reflect past performance. Profitable trades are not guaranteed. No system or methodology ensures stock market profits. Although accuracy is strived for, no guarantee is made regarding the accuracy of data presented.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>