BDC
Belden Inc.
stock NYSE

I’ve added 1000 shares. I’ve also taken the opportunity to buy some more BDC and CEF positions that are on sale.

**TLDR**: *Note the flair, for beginners and those getting started. Just a post to share some resorces on where to find stocks.*

There are two basic approaches to look for undervalued stocks. The first approach is to find the high quality companies that you want to invest in, and put them on a watchlist and wait. The other approach is to find out stocks that have been beaten down in price, fallen out of favor and then sieve through them to find one or two that is worth investing.

The first approach is an exercise in patience and self-control, there is always a temptation to buy expensive because of FOMO. I am guilty of this. The second approach poses a unique problem for the investor, the need to sort out the value-traps from undervalued stocks that have temporary problems. The investor could also buy too early, only to watch the stock go down another 30% - 50% before eventually recovering. I have seen investors here buy the stock first because the cheap price is too irresistible without doing a proper analysis of the company.

Anyway, this post are some resources on where to find beaten down stocks.
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**1. Sectors that are oversold**
|Sectors|2026|YTD|
|:-|:-|:-|
|Energy|NYSEARCA:XLE|34.81%|
|Technology|NYSEARCA:XLK|34.79%|
|Healthcare|NYSEARCA:XLV|9.79%|
|Industrials|NYSEARCA:XLI|7.06%|
|Basic Materials|NYSEARCA:XLB|6.46%|
|Consumer Staples|NYSEARCA:XLP|5.35%|
|Real Estate|NYSEARCA:XLRE|2.38%|
|Financial Services|NYSEARCA:XLF|\-1.67%|
|Communications svs|NYSEARCA:XLC|\-4.64%|
|Consumer Discretionary|NYSEARCA:XLY|\-7.77%|
|Utilities|NYSEARCA:XLU|\-8.04%|

You can put them into a google sheet and monitor it, here is a template
[https://docs.google.com/spreadsheets/d/19lzY4CC9qHCpu7Ocy5FScGbUoZLf0Le-GYW3MU3-8Vk/edit?gid=369799323#gid=369799323](https://docs.google.com/spreadsheets/d/19lzY4CC9qHCpu7Ocy5FScGbUoZLf0Le-GYW3MU3-8Vk/edit?gid=369799323#gid=369799323)

**2. The 52 Week low lists**
[https://www.barrons.com/market-data/stocks/new-fifty-two-week-highs-lows](https://www.barrons.com/market-data/stocks/new-fifty-two-week-highs-lows)
(Best to download the NYSE and NASDAQ list onto a spreadsheet, and then remove all the ETFs, Bonds, SPACs, BDC and REITS)

**3. Stocks that have been downgraded:**
[https://www.wsj.com/market-data/stocks/upgradesdowngrades](https://www.wsj.com/market-data/stocks/upgradesdowngrades)
**4. Stocks which recently cut or suspended dividends**
[https://www.dividendstocks.com/tools/dividend-cuts/](https://www.dividendstocks.com/tools/dividend-cuts/)
**5. Screeners**
I can't comment on a good screener, perhaps someone else can.

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Finally remember this: finding a bunch of stocks from these lists is just the first step. The second and third tasks are: **How do you know they are not value traps ?** and **How do you know it won't go down another 30-50% before recovering ?**

Take a page out of Singapore, Israel, South Korea, or even China's book and have a dedicated fund for pouring venture capital into startups. The ones that exist in Canada like the BDC fund are regularly criticized for being too risk adverse.

SaaS apocalypse in the BDC universe last year brought amazing buy opportunities. I strongly prefer the internally managed: TRIN, CSWC. Those are my big positions but have smaller externally managed positions in ARCC, KBDC, MSDL (in the red), and OTF.
That makes up the BDC portion of my portfolio. Do have to monitor NAV, PIK, listen to earnings calls.
GLTA

One of my favorite BDCs. Seems as if the rest of the investors are waking up to them. They are aggressively growing but so far have managed that well. I like how they grow their capital base. Using approaches others haven’t. They have some exposure, like every other BDC in market downturn, but I think long-term they’re a great one to hold.

Your problem is that the sorts of funds that might pay that much are either over-exposed to market risk (CC funds) so the income sinks when the market sinks or has no real growth (BDCs, CEFs) so you have to back out at least enough money to cover inflation.
Let's assume you want a near 10% distribution, a CC fund like JEPI has actually gone backwards over its lifetime. So you get less income in absolute and real terms due to the NAV erosion. Newer funds haven't had a chance to do that yet, but they are still tied to the market. So if you have some vision of covering your expenses from this portfolio (as it grows) if you lose your job, then you may be disappointed. In a bear market decline (that probably aligns with an economic downturn and thus your job loss) your income will more-or-less track the underlying value of the asset down so you lose your job and your back-up plan in the same event.
BDCs and CEFs provide better market protection because they are not correlated to the broader stock market, but they still have limited economic downside protection, BDCs make their money lending to businesses that can't borrow heavily to weather a storm, so as a last resort they default and your BDC distribution falls. CEFs use leverage to amplify returns which means amplifying the downsides too. They also don't grow with inflation, so for you to lock in the growth you need to keep back 3% or $1200 out of that $3800 just to grow the fund in line with inflation so you only get $2600. However, the whole $3800 is taxable, no idea what the tax rate is on investment income in Canada, but at 20% marginal rate you lose $760 to taxes so your actual income is now $1840.
The upshot is you need to think long and hard about why you want the money, how much you'll need and when you'll need it.
In the US qualified dividends provide both protection against downside market risk, lower tax rates and if using high quality screens mitigate (but don't completely eliminate) cuts from economic downturns. Then once I plot out the path to where I want to be, a 3% yield + 6% growth and a steady stream of additional savings gets me to where I want to be in the time I expect.