A New Fund and Suggested Allocation for the Model Fund Portfolio
Posted on September 5, 2013 | AAII Journal
CGM Realty Fund (CGMRX) is being replaced, and a new allocation is suggested for those preferring a more conservative portfolio.
Why We Don’t Rebalance
Posted on August 8, 2013 | AAII Journal
A combination of risk-averse and risk-seeking behaviors as well as fears about backlash stop investors from rebalancing.
Taking a Qualitative Look at a Prospective Stock’s Figures
Posted on August 7, 2013 | AAII Journal
A qualitative assessment of financial data reveals more about a company than what can be gleaned from the financial statements alone.
Using Seasonal and Cyclical Stock Market Patterns
Posted on August 5, 2013 | AAII Journal
Presidential terms, the calendar month and a basket of January indicators give insight into market direction.
Should You Maintain an Allocation to Bonds When Current Rates Are Low?
Posted on August 4, 2013 | AAII Journal
Historical data shows an advantage to keeping bonds in a diversified portfolio even when interest rates rise sharply.
The Top Mutual Funds Over Five Years: The Bear’s Claw Marks Remain
Posted on August 2, 2013 | AAII Journal
The losses of the last bear market were so severe, they continue to impact the five-year annualized rates of returns for stock funds.
Dividend Safety Signs and Warning Flags
Posted on July 18, 2013 | AAII Journal
Many investors have sought shelter from the stock market storm in more mature dividend-paying companies, since the income from these firms provides at least some positive return in an otherwise bleak environment.
But the economic downturn has tested even the most mature and stable firms, with some forced to cut dividend payments. Others have managed to maintain current levels for the time being, but could be forced to make cuts in the future.
What signs can you look for that indicate the safety of a company’s dividend payment stream?
Investors in dividend-paying stocks typically seek stocks that are paying steadily increasing levels of dividend income, and have the cash flow and financial resources to continue to pay the dividends. There are a number of financial ratios and indicators you can use to evaluate this; the most common are listed below.
Chasing Dividend Yield for Income
Posted on June 25, 2013 | AAII Journal
Declines in overall yields may result in dividend strategies failing to provide adequate levels of income for retirees.
A Key to a Lasting Retirement Portfolio
Posted on June 10, 2013 | AAII Journal
Staying within or below a 4% to 5% withdrawal rate (adjusted annually for inflation) will decrease your risk of outliving your retirement savings.
Master Limited Partnerships: Income from a Unique Structure and Industry
Posted on May 22, 2013 | AAII Journal
MLPs are pass-through entities and have been able to pay consistent distributions due to steady demand and federally regulated prices.
Kenny Feng is president and CEO of Alerian. I spoke with him about master limited partnerships and the Alerian MLP exchange-traded fund (AMLP), which is held in our Model ETF Portfolio.
Charles Rotblut (CR): Could you explain what a master limited partnership (MLP) is and how it differs from a traditional corporation?
Kenny Feng (KF): Sure. Energy master limited partnerships are engaged in four primary businesses, which are the exploration and production, transportation, storage and processing of natural resources and minerals. By confining themselves to these specific activities, MLPs are not subject to entity-level taxation as a traditional C-corporation would be. They are, however, subject to the same reporting requirements (annual reports, filing 10-Ks, filing 10-Qs, filing notices of material changes and complying with the Sarbanes-Oxley act) as publicly traded corporations. It is also worth mentioning that they trade on the public exchanges; about two-thirds of the energy MLPs trade on the New York Stock Exchange and a vast majority of the remaining one-third trade on the NASDAQ.
CR: And with their structure, the earnings flow through, correct?
KF: Exactly. They are pass-through entities.
CR: I know that creates different tax issues for investors than investing in a traditional corporation.
KF: Exactly. If you were to invest in IBM (IBM) or any other publicly traded corporation that pays a dividend, you would get a Form 1099, and you would report the payments as dividend income.