Another bumpy day, although the bumps just slipped into negative territory & advance/decline line is about 3-1 for the negatives. News is on the negative side. General Electric Asset Management bond fund suffered losses in mortgage-backed securities, what's new? Barclays Group took a $2.7 charge. JC Penney reported a down quarter & cut it's fourth quarter outlook. Dow is down about 47 & NAZ another 1/2%.
This is good time to mention MLPs (master limited partnerships), a recent favorite of mine. This group has emerged in the last 10 years or so to medium size. The businesses sell units (not shares) and pay distributions. Their distributions provide a good yield (around 6-7%) & are tax free. However, they also represent tax hassle. Income, 10-20% of the distribution, is reported on a K-1 form in March (i.e. late) plus income is divided among the states where it does business. Computer tax packages can handle the numbers, but it does add complications to taxes. As partnerships, they are generally not allowed in IRSs & other retirement accounts. For the venturesome, seeking income & growth, these may be interesting.
I started learning about these about 1/2 a year ago, & like them. Their index is the Alerian MLP index which is 299, up from 100 at the end of 1996. That's a nice run. The comparable index including distributions is about 650, even nicer. There is a lot to learn about these investments, a good place to start is search for:
master limited partnerships primer
A few brokerage firms have excellent 50+ page reports. There is a lot to learn about this area, I will continue discussing it in the future. This read is an alternative to more & more writedowns.
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