Welcome to Dividend Income Investor
October 19, 2016
Mark Twain said, “If you don’t read the papers you’re uninformed. If you do read them, you’re misinformed.”
Are they going to raise interest rates in the next few months?? In looking at the charts the smart money seems to think so. Maybe they “know” that the Fed is finally going to raise rates after many, many years of maintaining low rates.
The smartest of the financial gurus that we follow feel rates cannot possibly go higher…stating that this BAD economy does NOT support rising rates. Regardless of what happens, the fact remains that our Core Portfolio is interest rate sensitive and we have to follow rates closely.
We have been selling positions over the last week due to declining momentum–caused possibly by fears of a rate increase. Some of the other sold positions were priced so high that we decided to take profits.
Bottom Line: If and when rates go higher, we will be selling Core Portfolio positions as we are NOT going to get caught in declining investments like our experience in the 2008/09 travesty. In the meantime we are looking for NON interest rate sensitive holdings to add to the Core Portfolio.
We continue holding the energy positions in addition to the “data center” technology oriented individual corporate bonds that have been in the Core Portfolio for a long time.
Having mentioned energy, we are BUYING AMLP Alerian MLP ETF: a position involved in the transport, storage and processing of energy commodities.
AMLP is dishing up a yield of 8.5%
This Index, comprised of 25 energy infrastructure Master Limited Partnerships (MLPs), is a liquid, midstream-focused subset of the Alerian MLP Index. The index, whose constituents earn the majority of their cash flow from the transportation, storage, and processing of energy commodities, provides investors with an unbiased benchmark for the infrastructure component of this asset class.
The Fund seeks investment results that correspond (before fees and expenses) generally to the price and yield performance of the Alerian MLP Infrastructure Index. It employs a passive management or indexing – investment approach designed to track the performance of the Index.