What should one invest in now?

I’ve shifted from buying equity ETFs to fixed income ETFs. Each month I do a buy in to utilize dollar cost averaging. However I’m tempted to just invest in a money market at this point. It appears we’re in the R word and I’m tired of watching how much I lose each day. What is everyone else’s strategy?

master limited parternships… that is if you like an extremely unknown/undervalued asset class that pays out a 8% dividend yield (on dividends that can never be reduced) and grows free cash flow at 9% on average.

the odd lot theory. sorry, cheap shot, but had to take it.

grover33 Wrote: ------------------------------------------------------- > the odd lot theory. sorry, cheap shot, but had to > take it. Well you do have a point in a way. I have been pretty disiplined showing no emotion for about a year and a half with my portfolio only buying in monthly. Thus far I have not sold or rebalanced. I do not feel the need to rebalance yet as I invest in index funds primarily. However, finally I’m taking a step back wondering if there is a better way to play the market right now?

I second mlpguy22. The 8% dividend is actually a “distribution” that is treated as a return of capital because, as a partnership, you get the depreciation expense from the assets in the ground. So the 8% distribution is closer to 9.4% on an after tax basis. The tax is deferred until you sell. The distributions are growing with the free cash flow growth, so 9% per ann. One problem…you get a K-1 and not a 1099, so your accountant will be pretty upset. One way around it is through a closed ended fund that provides leveraged diversification through active management and issues a 1099 instead. You can sit on this and collect the nice distribution while you wait for the market to turn around. I have been slowly accumulating a pretty decent position in these things.

JackA$$ Wrote: ------------------------------------------------------- > I second mlpguy22. > > The 8% dividend is actually a “distribution” that > is treated as a return of capital because, as a > partnership, you get the depreciation expense from > the assets in the ground. So the 8% distribution > is closer to 9.4% on an after tax basis. The tax > is deferred until you sell. The distributions are > growing with the free cash flow growth, so 9% per > ann. > > One problem…you get a K-1 and not a 1099, so > your accountant will be pretty upset. One way > around it is through a closed ended fund that > provides leveraged diversification through active > management and issues a 1099 instead. > > You can sit on this and collect the nice > distribution while you wait for the market to turn > around. > > I have been slowly accumulating a pretty decent > position in these things. Or through a dedicated hedge fund :wink:

Where in the heck do you get that their dividend can never be reduced? That is simply an outrageous claim to make. They can and will be reduced whenever the controlling partner decides.

get into gold mining stocks like AUY - good inflation hedge against the madness bennie is unleashing

virginCFAhooker Wrote: ------------------------------------------------------- > Where in the heck do you get that their dividend > can never be reduced? That is simply an > outrageous claim to make. They can and will be > reduced whenever the controlling partner decides. If you did an ounce of research on how the sector is structured, you would understand why. Edit: Obviously there is no physical/legal restriction as to why the distributions can’t be decreased. However, I estimate the odds of this happening are less than 1%.

The controlling partner can cut the distribution anytime they want without restriction. These guys are not holding back cash for growth or even maintenance capex. Is that the structure you’re talking about? If a pipe breaks… cut distribution. If revenues drop, cut distribution, etc. 1% chance? You remind me of those guys buyiing Mreits who said that debt on a person’s home is the safest debt you can hold and that the chanced of default are less than AAA bonds, with private mortgage insurance, etc. etc.

The GP has an incentive to maintain distributions and a bigger incentive to increase distributions. MLPGUY: I can’t afford their dedicated hedge fund so I invest in their closed end fund instead…

UNFI - No Brainer. Terrible operators but valuable market position and relative assets. I don’t see why this isn’t a double in 18 months.

The controlling partner hires the firm that spun off the MLP, and on the board he also sits, to do the maintenance. How’s that for incentive?

Buy large cap tech (AAPL, GOOG, etc) and forget about it for 6-8 months.

virginCFAhooker Wrote: ------------------------------------------------------- > The controlling partner hires the firm that spun > off the MLP, and on the board he also sits, to do > the maintenance. How’s that for incentive? I can’t tell if you’re joking around now. Surely you’re not as dumb as you’re making yourself out to be?

Banks and commodities (coffee, lead, sugar, soy) also selling dollar shorts. Theres not alot of opportunity out there especially in terms of growth but some value can always be found. Goog, aapl? yikes… if I am gonig tech im lookin at INTC, its cheap and growth in the mobile market should be a big driver maybe HP. GenY

Well, stagflation is the environment, so I’m exposed to gold and energy primarily, and Canada (a weakening-dollar play). So far I’m up nearly 6% from Jan 1st. But I feel I don’t have enough diversity to my macro bets. I think the large cap international exposure arguments are sensible for now, although I’m not sure about 6 months from now, and I haven’t decided how to make that play.

If you are a top-down investor then you should read alan greenspan’s book. the last 2 chapters are full of starting points for investing ideas. Also, the first half of the book is pretty exciting… It’s as much a page turner as any autobiography i’ve ever read.

we rotated into natural gas from oilsands recently: if you look at the relation between natural gas prices and oil prices, natural gas is due for a spike

I’m long natural gas since November when it traded at 1/15 the price of oil. In the last 8 years Canadian natural gas has traded at about 1/9 the price of oil (on average). Right now it’s trading at 1/12. When natural gas spikes (i’m not sure it will spike this year) it trades up to 1/5 or even 1/4 that of oil!