Master limited partnerships (MLPs) have been the hottest sector within the U.S. energy revolution theme over the past several years.  #-ad_banner-#Units of these companies give investors exposure to the infrastructure that is driving U.S. energy independence while benefiting from volume-based contracts and stable income. Shares of the ALPS Alerian MLP Fund (NYSE: AMLP) are up nearly 5% over the past year on top of the 5.8% yield. Units of individual partnerships are soaring as the hunt for assets drives mergers and acquisitions. Units of Williams Cos. (NYSE: WMB) are up more than 75% over the past… Read More

Master limited partnerships (MLPs) have been the hottest sector within the U.S. energy revolution theme over the past several years.  #-ad_banner-#Units of these companies give investors exposure to the infrastructure that is driving U.S. energy independence while benefiting from volume-based contracts and stable income. Shares of the ALPS Alerian MLP Fund (NYSE: AMLP) are up nearly 5% over the past year on top of the 5.8% yield. Units of individual partnerships are soaring as the hunt for assets drives mergers and acquisitions. Units of Williams Cos. (NYSE: WMB) are up more than 75% over the past year on higher distribution and a merger with Access Midstream Partners (NYSE: ACMP). The United States has surpassed Saudi Arabia as the world’s largest oil producer, and the growing demand for energy transportation and storage should continue to drive distribution growth in the sector.  That is great news for unitholders — but one hidden condition in the business model for these partnerships could soon create a conflict… and take money from your pocket. As my colleague Chuck Marvin wrote recently, MLPs own pipeline and storage assets but many have no employees. A general partner (GP) manages… Read More

Previously, I told StreetAuthority readers about two of the most famous land deals in history. And while most history buffs know the story behind the Louisiana Purchase and the cession of Alaska to the United States by Russia, my point in relating those two stories was to illustrate the timeless wealth potential of real estate that still makes for a smart investment to this very day. #-ad_banner-#I recently retold the story of another famous land deal to readers of my premium income newsletter, High-Yield Investing, to further drive home the point. I’d like to share that story with you today… Read More

Previously, I told StreetAuthority readers about two of the most famous land deals in history. And while most history buffs know the story behind the Louisiana Purchase and the cession of Alaska to the United States by Russia, my point in relating those two stories was to illustrate the timeless wealth potential of real estate that still makes for a smart investment to this very day. #-ad_banner-#I recently retold the story of another famous land deal to readers of my premium income newsletter, High-Yield Investing, to further drive home the point. I’d like to share that story with you today — and tell you about how regular investors can gain exposure to some of the most valuable real estate in the world without having to risk enormous amounts of capital… Neither of these two famous land purchases I recounted earlier compares with the real estate coup that was orchestrated by a man named Peter Minuit in May 1626. Legend has it that Minuit, a representative of the Dutch West India Co., bartered some goods worth 60 Dutch guilders to local Indians in exchange for what is now the island of Manhattan. Now, this tale is part truth and part folklore. Read More

Recent claims that stocks have reached the euphoria stage probably seem a bit out of touch to a lot of investors. While the market is at record highs and the bulls have mostly had their way for five or six years, I suspect many — maybe even most — investors are anything but euphoric. #-ad_banner-#That’s because there’s nothing to warrant euphoria — and investors know it. For instance, they’re well aware that not a whole lot has been done about the issues underlying the 2008 financial crisis. And the current recovery, while certainly a step up, is a big disappointment… Read More

Recent claims that stocks have reached the euphoria stage probably seem a bit out of touch to a lot of investors. While the market is at record highs and the bulls have mostly had their way for five or six years, I suspect many — maybe even most — investors are anything but euphoric. #-ad_banner-#That’s because there’s nothing to warrant euphoria — and investors know it. For instance, they’re well aware that not a whole lot has been done about the issues underlying the 2008 financial crisis. And the current recovery, while certainly a step up, is a big disappointment because millions of people have had to settle for lower-paying jobs and an eroding standard of living. For reasons like these, most investors remain deeply skeptical of stocks and the economy, in my view. And I think most know full well this market is loaded with risk. Still, the long-term outlook for stocks is very promising because so many companies have the resources, vision and market leadership necessary to prosper on a global scale over time. The key nowadays is knowing how best to gain exposure to them while minimizing risk. Of course, you could essentially run your own mini… Read More

Stocks kicked off the third quarter with a nice rally, with the S&P 500 closing just below the much talked-about 1,975 area and the Dow Jones Industrial Average within striking distance of 17,000. Even the small caps, as measured by the Russell 2000, which lagged for most of this year, made a new all-time high.  #-ad_banner-#While the broader U.S. market is reaching some key levels and, in my opinion, could be close to a top for this current cyclical bull market, there are still some stocks out there offering solid long-side opportunities for active traders. Hard disk drive… Read More

Stocks kicked off the third quarter with a nice rally, with the S&P 500 closing just below the much talked-about 1,975 area and the Dow Jones Industrial Average within striking distance of 17,000. Even the small caps, as measured by the Russell 2000, which lagged for most of this year, made a new all-time high.  #-ad_banner-#While the broader U.S. market is reaching some key levels and, in my opinion, could be close to a top for this current cyclical bull market, there are still some stocks out there offering solid long-side opportunities for active traders. Hard disk drive and digital data storage company Seagate Technology (Nasdaq: STX) rallied 3.6% Tuesday in a technically significant move that opens it up for an additional 5% to 6% move in the near future. Considering that the market is still strongly trending higher, going long STX is technically going with the trend. But because I fear we are nearing a cyclical top, I want to validate the trade setup with more than just a good-looking chart.  Tuesday’s rally in STX was the result of positive comments from Brean Capital, which reiterated its “buy” rating and $70 price target. The firm sees “material”… Read More

The most recent Federal Reserve meeting stirred up a good bit of speculation among precious metal investors.  #-ad_banner-#While the understanding was that the central bank was on a trajectory of curtailing its bond-buying program and eventually allowing interest rates to rise, Fed Chairman Janet Yellen’s comments caused some uncertainty. Yellen indicated the Fed would likely keep rates at the current target rate between zero and 0.25% for an extended period of time after the end of the central bank’s bond-buying program. This caused precious metal prices to spike, along with share prices for precious metal miners,… Read More

The most recent Federal Reserve meeting stirred up a good bit of speculation among precious metal investors.  #-ad_banner-#While the understanding was that the central bank was on a trajectory of curtailing its bond-buying program and eventually allowing interest rates to rise, Fed Chairman Janet Yellen’s comments caused some uncertainty. Yellen indicated the Fed would likely keep rates at the current target rate between zero and 0.25% for an extended period of time after the end of the central bank’s bond-buying program. This caused precious metal prices to spike, along with share prices for precious metal miners, as continued low interest rates will be more likely to spark inflation. Since Yellen’s statement, other members of the Fed have spoken up, sending mixed messages to the market. In particular, St. Louis Fed President James Bullard said the Fed could raise rates in the first quarter of 2015. With so many different opinions on what the Fed will do, investor uncertainty is rising. This is great news for us as option sellers, because with more uncertainty comes higher option premiums. Today, we will use a put-selling strategy to benefit from the rally in gold stocks, generating an attractive level… Read More

Dividend reinvesting is a time-honored wealth-building method. It takes advantage of the stock market’s inherent upward drift, individual stock appreciation, and the incredible power of compound interest. #-ad_banner-#Today’s ultra-low interest rate environment makes developing a diversified, dividend-paying portfolio all the more crucial to accelerate your journey toward wealth. However, many investors lack the capital, time or inclination to build such a portfolio from the ground up. While far from foolproof, dividend-paying mutual funds are professionally designed and managed portfolios of dividend-yielding financial instruments. These funds can also provide investors exposure to exotic derivatives and other securities that may… Read More

Dividend reinvesting is a time-honored wealth-building method. It takes advantage of the stock market’s inherent upward drift, individual stock appreciation, and the incredible power of compound interest. #-ad_banner-#Today’s ultra-low interest rate environment makes developing a diversified, dividend-paying portfolio all the more crucial to accelerate your journey toward wealth. However, many investors lack the capital, time or inclination to build such a portfolio from the ground up. While far from foolproof, dividend-paying mutual funds are professionally designed and managed portfolios of dividend-yielding financial instruments. These funds can also provide investors exposure to exotic derivatives and other securities that may be difficult or impossible for retail investors to access. Let’s take a closer look at three of my favorite dividend-paying mutual funds. 1. Pimco Real Estate Real Return Strategy A (PETAX)​ This fund has $3.8 billion under management and yields close to 8% annually. Its five-year average return is 30.8%, and the fund is up an astounding 25.6% year to date. PETAX invests in derivatives of real estate investment trusts (REITs), as well as directly into REITs, stocks, convertible securities and exchange-traded funds (ETFs). The fund has an annual turnover of 81% and expenses of 1.14%, and Class… Read More

For the past few months, I’ve been telling readers of my High-Yield Investing newsletter about the secrets of America’s privileged. You see, wealthy folks in the U.S. invest differently than most of us. And I believe it’s worth examining their investing habits and taking a cue from their practices. #-ad_banner-#After all, America’s privileged have their wealth for a reason… It’s one thing to accumulate wealth, but they’re also incredibly successful at preserving and growing it for years on end. I personally know about the perpetual income of America’s privileged because it’s also been in my family now for three generations. Read More

For the past few months, I’ve been telling readers of my High-Yield Investing newsletter about the secrets of America’s privileged. You see, wealthy folks in the U.S. invest differently than most of us. And I believe it’s worth examining their investing habits and taking a cue from their practices. #-ad_banner-#After all, America’s privileged have their wealth for a reason… It’s one thing to accumulate wealth, but they’re also incredibly successful at preserving and growing it for years on end. I personally know about the perpetual income of America’s privileged because it’s also been in my family now for three generations. Ever since I can remember, money was never a source of worry in our family. I don’t recall hard times while growing up. I know there were recessions… and I had friends whose fathers had been laid off. But somehow, we were isolated from the same hardships. You see, my grandfather came upon the perpetual income of America’s privileged 30 years ago and it has changed the way our family has lived ever since… Now, don’t get me wrong. I’m not claiming I come from a family of America’s privileged. We’re ordinary folks. The kind you meet every day. Both… Read More

While many investment professionals are enjoying slower summer days and extended vacation time, a subset of traders are now scrambling to prepare for the biggest trade of their year. #-ad_banner-#The end of June marks an important time for many proprietary and buy-side traders, as it marks the annual rebalancing of the Russell family of indexes, known as the “Russell reconstitution.” This event is intended to shuffle the constituents of each index to reach a true representation of the current marketplace, preserving the integrity of each benchmark. Stocks are added to and removed from the current Russell indices, which… Read More

While many investment professionals are enjoying slower summer days and extended vacation time, a subset of traders are now scrambling to prepare for the biggest trade of their year. #-ad_banner-#The end of June marks an important time for many proprietary and buy-side traders, as it marks the annual rebalancing of the Russell family of indexes, known as the “Russell reconstitution.” This event is intended to shuffle the constituents of each index to reach a true representation of the current marketplace, preserving the integrity of each benchmark. Stocks are added to and removed from the current Russell indices, which creates opportunities in each individual name as they are either removed from an index (typically a negative event) or added to an index (typically positive). Emotional movements, increased volume, and large imbalances in buying and selling can create opportunities for those with the capital, speed and fortitude to react to the shifts. Making hundreds of thousands or even millions of dollars in just minutes or days is far from unheard of — hence the buzz among trading desks during this time. One of the most widely used “Russell reconstitution” strategies is to trade a basket of stocks leading up to… Read More

Business development companies (BDCs) that lend to small and mid-size businesses and pay out most of their income as dividends often find their way onto my income screen — but they’ve gotten no love from the markets this year.  #-ad_banner-#​BDC shareholders have been punished with a nearly 4% decline in prices across the category against a 6% rise in the S&P 500. Even the stock I’m going to discuss today, while it has outperformed its peer group, has had to fight an ever increasing onslaught of short sellers. Some of the recent weakness is understandable. The U.S. Read More

Business development companies (BDCs) that lend to small and mid-size businesses and pay out most of their income as dividends often find their way onto my income screen — but they’ve gotten no love from the markets this year.  #-ad_banner-#​BDC shareholders have been punished with a nearly 4% decline in prices across the category against a 6% rise in the S&P 500. Even the stock I’m going to discuss today, while it has outperformed its peer group, has had to fight an ever increasing onslaught of short sellers. Some of the recent weakness is understandable. The U.S. economy actually shrank 1% in the first quarter, and the International Monetary Fund just cut its 2014 outlook for GDP growth to 2%, saying the country would not likely return to full employment until 2017.  That doesn’t sound like the kind of environment for business development, and investors are worried that the high dividend yields offered by BDCs are unsustainable. (In a recent look at his favorite BDC, my colleague Adam Fischbaum identified yet another factor in the sector’s slump.) The problem with this thesis is that the economic environment has improved drastically over the past couple of months and… Read More

To say that the financial crisis changed the landscape of the banking industry would be a bit of an understatement.  #-ad_banner-#One of the biggest dangers to capitalism was the interruption of the investment flow that technological innovators require. As the banking behemoths teetered on the verge of collapse, capital market liquidity and business lending in the traditional banking channels pretty much evaporated.  Luckily, many business development companies (BDCs) stepped up to the plate. Basically, BDCs are simply pools of money that take investor money, lend it to businesses as some combination of debt and equity, and reward investors… Read More

To say that the financial crisis changed the landscape of the banking industry would be a bit of an understatement.  #-ad_banner-#One of the biggest dangers to capitalism was the interruption of the investment flow that technological innovators require. As the banking behemoths teetered on the verge of collapse, capital market liquidity and business lending in the traditional banking channels pretty much evaporated.  Luckily, many business development companies (BDCs) stepped up to the plate. Basically, BDCs are simply pools of money that take investor money, lend it to businesses as some combination of debt and equity, and reward investors based on the performance of the BDC’s investment portfolio.  Most of the companies that BDCs work with are what are referred to as mid-market companies: too big to be small, too small to be big. But many of these companies become bigger and often go public. That’s when the true value of the equity stake the BDC takes is unlocked. One of the more interesting names on my radar is Hercules Technology Growth Capital (NYSE: HTGC). With a market cap just shy of $1 billion, Hercules has set its sights on fast-growing technology and biotech businesses. As I’ve… Read More