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An Additional Word About Income Investments (See Total Return below)
From several email comments I have recently received, it has become apparent to me that many investors, when they think of “income investments”, only consider their yield and fail to recognize that there is often a “growth” opportunity that presents itself. In fact, growth is possible for many of the securities I recommend. One in particular is up 720% over five years. (See table below.)
That said, I now want to downplay this. In the pages in Income Planner, I have emphasized the yields that different income securities can generate and only briefly mentioned the possibility and significance of growth in the share prices as well over time. I do this because I don’t believe in making outlandish statements. I am continually bombarded with daily emails from newsletters that promise to make me 100% in 60 days or 523% in the next year and on and on and on. They suggest that you buy gold or oil or commodities, etc., etc. I’m sure that you have received some of these too if you are an investor. My only desire is to lead you to securities of solid businesses with an excellent track record of generating dividends - steady, reliable and predictable dividends! Dividends that are superior to what an investor can realize in regular passive investments.
However, by doing so, I may unfairly discourage potential investors from investing in these securities. Thus I see them search for so-called “growth” investments and subsequently take far more risks.
So now, let me show you why I am so keen on “income investments” and why you should be also. Remember, my money is in here with yours. Whether you join me or not, this is where you will find me investing.
All of the following were purchased because the dividends were so attractive at the time. Some are closed-end funds, some are REITs, some are energy trusts, some are in the food, transportation, health care sectors, etc. I have only listed a few so far, but I will continue to add to these during the course of the week. There are dozens of examples. Please keep checking back since these take me some time to calculate.
Let’s start with a fund that owns almost nothing but foreign and U.S. government bonds. This fund has been around for two decades – ACG. Then look at an energy royalty trust stock that bases its dividend on production from the north shore of Alaska - BPT. (These figures are based on a 5-year period beginning in April, 2002). These may or may not be used currently in the portfolios for Income Planner subscribers. Also, there is never any guarantee that past performance is indicative of future results.
| Name |
Symbol
/Type |
Price
Dividend
Yield as of
4/2002 |
Price
Dividend
Yield as of
5/23/2007 |
$ Gain/Share
+ Cum Dividends
Total Return
on Cost |
| _________ |
_________ |
__________ |
__________ |
________________ |
| |
|
|
|
|
Alliance
Bernstein
Income Fund |
ACG
/CEF
(Bonds) |
$ 7.98
$.0825(M)
12.4% |
$8.24
$.05
7.3% |
$.26 + $3.81
($4.07)
51% |
| |
|
|
|
|
BP Prudhoe
Bay |
BPT
/Energy Trust |
$ 11.40
Variable % |
$ 66.27
Variable % |
$54.87 + $27.16
($82.03)
720% |
Besides for these two securities there are many others that have also performed well even though the intent was to purchase these because of the dividend yield at the time.
Debt
Strategies
Fund |
DSU
/CEF
Bonds |
$6.84
$.069
12.1% |
$7.39
$.053
8.6% |
$.55 + $3.65
($4.20)
61% |
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Here are several others that have a shorter time frame than the ones above which have been around for five years or longer.
| Name |
Symbol
/Type |
Price
Dividend
Yield when
Started |
Price
Dividend
Yield as of
05/23/2007 |
$ Gain/Share
+ Cum Dividends
Total Return
on Cost |
| _______________ |
______________ |
__________ |
___________ |
_________________ |
| |
|
|
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Cohen & Steers
Realty Income |
RNP
/CEF
Real Estate |
$22.62
$.17(M)
9.0%
(06/2003) |
$28.91
$.20(M)
8.3% |
$6.29 + $11.46
($17.75)
78%
(47 Months) |
| |
|
|
|
|
| Centerplate |
CVP
/Food Services
/Entertainment
/Facilities |
$15.10
$.13(M)
10.3%
(12/2003) |
$17.38
$.13(M)
8.9%
|
$2.28 + $5.52
($7.80)
52%
(41 Months) |
| |
|
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| B&G Foods |
BGF
/Food Manuf
/Distributor |
$13.30
$.4265(Q)
12.8%
(10/2004) |
$21.26
$.4265(Q)
7.8% |
$7.96 + $4.28
($12.24)
92%
(31 Months) |
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