“WHAT” makes Income Planner different?
There is a significant difference between Income Planner and most financial websites and newsletters. Income Planner not only selects the closed-end bond and income funds to invest in but also diversifies the money you have to invest and spreads those dollars among those various positions.
So for example, if an investor has $50,000 that he/she wishes to set aside, that money will be spread appropriately among the selected securities in order to generate the particular income stream you are interested in.
If 8.5% is the income stream you are seeking, then you select the portfolio designed to generate that return.
We have included an actual portfolio of a client with $100,000 that was created in August 2002 that was designed at the time to generate an 8.5% income stream. It did not take into consideration whether there would be growth or a loss of principal in that portfolio. It was long term money that was to generate a much higher return than what Money Market or CD’s were paying at the time which was around 1-2%. What is of particular interest is how well the portfolio has done even though the Federal Reserve has raised interest rates to 5.25%.
Also included is a more recent portfolio created in June 2006 so that you can have a feel for how the securities have performed through May 2007.
Initial Investment in August 2002 - $100,000
(Some securities have been added over time)
| Symbol |
Price on
8/02 |
Price on
5/28/07 |
Quantity |
Cost Basis
8/02 |
Value
5/28/07 |
| |
|
|
|
|
|
| ACG |
$ 8.05 |
$ 8.33 |
1410 |
$12,071 |
$11,745 |
| AMF |
4.20 |
3.83 |
1400 |
5,878 |
5,362 |
| BXL |
9.64 |
34.05 |
590 |
5,689 |
20,090 |
| CMK |
8.01 |
8.45 |
750 |
6,007 |
6,338 |
| CWF |
7.52 |
10.16 |
800 |
6,016 |
8,128 |
| DSU |
5.20 |
7.40 |
1100 |
5,715 |
8,140 |
| HPT |
32.42 |
43.28 |
120 |
3,890 |
5,194 |
| HTR |
9.88 |
8.93 |
600 |
5,929 |
5,358 |
| MRF |
8.53 |
8.18 |
700 |
5,971 |
5,726 |
| NCV |
16.84 |
16.47 |
1000 |
16,836 |
16,470 |
| NXL* |
17.77 |
33.15 |
200 |
3,555 |
6,630 |
| PPSPRB |
23.66 |
25.37 |
300 |
7,098 |
7,611 |
| PPT |
6.39 |
6.47 |
1860 |
11,878 |
12,034 |
| PWE |
36.25 |
35.28 |
400 |
14,500 |
14,112 |
| SLA |
13.83 |
12.89 |
500 |
6,915 |
6,445 |
| TMA |
22.37 |
27.35 |
400 |
8,949 |
10,940 |
| TA* |
29.30 |
39.75 |
12 |
352 |
477 |
*Note: NXL discontinued operations on 2/02/07 and paid out $33.15/share
HPT spun off TA as a separate entity, thus the 12 shares
Total Invested $127,249 $150,800
In Money Market Acct $ 20,137
TOTAL $170,937
From the initial investment of $100,000, the portfolio has grown to $170,937 or approximately 71% over a period of 58 months. Another way of looking at this is that the portfolio grew about $1,200 a month which represents an average return of around 14%. No additional money was added to the initial investment although a couple of additional securities were purchased with some of the money that accumulated in the money market account.
Initial Investment in June 2006 – based on one share of each purchased
| Symbol |
Price paid
per share |
Price as of
5/28/07 |
Gain/Loss
Per Share |
Div/Interest
Paid thru
5/28/07 |
| |
|
|
|
|
| ACG |
$ 7.52 |
$ 8.33 |
$ .81 |
$ .60 |
| AVK |
23.96 |
27.47 |
3.51 |
2.24 |
| EFT |
18.06 |
19.53 |
1.47 |
1.36 |
| ERC |
16.13 |
17.48 |
1.35 |
1.12 |
| EVV |
17.21 |
18.87 |
1.66 |
1.13 |
| FAM |
16.73 |
19.16 |
2.43 |
1.77 |
| HYV |
12.34 |
13.99 |
1.65 |
.86 |
| JPC |
12.19 |
13.74 |
1.55 |
.77 |
| NFJ |
22.25 |
25.70 |
3.45 |
1.58 |
| SRO |
15.70 |
19.25 |
3.55 |
2.33 |
Total Paid Current Value Total Gain Total Div/Int
$ 162.09 $ 183.52 $ 21.43 $ 13.76
Overall Value (Increase in Share Price + Div/Int) = $ 35.19 or 21.7%
So in the first year these positions did very well. The gain in growth of the portfolio was 13% while the dividends and interest along with some short-term and long-term gains at the end of the year returned an additional 8.5% on the purchase price. Will they do so in the future, no one knows. Will our new positions do as well, once again no one knows. This is just to show that even though these securities were purchased for their income stream, there was also growth in the portfolio itself.
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