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--- sniffing_out_high_yields_may_2008 [2008/05/27 21:45] – created tomgee
+++ sniffing_out_high_yields_may_2008 [2008/05/27 21:48] (current) – tomgee
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 The strategy here is to not buy just one of these investments. As always, diversify. I would also highly recommend that you talk to your own financial advisor, and you should have a financial advisor. He or she may have his or her own ideas. But this is a start towards a Stein/DeMuth High income portfolio you might like.
+==== Investor Village ====
+ Some suggestions for income investing when interest rates are low.......or high:
+.  Don't buy CDs from your local bank.  Most of the brokerage firms offer CDs from around the country and they usually have higher yields than most "local" CDs.  Plus you're not using gas!
+.  If your portfolio is 100% fixed income, inflation will kill you over a period of years.  You need stocks and funds which have a history of raising their dividends.  Note:  The payments on closed end funds are distributions, not dividends.  For example, BDV, mentioned in the article, has a distribution rate which is much higher than the dividends of the underlying stocks.  In other words, it's paying the distributions from principal.  This is why it's constantly going down. See chart at http://www.etfconnect.com, the best url for ETF information.  How do you evaluate the distributions to see if they are being paid out of dividend income?  Usually, you can take the top 10 holdings and get the individual yields, then compare that to the distribution rate.
+.  Don't stretch looking for yield.  Jim Rogers says, "Never, never, never buy a stock just for the dividend."
+.  Identify the sectors of high yielding stocks, then look for the best stocks in that universe or buy ETFs which own them and have the distributions being paid from the dividends.  The three highest yielding area now are utilities, oil and gas master limited partnerships and real estate investment trusts.  In the current market, it's probably not a good idea to have any REITs.  Oil and gas limited partnerships are complicated; it's best to buy the ETFs that own them AND the distributions from the ETFs are dividends within the meaning of the tax laws, thus they don't have any adverse tax consequences that owning the individual partnerships do.  If you go to the above url and enter "energy" in the search box, the partnership ETFs are the first group.
+.  On the fixed income of your portfolio, ladder the maturities of the individual CDs, bonds and preferreds.  Don't buy bond funds that have no ending date; you loose the advantage of the bonds going back to par at maturity.  For preferreds, a great url is http://www.quantumonline.com. For current new bond rates, the best url is http://www.internotes.com. You may want to consider staying away from financial company bonds until the dust settles.
+.  Have a plan and stick to it.
+nice comments.
+i add the following to your point #2--go to the following site to get "income only yield" and "distribution yield".
+Of course this does not mean they are not "earning" enough to support the distribution through income, cap gains, etc, but it does tell you the portion applicable to "income".
+Your point # 4--need to add Ocean shipping to this list--as a group, they pay higher dividends now than anything else i know.
+good luck
+oops the www for comment #2 is
+http://www.closed-endfunds.com/FundSelector/FundDetail.fs?ID=93362