Nistel
7 years ago
Yeah these are quite complicated instruments with some additional risk involved, but on the other hand with these distributions, the initial investment is returned in 5 years. As long as they don't end up as MLPL, which clearly shows that there is no fully safe bet.
I have diversified risk with BDCL and CEFL as well in equal portions. All of them around 20% distribution per year (from my initial cost base).
Was looking to add SMHD and/or DVHL as well at later stage, but PPS has been bumped up quite a bit lately (BDCL also, but got that one already much earlier on lower prices).
Looking for AMZA currently as an alternative, also impressive and so far steady return ratio.
Even if it should happen that distributions will cut in half, the return is still way favorable than bank interest.
pete807
7 years ago
Thanks! I am far less educated on these instruments than the author and he was closer to the actual payout albeit slightly higher in his estimate. I shoot low so I can be positively surprised. I thought the .60s was a reasonable target and when it was nearly .70, thereby paying me over 1k, I was pleased to hit my target of owning enough to make that mark, especially since it is a month ahead of the energy MLP payouts. I use the sheltered returns to supplemental income.
In the near future I will sell some of the long held real estate that makes up my other diversification. Then dividends could in part be reinvested for the powerful compound effect. Savings in regular banks does not provide any return to us that lived under our means and saved... just like lower mortgage rates don't help us who paid ours off religiously over the course of our careers at much higher rates. Some cash is in a credit union that pays 2+ %. Paltry but better than the .1% paid elsewhere in banks.
The discussion of the health care morass was also enlightening, as we don't get real information from the media, which has become so politicized. The real problem in Washington is influence peddling, vote selling, ear marks, separate health care for politicians and their allowed insider trading. It has become a one party system. Going there should like jury duty... when your turn/duty is over (no more than 2 terms) you go home to the real world!
JMHO