Saturday, December 11, 2010
All Souls: A Family Story From Southie by Michael Patirck MacDonald
This autobiographical sketch of a family's horror story in South Boston in the 1970's and 80's. I was lured into borrowing the book from our public library because I came across the name Whitey Bulger who is a former FBI informant now on the top of the FBI's most wanted list. The reviewers on Amazon gave the book a 4 and 1/2 star rating. I have read about 160 pages with few references to Bulger. I am saddened and disappointed with the book so far. The characters are very depressing. Their lives are all affected with alcohol, drugs, illegitimacy, child abuse, depression, bigotry and a delusional pride.
Wednesday, December 8, 2010
Income by Diversification
I read an article in Barrons today and it got me thinking.
"I've pretty much subscribed to the fact that you can't live off the interest any longer. Investors in retirement are going to be forced to have more volatility in their portfolios due to the fact that when interest rates go up, bond prices will fall."
http://online.barrons.com/article/SB50001424052970204374404575630983764352448.html#articleTabs_panel_article%3D2
Currently we get next to no yield from keeping our money in the money markets. Those of us who have invested in bonds have either seen them appreciate, mature or get called away. Currently, with yields so low it is foolish to invest new money in bonds, especially with the federal budget and US trade deficits. It may even be wise to sell longer maturing bonds that have appreciated in our portfolios.
There are ways to obtain a yield on our money, but there are no guarantees. If you want to stretch for yield you have to accept some risk. The key is to minimize risks.
How do you minimize risk?
Answer: Diversification, diversification, diversification.... Diversify by asset class, by location and by time of purchase.
Examples of asset classes... Dividend paying securities, Preferred Stocks, Treasury Bonds, REITS, Commodities, MLPS
Examples of location diversification... US, Canada, Far East, Latin America etc.
Examples of timing diversification... Dollar cost averaging into an investment... Make a decision to buy into various assets but do it over
time...Put $3,000 into each of the following every three months. If you invested it all at once you would increase the risk of buying something just before the market tanks. If that should happen you would still be able to purchase more later at higher yields and lower prices.
Lockheed Martin LMT... Equity... Dividend Yield = 4.34%... dividend growth 20% per year over last five years.
McDonalds MCD Equity... Dividend Yield = 3.0%... dividend growth 29.5% per year over last five years.
Intel INTC Equity... Dividend Yield = 3.0%... dividend growth = 17.61% per year over last five years.
The above are American based corporations with businesses that are growing and earning enough internationally to easily grow their earnings and dividends. Their managements are nimble enough to bob and weave through the economic minefields created by currency rate fluctuations, trade imbalances and tax changes. I may be naive but something tells me these companies can husband a portion of my nest egg better than lending it to Uncle Sam.
Below is an assortment of closed end funds and one MLP investing in different asset classes. These will make their payouts and their net asset values or NAV's will fluctuate. Higher interest rates and appreciation in the dollar will put pressure on their NAV's. Lower interest rates and a depreciating dollar will raise their NAV's.
Gabelli Gold GGN... Closed End Fund/ Commodities... Payout = 9.13%... selling at a 1% premium to NAV
Nuveen Quality Preferred Inc JTP...Preferred Stock Closed End Fund Payout = 7.96% ... selling at at 6.8% discount to NAV
ALLIANCE BERNSTEIN GLOBAL HIGH INCOME FUND INC AWF... Payout = 8.13%..... selling at a 4.18% discount to NAV
ABERDEEN ASIA PACIFIC INCOME FD INC FAX... Payout = 6.09%... selling at a 4.3% discount to NAV
Kinder Morgan Limited Energy Partners KMP... Payout... 6.29%... 7% annual payout growth over the past five years.
ING Clarion Global Real Estate IGR ... Payout = 7.01%... 8.33% discount to NAV. (The oldest/largest closed end fund investing in global REITS)
With this portfolio you would make 6.1%
You will notice that I have not listed any US Treasury Bonds. Currently the 10 year is paying only 3%.
"I've pretty much subscribed to the fact that you can't live off the interest any longer. Investors in retirement are going to be forced to have more volatility in their portfolios due to the fact that when interest rates go up, bond prices will fall."
http://online.barrons.com/article/SB50001424052970204374404575630983764352448.html#articleTabs_panel_article%3D2
Currently we get next to no yield from keeping our money in the money markets. Those of us who have invested in bonds have either seen them appreciate, mature or get called away. Currently, with yields so low it is foolish to invest new money in bonds, especially with the federal budget and US trade deficits. It may even be wise to sell longer maturing bonds that have appreciated in our portfolios.
There are ways to obtain a yield on our money, but there are no guarantees. If you want to stretch for yield you have to accept some risk. The key is to minimize risks.
How do you minimize risk?
Answer: Diversification, diversification, diversification.... Diversify by asset class, by location and by time of purchase.
Examples of asset classes... Dividend paying securities, Preferred Stocks, Treasury Bonds, REITS, Commodities, MLPS
Examples of location diversification... US, Canada, Far East, Latin America etc.
Examples of timing diversification... Dollar cost averaging into an investment... Make a decision to buy into various assets but do it over
time...Put $3,000 into each of the following every three months. If you invested it all at once you would increase the risk of buying something just before the market tanks. If that should happen you would still be able to purchase more later at higher yields and lower prices.
Lockheed Martin LMT... Equity... Dividend Yield = 4.34%... dividend growth 20% per year over last five years.
McDonalds MCD Equity... Dividend Yield = 3.0%... dividend growth 29.5% per year over last five years.
Intel INTC Equity... Dividend Yield = 3.0%... dividend growth = 17.61% per year over last five years.
The above are American based corporations with businesses that are growing and earning enough internationally to easily grow their earnings and dividends. Their managements are nimble enough to bob and weave through the economic minefields created by currency rate fluctuations, trade imbalances and tax changes. I may be naive but something tells me these companies can husband a portion of my nest egg better than lending it to Uncle Sam.
Below is an assortment of closed end funds and one MLP investing in different asset classes. These will make their payouts and their net asset values or NAV's will fluctuate. Higher interest rates and appreciation in the dollar will put pressure on their NAV's. Lower interest rates and a depreciating dollar will raise their NAV's.
Gabelli Gold GGN... Closed End Fund/ Commodities... Payout = 9.13%... selling at a 1% premium to NAV
Nuveen Quality Preferred Inc JTP...Preferred Stock Closed End Fund Payout = 7.96% ... selling at at 6.8% discount to NAV
ALLIANCE BERNSTEIN GLOBAL HIGH INCOME FUND INC AWF... Payout = 8.13%..... selling at a 4.18% discount to NAV
ABERDEEN ASIA PACIFIC INCOME FD INC FAX... Payout = 6.09%... selling at a 4.3% discount to NAV
Kinder Morgan Limited Energy Partners KMP... Payout... 6.29%... 7% annual payout growth over the past five years.
ING Clarion Global Real Estate IGR ... Payout = 7.01%... 8.33% discount to NAV. (The oldest/largest closed end fund investing in global REITS)
With this portfolio you would make 6.1%
You will notice that I have not listed any US Treasury Bonds. Currently the 10 year is paying only 3%.
The Invisible Wall by Harry Bernstein
The true story written by a 97 year old Jewish man about his early life near Manchester, England during and shortly after World War 1. It exposes the divide between Jewish and Gentiles living in the same neighborhood. It is a love story that breaks the wall between the two communities. Jewish customs and cultures are vividly depicted. The importance of one's image in the eyes of others is contrasted with the realities of physical needs. One world philosophy is contrasted with segregation within communities, nations and ethnicity.
Tuesday, November 30, 2010
Hans Keilson... Comedy In a Minor Key
A Dutch couple in their twenties harbors a Jewish man in his sixties during World War II. While hiding the Jew dies of natural causes and the couple is faced with the problem of disposing the corpse. They drag the corpse into a park at night but forget to remove an article of clothing that would link the Jew to their household..
As a result of this the couple has to go into hiding themselves and begins to experience firsthand what it is like to be confined to a safehouse in fear of discovery.
As a result of this the couple has to go into hiding themselves and begins to experience firsthand what it is like to be confined to a safehouse in fear of discovery.
Sunday, November 28, 2010
Running the Books by Avi Steinberg
The adventures of an accidental prison librarian.
A Jewish 20 year old takes a job as a prison librarian and balances his psyche with prison guards and inmates.
"After two years, I was still trying to figure out the purpose of my job and the library at large. For this I only had to take Elia's example. He wasn't merely counting the days with each book. His elegant librarianship, his hands deliberating over each title, the gentle way that he dusted and kept notes and piles, the care with which he arranged the shelves, his silence, made me appreciate how order is created: No through grand schemes-- to which I was often drawn-- but by small graceful actions, repeated often and refined with time. Page 378
A Jewish 20 year old takes a job as a prison librarian and balances his psyche with prison guards and inmates.
"After two years, I was still trying to figure out the purpose of my job and the library at large. For this I only had to take Elia's example. He wasn't merely counting the days with each book. His elegant librarianship, his hands deliberating over each title, the gentle way that he dusted and kept notes and piles, the care with which he arranged the shelves, his silence, made me appreciate how order is created: No through grand schemes-- to which I was often drawn-- but by small graceful actions, repeated often and refined with time. Page 378
Saturday, November 27, 2010
Income Ideas
Preferred Stock ETF
Utility ETF
Emerging Market Income Funds
GGNhttp://online.barrons.com/article/SB50001424052970204374404575630983764352448.html?mod=BOL_twm_ls#articleTabs_panel_article%3D1
Utility ETF
Emerging Market Income Funds
GGNhttp://online.barrons.com/article/SB50001424052970204374404575630983764352448.html?mod=BOL_twm_ls#articleTabs_panel_article%3D1
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