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Author: LeKitKat Big gold star, 5000 posts Top Favorite Fools Top Recommended Fools Feste Award Nominee! Feste Award Winner! Old School Fool Global Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 20264  
Subject: tough times for yield Date: 3/21/2013 5:08 PM
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Recommendations: 5
I manage a port for the 'rents and just had a transfer of quite a bit of cash out of Wells Fargo financial services to a brokerage account I manage

They are too heavy into bond funds for comfort and about 30% of their mutual funds were sold in the transfer leaving 2/3 still to be disposed of.

The problem is that most of these funds distribute monthly providing a steady income for them.The switch is going to create gaps in income that are going to be difficult to fill. I am researching individual corporate bonds but most pay twice a year and are selling at premiums to par. The yield is not great and it's been hard find anything above 4%.Getting a good return on a staggered ladder of high yield bonds has been impossible.

Likewise, big blue chips that were amazingly cheap two years ago and yielding 5% or more are hard to find at present. Big cash flow producers like JNJ, Chevron, Merck, Total etc are too expensive now.

Bonds are not a good investment for income, solid high yielding blue chips have disappeared so these super-dividend funds mentioned in the previous thread make them intriguing. They also pay monthly which is desirable.

Looking at the holdings, I see a lot of MLPs, LLCs and a few REITs. The individual holdings look reasonably safe too. I would not want to sink thousands into Lorillard or Altria or Century Link, but they are all stocks I have considered individually. As a group with the risk spread out a bit and my entire investment not committed to huge position in an individual name to get some yield makes this ETF look like an attractive alternative. As you all know, MLPs and LLCs are difficult tax problems and this is an excellent way to get the income from these fairly safe pipelines etc without the tax headache.

This list appears to be decently diversified with low-ish risk and a better alternative than bonds or individual names. It beats what I can do trying to go after either outsized positions on a couple of names or lower yielding bonds

%
2.21 WP CAREY INC
2.10 BRISTOL MYERS SQUIBB
2.07 FIRSTENERGY
2.07 TWO HARBORS INV CORP
2.06 NISKA GAS STORAGE
2.06 REGAL ENTERTAINMENT
2.06 VECTREN CORPORATION
2.06 ENBRIDGE ENERGY PARTNERS
2.05 NATURAL RESOURCE PART. LP
2.05 GREAT PLAINS ENERGY INC
2.05 TC PIPELINES LP
2.05 CONSOLIDATED COMM
2.04 LOCKHEED MARTIN
2.04 VERIZON COMMUNICATIONS
2.03 PDL BIOPHARMA INC
2.03 LORILLARD INC
2.02 PEPCO HOLDINGS INC
2.02 HATTERAS FINCL CORP
2.02 ANWORTH MORTGAGE ASSET CO
2.01 WORLD WRESTLING FED ENT
2.01 MERCK & CO INC/NJ
2.01 MFA MORTGAGE INVESTMENTS
2.00 CAPSTEAD MORTGAGE CORP
2.00 ENTERGY CORP
1.99 AMEREN CORPORATION
1.99 PINNACLE WEST CAPITAL
1.98 AVISTA CORP
1.98 ALTRIA GROUP INC.
1.97 CENTURYLINK INC
1.97 ENERGY TRANSFER PARTNERSP
1.97 INTEGRYS ENERGY GROUP INC
1.96 CYS INVESTMENT INC.
1.96 ENTERPRISE PRODUCTS PRTNR
1.96 AT&T INC
1.96 ANNALY CAPITAL MANAGEMENT
1.96 DYNEX CAPITAL (REIT)
1.96 HAWAIIAN ELEC
1.96 REYNOLDS AMERICAN INC
1.95 CONSOLIDATED EDISON INC
1.95 UNITED ONLINE
1.95 WINDSTREAM CORP
1.94 AMERICAN CAPITAL AGENCY
1.93 QR ENERGY LP
1.93 LINN ENERGY LLC - UNITS
1.92 VECTOR GROUP LTD.
1.92 PENNYMAC MORTGAGE INVS
1.90 ONEOK PARTNERS LP
1.89 FRONTIER COMMUNICATIONS
1.86 FERRELLGAS PARTNERS-LP
1.83 ARMOUR RESIDENTIAL REIT
0.11 CASH
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