"What would you consider to be the maximun % of a portfolio invested in MLPs which would remain prudent?"
Of course that all depends on one's age, and other factors. As you get older, you need to have a more diverse portfolio, and move to capital preservation. For the younger person, who watches the market and is nimble, it would not be too bad to go 40% in MLP's. My opinion of course.
I am retired and on fixed income. 65 years old, SS, and pension. So I am well into cap preservation. So for me is much different. I am ~10% MLP's, 50% Stable Fund (fixed 4.5%) and rest in diverse stocks that are modest risk. Also muni bonds, and one junk bond fund.
I would not sit on that much fixed return (50% = 100% of my 401-K) if I could not get that good interest.
Good analysis. I also look at growth however I am more aware of INSIDER ownership. KMP has the highest % of INSIDER ownership of any of the MLP's & if the mgmt hasn't a hugh investment in their own co. I avoid it. This type of investing got me into CHK at single digits as well as KMP. I also keep track of the Insider trading on my stocks weekly. I don't mind seeing sales as long as they are not being made at lows. I have been in KMP since it was in the mid $20's with my last buy @$43.00.
I too have been thinking along the same lines and I was always led to beleive that one should always stay about 20% invested in one type of investment at the most.Have KMP, EPD, TPP, and PAA. Watching for an entry point for APL. Missed an opportunity at 43 just a little while back. Good luck.
I too wish to thank you for your insightful comments.
A question. I cant find any yield oriented investment that seems superior to MLPs. What
would you consider to be the maximun % of a portfolio invested in MLPs which would remain prudent?
Thanks in advance
TYG and TYY only release their NAV on the last business day of the month.
You can find the monthly historic NAVs here:
You are correct about leverage and possible int. rate swings. Closed end funds tend to over react to selling as oppossed to open end funds from time to time. I am not sure I understand NAV value. By racketing any quote for a closed end fund with X_ _ _ X you get the NAV and can calculate the discount to premium Also look at the ETF web site which is helpful for the info you require.
The quotes are not the point - I can't get any current NAV for either fund. Maybe it's because they're structured as regular corporations rather than typical CEFs, but the NAV should be available somewhere. Otherwise, how can anyone make an intelligent decision to buy or not?
My opinion is that they're typically leveraged - 50% or so auction rate preferred, which magnifies your exposure to interest rate swings. Couple that with their fairly high expense ratios, and I would stay away unless they're trading at a significant discount to NAV.