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Kinder Morgan Energy Partners Message Board

  • amat_toast amat_toast Dec 18, 2012 6:26 PM Flag

    What if interest rates go up more?

    Can KMP continue to climb if interest rates rise? I think so. Because the economy will be getting better. But I could be wrong.

    Sentiment: Buy

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    • "But I could be wrong."
      Yes, you could be. And so could anyone who answers your question. So little point in speculating.

      Most likely it depends on how fast they rise. If it's a slow gentle rise, MLPs will probably do OK.
      But a sharp spike will crash most income investments including MLPs.

      • 1 Reply to lizahuang54321
      • Liza, Im not sure if MLPs have had an interest rate induced down cycle yet. The popularity has seemed to have been coupled with a low interest enviornment that has gone on for over 15 years. If the rate on the 10-year were to rise to say a more historical 6% I could see half the companies having to cut distrbutions and the other half having very little growth. The fact that the companies don't or aren't allowed to build some cash reserves for when the sea's get rough is sort of scary.

    • The Mayans predicted calamity on 12/21....everyone figured that it would be an earthquake, pole shift, or Planet X....but no, its interest rates, yes, increased interest rates, the scourge of equity and cover!