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  • Take Profits In Kinder Morgan Without Sacrificing Dividend [View article]
    Hi lizahuang - We appreciate your passion and thanks for the comments. You are correct that MLP distributions (dividends) are tax deferred and that this strategy may not be for everyone. That said, tax deferred or not, collecting distributions/dividends is a lost cause if you lose money on the stock itself. Unfortunately, too many investors take solace in the "buy & hold" philosophy...

    Also, tax deferred assets carry a risk that most people don't consider...what if your tax rate is much higher when the tax man eventually comes? With all the debt problems and entitlement issues this country is facing, don't be surprised if tax rates are 50-60% in 15-20 years.

    At the end of the day, we are absolute return investors and we place risk management above all else...but we appreciate the fact other investors have their own philosophies and strategies that they follow...
    Feb 7, 2012. 11:43 PM | Likes Like |Link to Comment
  • Take Profits In Kinder Morgan Without Sacrificing Dividend [View article]
    Hi AnnieA - Thanks for the comments. This strategy is definitely not for everyone. We should have specified that this strategy is most often used in our active income portfolio (where tax consequences are less of an issue). Clearly, we do not suggest that you implement this short-term strategy if you are sitting on 10 years of distributions! Sounds like KMP has been a big winner for you!
    Feb 7, 2012. 10:47 PM | Likes Like |Link to Comment
  • American Capital Agency Is Still A Buy After Dividend Cut [View article]
    Yes, Annaly has cut its dividend two quarters in a row...
    Feb 7, 2012. 10:31 AM | 1 Like Like |Link to Comment
  • American Capital Agency Is Still A Buy After Dividend Cut [View article]
    That is correct, Fabien. AGNC's leverage is 7.6x (vs. 5.5x for NLY)...which warrants a slight yield premium.
    Feb 7, 2012. 09:34 AM | 1 Like Like |Link to Comment
  • American Capital Agency Is Still A Buy After Dividend Cut [View article]
    Hi manbat - thanks for the comment. Our ideal "Buy Zone" for AGNC is $26.00-$27.00 (see article below). However, we would still be a buyer at current levels.

    Based on the current market price, the future dividend yield would be approximately 17%. AGNC has been paying an above market yield for several quarters now and we have been expecting the yield to come down to the 13%-15% level (which is inline with its peers). We continue to believe that agency mREITs offer investors a very attractive risk-reward profile in the current low interest rate environment...
    Feb 7, 2012. 09:11 AM | Likes Like |Link to Comment
  • Defensive Dividend Portfolio Buy Zones Part II: Health Care [View article]
    ArcticSurfer - Click on the links above to see our initial articles about these stocks. This point of this article was to highlight "buy zones" for each stock...
    Feb 3, 2012. 02:29 PM | Likes Like |Link to Comment
  • Defensive Dividend Portfolio Buy Zones (Part III: Consumer Staples) [View article]
    Hi Lee 99 - thanks for the comments. Your question is an excellent one. Yes, we absolutely have defined exit rules as well. The exit will depend on several factors though including entry price, timing of the next dividend, whether or not you are using complementary option strategies, etc.

    Is there a specific stock that you have a question about?
    Feb 2, 2012. 05:46 PM | Likes Like |Link to Comment
  • Be Cautious On Mortgage REITs [View article]
    You are correct that investors need to watch prepayment rates closely, but the Agency REITs will be more sensitive to interest rates. The Fed is going to keep interest rates near zero until at least the end of 2014...which is very positive for mREITs...
    Feb 2, 2012. 12:44 PM | Likes Like |Link to Comment
  • The 'Lucky 13' Dividend Stocks For 2012 [View article]
    Hi gapwedge - Thanks for the comments and thanks for reading. Continue to stay patient with your cash in 2012...there will be some great buying opportunities...
    Jan 31, 2012. 03:36 PM | Likes Like |Link to Comment
  • Energy Sector: 2 Option Income Trades With Limited Risk And Potential Yields Over 45% [View article]
    Actually, you are incorrect rjj1960...if the trade goes against you, your loss is 100% of margin. We have discussed risk management rules for call spread trades in previous articles, however it sounds like we need dedicate a future article solely to the topic.

    In a nutshell, we look for low risk entry points (like the ones discussed in this article) on these trades. Our experience has been that 80-85% of the options in these trades will expire worthless, which puts the odds in the option sellers' favor. That said, there will definitely be times when the trade goes against you. However, with a spread trade, your risk is limited to the difference between your long strike and your short strike (less the premium you receive on the credit spread).

    Over time, with proper risk management, this strategy is a very safe income generating strategy.
    Jan 31, 2012. 11:12 AM | Likes Like |Link to Comment
  • 8 Core Dividend Stocks Retirees Should Buy On A Pullback [View article]
    Hi Rincon - The company has a long and stable dividend history and we think the future prospects of both businesses are very strong. As such, we don't think shareholders should be too concerned about "spin-off" risk here. We'll know more about the future dividend policy after the split takes place later this year...but we still view ABT as a "core" dividend stock for our portfolio.
    Jan 27, 2012. 06:03 PM | Likes Like |Link to Comment
  • 8 Core Dividend Stocks Retirees Should Buy On A Pullback [View article]
    HI BTinSF - We own PM as well. This list was only meant to be a sample of "core" dividend stocks...not necessarily a diversified portfolio in itself.

    From a risk management perspective, we are far more concerned about portfolio asset allocation (i.e., mix of stocks, bonds, commodities, real estate, cash, etc.) than we are about diversification within our dividend stock portfolio. We focus on stocks with stable dividend streams and lately have been overweight defensive industries. In a true downside scenario, asset selection is far more important than stock selection...
    Jan 27, 2012. 05:39 PM | Likes Like |Link to Comment
  • Defensive Dividend Portfolio Picks For 2012 (Part 1: Utilities) [View article]
    Hi, Archman investor - Thanks for reading and providing feedback. The vast majority of the articles that we write highlight trades (stocks or options) that we are in. We share your discontent about authors who have no skin in the game.

    As far as the depth of the analysis in the article, we take a more macro, top-down approach to investing. The core of our thesis for investing in the utility space is built around the macro environment and the stability of the dividend income streams (which we discussed in the article).

    That said, we appreciate your point of view for more analysis...
    Jan 25, 2012. 08:40 AM | 1 Like Like |Link to Comment
  • How To Profit From Homebuilders Priced For Perfection [View article]
    Hi Jake - To be fair...the title was an SA editor change. We do mention in the article that many analysts feel that the sector is priced to perfection...which is true. If orders come in below expectations, there will definitely be some volatility to the downside.

    We tend to agree with you about the potential upside, which is why we wouldn't take a short position in the stocks. That said, a healthy pullback in the sector would be good to see after the recent run up. If the put options that we mention in the article are exercised it would probably be a good thing for the investor (great cost basis)...
    Jan 18, 2012. 02:10 PM | 1 Like Like |Link to Comment
  • What The Rest Of Us Can Learn From Chimera Investors' Mistakes [View article]
    Well said, searcher...
    Jan 18, 2012. 01:54 PM | 1 Like Like |Link to Comment