Year End Review of My Income Portfolio

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Includes: APL, CVY, MNRTA, SFL
by: Tim Plaehn

As my site has progressed I have been working to develop on-line portfolios of the stocks I am interested in. In mid 2008 I went with a more active management of the portfolios and set up a tracking system to monitor the progress. My Income Portfolio went active on July 1, 2008 with a value of $20,000 divided equally between 10 dividend paying stocks or ETFs. All earned dividends are retained in the portfolio. The purpose of this article is to highlight what has happened with the portfolio over the last 6 months.

At the end of 2008 the portfolio was down 35% from its starting point. The only months with postive returns were July and August. December was basically break even. The total amount of dividends earned was $1,102.56, or 5.5% of the starting value.

The worst performing stocks still in the portfolio were Atlas Pipeline Partners (NYSE:APL) whose stock has shed 80% of its value and Ship Finance Ltd (NYSE:SFL) down 50%. APL is under a big cloud of low energy prices and debt. At this point I have no clue to what level APL will be forced to cut its distribution, but think there is upside in the company, especially if it ends up combined with Atlas Pipeline Holdings (AHD), the general partner. Ship Finance has increased its dividends each in the last 2 quarters, but that did not stop the market from hammering the stock price along with the entire shipping sector.

The only stock in the portfolio with a positive stock price was Monmouth Real Estate Investment Corp. (MNRTA) which is up 9% for the 6 months. This quiet little REIT has been surprising in its steadiness. CVY (see below) was up 7% for the single month it was in the portfolio.

Two stocks were removed from the portfolio. City Bank (OTCPK:CTBK) was sold out at a 50% gain when the market got all excited about stocks in September. I did not believe it could maintain its dividend and it has been proven true. Penn West Energy (PWE) was sold out of the portfolio at the end of November at a 50% loss (not including dividends). Falling energy prices and Canadian dollar did not give me much hope for this company.

The Claymore/Zacks Yield Hog ETF (NYSE:CVY) was added the 1st of December. I thought this would be a more conservative way than individual stocks to put some cash to work.

At this point the portfolio has nine holdings. I am pretty confident about all of them except APL, but believe the chances of a positive surprise are greater than the chances of a negative one. With the current average yield of the portfolio near 20% I think there is a lot of upside for the stock prices and in the meantime will just be collecting dividends into the cash holding. As of 12/31 there is $422.84 cash in the portfolio.

Note: This Income Portfolio is hypothetical and does not 100% reflect my personal holdings. The discussion and data on the portfolios are for informational purposes only and are not meant to be investment or trading advice.