How To Construct A Crash-Resistant Income Portfolio

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Includes: AAPL, ADM, ADP, AFL, AMZN, APD, CELG, CL, CLX, CSCO, CVS, CVX, EMR, EVT, FB, FFC, GIS, GOOGL, HCP, HQH, IEF, INTC, JNJ, JPM, KO, KYN, LMT, LOW, MA, MAIN, MCD, MDT, MO, MSFT, NFLX, NLY, NMZ, NNN, NOBL, NSRGY, NVO, NVS, O, OHI, PEP, PFE, PFF, PG, PM, QCOM, RFI, RNP, SCHD, SHY, SPY, T, TLT, UL, UTF, UTX, VEA, VIG, VLO, VNQ, VTR, VYM, VZ, WBA, WFC, WM, WMT, WPC, XOM
by: Financially Free Investor
Summary

Stock market volatility made a big comeback in 2018, especially compared to the previous year. The S&P 500 index lost 19.9% from its peak to bottom on December 24, 2018.

We study three recent periods of market stress, Sept-Dec 2018, May-Oct 2011 and the 2007-2009 recession.

We then compare the behavior of nearly 70-80 stocks and some dividend-ETFs the with S&P 500 to find stocks that may be crash-resistant, albeit on a relative basis only.

We then construct a portfolio that would possibly have only half the drawdowns of S&P500 in case of a bear market and provide decent upside in case of recovery. The portfolio also provides 4.0% income.

Stock market volatility made a big comeback in 2018, especially when compared to the previous year. Most market participants had become complacent during the last few years. The SPDR S&P 500 Index ETF ( SPY), which represents the S&P 500 Index, declined -19.8% from its peak achieved in September 2018 until Christmas Eve on 24th December 2018. The S&P 500 barely avoided the technical definition of a bear market (supposed to be at least a 20% decline). However, there were other major market-indexes like Nasdaq Composite, which were not so lucky and lost over 23% from its high to lows on December 24, 2018.

Even though all the major indexes have recovered significantly since Christmas, it gives a pause to conservative investors and retirees to think about how to re-position their portfolios for a possible recession in the future (even if it is distant).

S&P 500 ( SPY) chart:

What Lessons Can We Learn from Previous Market Crashes?

A market environment like this reminds us of the importance of a well-thought-out strategy that can stand both the good times and bad. Irrespective of the direction that the market may take, it becomes even more important to stick to the pre-planned strategy in times like this.

However, we should also use this opportunity and be ready with our buy or wish-list to take advantage of discounted prices when they are offered by Mr. Market. We wanted to see how different stocks or securities reacted to the market swoon of the 4th quarter of 2018. But that study in isolation would be meaningless unless we can study the behavior of the same stocks in the previous few crashes. So, we will go back to the previous market crash of 2007-2009 as well as the short-lived crash of May-Oct 2011. We start with a set of about 70-75 stocks and other securities that we are either already invested in or follow them closely. We looked at the behavior and price declines of our selected securities during the following periods:

  1. Oct 11, 2018 – Dec 24, 2018
  2. Apr 29, 2011 – Oct 3, 2011
  3. Oct 11, 2007 – Mar 9, 2009

We then compared each of them with the performance of S&P 500 (SPY) during these periods of stress. We also compared the performance of some of the popular Dividend ETFs like Vanguard High Dividend Yield ETF (VYM), Vanguard Dividend Appreciation ETF (VIG), Vanguard FTSE Developed Markets ETF (VEA), and Vanguard Real Estate ETF (VNQ). We could not compare or analyze some other popular ETFs that do not have sufficiently long histories such as Schwab US Dividend Equity ETF (SCHD), and ProShares S&P 500 Dividend Aristocrats (NOBL). SCHD has an inception date of October 2011, whereas NOBL only goes back to October 2013. We tried to analyze how these stocks performed when compared to the S&P 500 or dividend ETFs.

The list of stocks/securities that were part of our sample:

DGI Stocks:

Archer Daniels Midland ( ADM),

Automatic Data Processing ( ADP),

Aflac Inc ( AFL),

Air Products and Chemicals ( APD),

Celgene Corporation ( CELG),

Colgate ( CL),

Clorox ( CLX),

CISCO ( CSCO),

CVS Healthcare ( CVS),

Chevron Corp ( CVX),

Emerson Electric ( EMR),

General Mills ( GIS),

HCP Inc ( HCP),

Intel Corp ( INTC),

Johnson & Johnson ( JNJ),

JPMorgan Chase ( JPM),

Coca-Cola Co ( KO),

Lockheed Martin ( LMT),

Lowe's ( LOW),

McDonald's ( MCD),

Medtronic plc ( MDT),

Altria Group ( MO),

MasterCard ( MA),

Microsoft ( MSFT),

National Retail Properties ( NNN),

Nestle ( OTCPK:NSRGY),

Novo Nordisk ( NVO),

Novartis AG ( NVS),

Realty Income Corp ( O),

Omega Healthcare ( OHI),

Pepsico ( PEP),

Pfizer ( PFE),

Proctor & Gamble ( PG),

Philip Morris ( PM),

QUALCOMM Inc ( QCOM),

AT&T ( T),

Unilever ( UL),

United Technologies ( UTX),

Valero Energy ( VLO),

Ventas Inc ( VTR),

Verizon ( VZ),

Walgreens Boots Alliance ( WBA),

Waste Management ( WM),

Walmart ( WMT),

Wells Fargo & Company (WFC),

W. P. Carey Inc ( WPC),

Exxon Mobil ( XOM),

Tech Stocks:

Apple (AAPL),

Amazon ( AMZN),

Google ( GOOGL),

Netflix ( NFLX),

High Income Securities:

ETFs:

iShares US Preferred Stock ETF ( PFF)

BDCs/mREIT:

Annaly Capital ( NLY),

Main Street Capital ( MAIN)

CEFs:

Eaton Vance Dividend Income Fund ( EVT),

Flaherty & Crumrine Preferred Securities ( FFC),

Kayne Anderson MLP ( KYN),

Cohen & Steers Realty Fund ( RFI),

Cohen & Steers REIT and Preferred Inc Fund ( RNP),

Tekla Healthcare Investors ( HQH),

Nuveen Municipal High Income Fund ( NMZ),

Cohen & Steers Infrastructure Fund ( UTF),

Treasuries:

iShares Short term Treasury Bond ETF (SHY),

iShares 7-10 Year Treasury Bond ETF ( IEF),

iShares 20+ Year Treasury Bond ETF ( TLT)

Stocks that Performed Better than S&P 500

Stocks That Out-Performed S&P 500 All Three Times:

Among the 47 DGI stocks on our list, 27 of them fared better than S&P 500 during all three crashes. A view of the same is presented below.

Price on 10/11/ 2007

Price on 3/9/ 2009

Decline or Advance

Price on 4/29/ 2011

Price on 10/3/ 2011

Decline or Advance

Price on 9/20/ 2018

Price on 12/24/2018

Decline or Advance

ABT

25.53

22.32

-12.57%

24.9

24

-3.61%

68.79

65.56

-4.70%

ADP

47.9

33.2

-30.69%

54.36

46.47

-14.51%

148.88

121.95

-18.09%

AMGN

57.83

46.27

-19.99%

56.85

53.9

-5.19%

205.1

178.4

-13.02%

CL

36.8

27.53

-25.19%

42.18

44.15

4.67%

68.79

58.04

-15.63%

CLX

62.58

45.9

-26.65%

69.66

64.55

-7.34%

151.88

145.37

-4.29%

CVX

91

58.28

-35.96%

109.44

89.88

-17.87%

119.42

100.99

-15.43%

GIS

28.94

24.85

-14.13%

38.58

37.96

-1.61%

44.37

37.59

-15.28%

HCP

31.64

14.98

-52.65%

36.07

30.8

-14.61%

26.35

26.77

1.59%

INTC

25.43

12.55

-50.65%

23.15

20.62

-10.93%

47.2

43.59

-7.65%

JNJ

65.95

46.6

-29.34%

65.72

62.08

-5.54%

141.98

122.84

-13.48%

KO

28.6

19.38

-32.24%

33.73

32.71

-3.02%

46.64

45.96

-1.46%

MCD

56.25

52.32

-6.99%

78.31

86.02

9.85%

160.79

170.28

5.90%

MDT

56.44

85.97

52.32%

41.75

85.97

105.92%

97.48

85.97

-11.81%

MSFT

29.91

15.15

-49.35%

25.92

24.53

-5.36%

113.57

94.13

-17.12%

NNN

25.75

13.14

-48.97%

26.34

25.95

-1.48%

44.45

45.57

2.52%

NSRGY

43.12

30.3

-29.73%

62.2

54.13

-12.97%

84.37

80.04

-5.13%

NVS

53.93

34.53

-35.97%

59.17

54.69

-7.57%

85.97

82.49

-4.05%

O

29.01

15.26

-47.40%

35.55

30.54

-14.09%

57.27

60.27

5.24%

PEP

71.77

45.81

-36.17%

68.89

60.29

-12.48%

115.22

106.03

-7.98%

PFE

25.45

12.63

-50.37%

20.97

17.33

-17.36%

43.75

40.55

-7.31%

PG

71.77

44.18

-38.44%

64.9

62.84

-3.17%

85.36

87.36

2.34%

T

41.61

21.72

-47.80%

31.12

28.16

-9.51%

33.44

27.36

-18.18%

UL

32.8

17.04

-48.05%

32.57

30.56

-6.17%

55.95

50.97

-8.90%

VTR

34.03

16.84

-50.51%

48.98

41.77

-14.72%

56.97

57.51

0.95%

VZ

42.71

24.48

-42.68%

37.78

36.34

-3.81%

53.95

53.05

-1.67%

WMT

46.9

47.51

1.30%

54.98

51.96

-5.49%

95.75

85.82

-10.37%

WPC

31.85

18.88

-40.72%

35.87

35.56

-0.86%

66

64.85

-1.74%

SPY

155.47

68.11

-56.19%

136.43

109.93

-19.42%

293.58

234.34

-20.18%

Stocks That Out-Performed At Least 2 Out of 3 Crashes:

Another 14 DGI stocks (out of 47 DGI on our list) fared better than S&P 500 at least two out of three instances. A view of the same is presented below. The Pink color highlights the underperformance with S&P 500.

Or in the usual table form:

Price on 10/11/ 2007

Price on 3/9/ 2009

Decline or Advance

Price on 4/29 /2011

Price on 10/3/ 2011

Decline or Advance

Price on 9/20/ 2018

Price on 12/24/ 2018

Decline or Advance

APD

89.93

42.1

-53.19%

88.31

68.29

-22.67%

170.42

149.88

-12.05%

CELG

36.08

19.98

-44.62%

29.44

30.35

3.09%

88.3

59.21

-32.94%

CSCO

32.8

13.62

-58.48%

17.52

15.19

-13.30%

47.73

40.28

-15.61%

CVS

39.62

23.98

-39.48%

36.22

32.97

-8.97%

79.39

62.92

-20.75%

LMT

111.88

58.24

-47.94%

79.25

71.16

-10.21%

333.13

245.22

-26.39%

LOW

28.97

13.68

-52.78%

26.25

18.98

-27.70%

116.7

85.96

-26.34%

MA

16.18

14.24

-11.99%

27.59

31.09

12.69%

221.39

174.65

-21.11%

MO

21.57

15.86

-26.47%

26.84

26.56

-1.04%

62.26

47.56

-23.61%

NVO

11.71

8.63

-26.30%

25.48

19.34

-24.10%

47.5

43.99

-7.39%

OHI

16.88

12.09

-28.38%

22.96

14.6

-36.41%

32.81

33.72

2.77%

QCOM

41.47

33

-20.42%

57.09

47.65

-16.54%

74.6

53.65

-28.08%

WBA

38.68

21.5

-44.42%

42.72

32.47

-23.99%

72.89

65.26

-10.47%

WM

38.42

22.23

-42.14%

39.46

31.36

-20.53%

91.72

83.7

-8.74%

XOM

92.66

64.57

-30.32%

87.98

71.15

-19.13%

84.82

65.51

-22.77%

SPY

155.47

68.11

-56.19%

136.43

109.93

-19.42%

293.58

234.34

-20.18%

Stocks that performed worse than S&P 500 all three times:

The only stock from our list of 47 DGI stocks that performed poorly in comparison to S&P 500 in all three crashes was VLO. This does not necessarily make VLO a bad stock, it is just that it may be too volatile during periods of stress.

Price on 10/11/ 2007

Price on 3/9/ 2009

Decline or Advance

Price on 4/29 /2011

Price on 10/3/ 2011

Decline or Advance

Price on 9/20/ 2018

Price on 12/24/ 2018

Decline or Advance

SPY

155.47

68.11

-56.19%

136.43

109.93

-19.42%

293.58

234.34

-20.18%

VLO

66.9

15.19

-77.29%

25.85

15.68

-39.34%

110.48

68.94

-37.60%

What Can We Observe for DGI stocks?

We can see that as a group, these stocks performed very well. Out of total 47 stocks, 41 stocks performed better than S&P 500 at least two times. In fact, Further, all of these stocks are dividend stocks, and they continued to pay good dividends, most of them paid between 3-4%, probably double of S&P 500. Since the above comparison is based on the market prices, after including the dividends, their performance would be even better.

What about the Dividend ETFs?

Here is the snapshot for the four dividend ETFs including VNQ (the Real Estate ETF). Though a bit surprising, only one of them, "VIG" fared slightly better than SPY all three times. VYM fared better at least 2 times, whereas VEA and VNQ fared better only one time during 4th quarter 2018.

Price on 10/11/ 2007

Price on 3/9/ 2009

Decline or Advance

Price on 4/29 /2011

Price on 10/3/ 2011

Decline or Advance

Price on 9/20/ 2018

Price on 12/24/ 2018

Decline or Advance

SPY

155.47

68.11

-56.19%

136.43

109.93

-19.42%

293.58

234.34

-20.18%

VYM

55.41

22.94

-58.60%

46.11

39.43

-14.49%

89.14

73.71

-17.31%

VIG

58.57

30.55

-47.84%

57.45

47.5

-17.32%

112.09

92.08

-17.85%

VEA

51.37

19.44

-62.16%

39.62

29.36

-25.90%

43.81

35.84

-18.19%

VNQ

75.25

21.62

-71.27%

61.83

48.47

-21.61%

82.81

71.74

-13.37%

The Popular Tech or FAANG Stocks

We only considered 4 tech stocks, i.e., Apple (AAPL), Amazon (AMZN), Alphabet (GOOGL), Netflix (NFLX). Facebook (FB) was not a publicly traded stock in 2007, so we had to exclude it. We included MSFT in the DGI list, so it was not included here. The comparison is presented below. However, there is no clear pattern that could emerge from this list. AAPL, AMZN, and GOOGL performed better in 2007-2009, and 2011, but AAPL and AMZN performed quite poorly in 2018.

Price on 10/11/ 2007

Price on 3/9/ 2009

Decline or Advance

Price on 4/29/ 2011

Price on 10/3/ 2011

Decline or Advance

Price on 9/20/ 2018

Price on 12/24/ 2018

Decline or Advance

AAPL

23.18

11.87

-48.79%

50.02

53.51

6.98%

220.03

146.83

-33.27%

AMZN

89.34

60.49

-32.29%

195.81

211.98

8.26%

1944.3

1343.96

-30.88%

GOOGL

311

145.45

-53.23%

272.05

247.76

-8.93%

1191.57

984.67

-17.36%

NFLX

3.27

5.5

68.20%

33.24

16.18

-51.32%

365.36

233.88

-35.99%

SPY

155.47

68.11

-56.19%

136.43

109.93

-19.42%

293.58

234.34

-20.18%

High-Income Funds (CEFs and BDCs):

For most CEFs and other income funds, S&P 500 probably is not the correct benchmark to compare. Also, since most income funds provide monthly distributions in the range of 6%-10%, the price alone is not a good comparison as the results are skewed. However, nonetheless, here is the comparison based on price action:

Price on 10/11/ 2007

Price on 03/09/ 2009

Decline or Advance

Price on 4/29/ 2011

Price on 10/3/ 2011

Decline or Advance

Price on 9/20/ 2018

Price on 12/24/ 2018

Decline or Advance

EVT

28.89

6.81

-76.43%

18.13

13.19

-27.25%

24.5

17.63

-28.04%

FFC

18.31

4.8

-73.78%

17.83

15.76

-11.61%

18.5

16.05

-13.24%

HQH

17.61

8.42

-52.19%

15.82

12.52

-20.86%

22.85

16.79

-26.52%

KYN

31.56

14.96

-52.60%

30.58

26.03

-14.88%

18.18

12.52

-31.13%

MAIN

14.9

9.4

-36.91%

18.81

17.03

-9.46%

39.29

32.58

-17.08%

NLY

15.34

12.97

-15.45%

17.84

15.84

-11.21%

10.31

9.71

-5.82%

NMZ

16.03

8.8

-45.10%

11.77

11.52

-2.12%

12.63

11.43

-9.50%

PFF

47.88

15.23

-68.19%

40.06

34.67

-13.45%

37.1

33.41

-9.95%

RFI

17.83

4.32

-75.77%

13.95

10.61

-23.94%

12.4

10.65

-14.11%

RNP

26.49

3

-88.67%

15.92

12.36

-22.36%

19.8

16.45

-16.92%

UTF

27.35

6.78

-75.21%

18.37

15.31

-16.66%

22.78

18.78

-17.56%

SPY

155.47

68.11

-56.19%

136.43

109.93

-19.42%

293.58

234.34

-20.18%

Since 2007-2009 was the only prolonged downturn, we will consider this period to show the impact of dividends/distributions and compare with S&P 500. If we were to invest $100,000 at the beginning of October 2007 (equally among the above 11 funds) and sold at the end of March 2009, this is how it would compare with S&P 500 (chart courtesy portfolio-visualizer):

The Income Fund portfolio and S&P 500 were down by 43% and 47% respectively with dividends included, so the income-portfolio fared slightly better after including distributions. This shows that an Income portfolio consisting of mostly CEFs, BDCs and maybe some REITs, should have no greater risk than S&P 500.

The Treasury Funds

As widely believed and correctly so, the Treasury funds are supposed to be a safe haven during the times of crisis or stress. This is amply demonstrated below from the data from each of three crash scenarios. That would mean a modest 10% allocation to the Treasury funds (mix of long-term, mid-term and short-term) will go a long way in providing some safety cushion to any DGI portfolio.

Price on 10/11/ 2007

Price on 03/09/ 2009

Price on 4/29/ 2011

Price on 10/3/ 2011

Decline or Advance

Price on 9/20/ 2018

Price on 12/24/ 2018

Decline or Advance

TLT

88.06

103.65

17.70%

93.89

123.81

31.87%

117.15

121.32

3.56%

IEF

83.33

94.52

13.43%

94.47

105.83

12.02%

100.96

103.48

2.50%

SHY

80.91

83.89

3.68%

84.13

84.54

0.49%

83.05

83.46

0.49%

SPY

155.47

68.11

-56.19%

136.43

109.93

-19.42%

293.58

234.34

-20.18%

Portfolio Construction for the Bear Market

(just in case we have one):

For the sake of completeness to this article, we will construct a balanced risk-averse DGI portfolio that is somewhat bear market-resistant and likely to provide lower drawdowns and quicker recovery. At the same time, we would like our portfolio to provide a decent level of income that would make it much easier to ride out any prolonged correction. Also, over and above the income, the portfolio should also provide a decent amount of growth to meet the rate of inflation and some more.

With the above goals in mind, we have selected a combination of 20 DGI stocks from 8 different sectors (roughly 15 industry segments), seven CEFs/BDCs, and 10% allocation to mix of Treasuries. Younger investors with a long horizon should replace the Treasuries by a couple of growth stocks.

Ticker

Sector/ Industry

Invested Amount

Yield %

Dividend Amt

**Average Drawdown Variance % with S&P 500

##Value if S&P 500 were to drops 50%

70% Allocation to 20 DGI stocks

ABT

Healthcare

3500

1.84%

64.4

21.80%

3118.50

ADP

Business Process

3500

2.36%

82.6

66.07%

2343.78

AMGN

Healthcare

3500

3.02%

105.7

39.88%

2802.10

CLX

Consumer Staples

3500

2.63%

92.05

39.96%

2800.70

CVX

Energy/Oil major

3500

4.01%

140.35

72.30%

2234.75

INTC

Technology/SemiC

3500

2.71%

94.85

72.27%

2235.28

JNJ

Healthcare

3500

2.73%

95.55

50.49%

2616.43

KO

Beverages

3500

3.26%

114.1

38.33%

2829.23

MCD

Restaurants/Retail

3500

2.55%

89.25

-9.15%

3660.13

MDT

Healthcare/Devices

3500

2.31%

80.85

0%

3500.00

MSFT

Technology

3500

1.79%

62.65

74.99%

2187.68

NNN

REIT

3500

3.84%

134.4

50.04%

2624.30

NSRGY

Consumer Staples

3500

2.79%

97.65

49.93%

2626.23

O

REIT

3500

4.06%

142.1

58.72%

2472.40

PEP

Beverages

3500

3.40%

119

59.12%

2465.40

PG

Consumer Staples

3500

3.07%

107.45

41%

2782.50

T

Communications/Media

3500

6.95%

243.25

78.81%

2120.83

VTR

REIT/Healthcare

3500

4.99%

174.65

67.11%

2325.58

VZ

Communications

3500

4.52%

158.2

50.28%

2620.10

WMT

Retail

3500

2.15%

75.25

15.20%

3234.00

70,000

46.86%

53,600

20% Allocation to CEFs/BDCs

EVT

Equity CEF

2500

8.25%

206.25

100%

1250.00

HQH

Healthcare CEF

2500

9.77%

244.25

100%

1250.00

MAIN

BDC

2500

6.43%

160.75

100%

1250.00

NMZ

Utilities

2500

5.47%

136.75

100%

1250.00

PFF

Preferred ETF

2500

6.31%

157.75

100%

1250.00

RFI

Real Estate CEF

2500

7.54%

188.5

100%

1250.00

UTF

Infrastructure CEF

2500

8.03%

200.75

100%

1250.00

PCI

Debt Securities CEF

2500

8.60%

215

100%

1250.00

20,000

100.00%

10,000

10% Allocation- Treasuries

SHY

Short-term

3400

1.72%

58.48

-6.57%

3511.71

IEF

Mid-term

3300

2.25%

74.25

-23.98%

3695.71

TLT

Long-term

3300

2.64%

87.12

-31.61%

3821.52

10,000

-20.72%

11,029

Portfolio TOTAL/AVERAGE

100,000

4.00%

4004.15

50.73%

74,629

** Average Drawdown Variance % with S&P 500: This factor has been calculated by taking the average drawdown for the stock/security for the three crash periods described in this article and dividing it by the average drawdown for S&P 500. For CEFs/BDCs, we have assumed a factor of 100% because after including their dividends they move down as much as S&P 500. This was proved by our examples earlier. The Average Drawdown Variance factor for the entire portfolio is about 50% of S&P 500. This means that when S&P 500 drops by 50%, the portfolio will drop by 25%.

## Value if S&P 500 were to drops 50%: This is simply calculated by multiplying the Investment amount with “Drawdown Variance % with S&P 500”.

Concluding Remarks

The above portfolio is conservative and well diversified with exposure to different types of assets. In addition, it would provide a decent level of income in excess of 4.0%. Some folks may argue that 10% exposure to treasuries is not wise, especially if the interest rates were to rise further. We believe that may be true in the short term, but in the long term, it will balance the risks, especially in any kind of crisis situation.

To be clear, we are not recommending to anyone to just go out and buy these stocks in full positions today. Each individual should consider his or her personal situation, financial goals, and risk-tolerance before making any investment decisions. We believe this was a methodical way to demonstrate how to make a diversified, income-producing and drawdown-resistant portfolio that can serve well for the long term. It will be prudent to have a strategy, make some goals and be ready with an action plan. For example, buying a diversified and bear market-resistant portfolio in five separate lots, say one lot every quarter or six months, each time investing only 20% of the investment capital, should serve well in both a bear market and a bull market.

Disclaimer: The information presented in this article is for informational purposes only and in no way should be construed as financial advice or recommendation to buy or sell any stock. Please always do further research and do your own due diligence before making any investments. Every effort has been made to present the data/information accurately; however, the author does not claim 100% accuracy. The stock portfolio presented here is a model portfolio for demonstration purposes; however, the author holds many of the same stocks in his personal portfolio.

Disclosure: I am/we are long ABT, ABBV, JNJ, PFE, NVS, NVO, CL, CLX, GIS, UL, NSRGY, PG, KHC, ADM, MO, PM, BUD, KO, PEP, D, DEA, DEO, ENB, MCD, BAC, UPS, WMT, WBA, CVS, LOW, AAPL, IBM, CSCO, MSFT, INTC, T, VZ, VOD, CVX, XOM, VLO, ABB, ITW, MMM, LYB, HCP, HTA, O, OHI, VTR, NNN, STAG, WPC, MAIN, NLY, ARCC, DNP, GOF, PCI, PDI, PFF, RFI, RNP, STK, UTF, EVT, FFC, HQH, KYN, NMZ, NBB, JPS, JPC, JRI, TLT. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.