A Sensible Income Strategy For This Market With Arturo Neto (Podcast)

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About: EPR Properties (EPR), FEMB, MHI, O, Includes: FMB, VNQ
by: SA Marketplace Roundtable Podcast
Summary

It's possible to build a true income generating strategy in this low rate environment without taking on too much risk.

In his nearly 20 years of investing, Arturo Neto has seen pretty much every type of market environment.

His approach - which combines bottom up and top down analysis - is all about generating a reasonable yield and managing risk simultaneously.

He walks listeners through his strategy and explains his broader view of the current macro environment in the latest edition of the Marketplace Roundtable Podcast.

By Jonathan Liss

Listen and subscribe to the Marketplace Roundtable on these podcast platforms:

Arturo Neto, CFA has seen this movie before. He graduated business school just as the dot-com bubble was starting to deflate. "When I graduated from Darden (the University of Virginia's business school), many of us had our offers reneged or postponed." He persevered in his goal of working in the financial services space and several years later was put in charge of a large family office with several hundred million dollars under management. It was Arturo's first foray into managing large sums of other people's money and he started to develop his own disciplined approach to asset management.

Fast forward nearly a decade to late 2016. Arturo was fired from HSBC for contributing articles to Seeking Alpha. "It's kind of ironic if you think about it," he quips. The dismissal finally allowed him to take a chance on doing what he loves - building well-balanced portfolios that help individuals reach their financial goals while being able to sleep at night. He started his own RIA, NFG Wealth Advisors, and a few months later, he launched his Seeking Alpha Marketplace service, The Income Strategist, allowing him to do just that. "What I'm doing at Seeking Alpha is really an extension of everything I'm doing at my RIA," explains Arturo, "but for DIY (do it yourself) investors".

Lest readers think this is a one-way street, Arturo is grateful for all he has learned from Seeking Alpha's community of investors. "It's always intellectually stimulating to read the comments and to enter into dialogue with Seeking Alpha readers. It's impossible to know everything. When you have such an active community, it's a valuable research resource."

Topics covered

  • 2:30 - Relevant Bio - from dot-com bubble business school refugee to running his own RIA
  • 7:30 - Arturo's overarching investment strategy - top down and bottom up
  • 10:30 - The outlook for interest rates and what that means for yield
  • 14:30 - What does the inverted yield curve mean for how Arturo is positioning client portfolios
  • 16:30 - Searching for reasonable yields without taking on too much risk
  • 23:30 - Fixed income asset classes Arturo is currently bullish or bearish on
  • 26:30 - Dividend stocks as an asset class - locating the "sweet spot"
  • 28:30 - Drilling into specific income investing ideas:
    • 29:00 - Emerging Market debt via the First Trust Emerging Markets Local Currency Bond ETF (FEMB)
    • 31:30 - Muni bonds via the Pioneer Municipal High Income Trust CEF (MHI) and the First Trust Managed Municipal ETF (FMB)
    • 33:30 - REITs Arturo is currently bullish on: Realty Income Corporation (O) and EPR Properties (EPR).
  • 40:00 - Seeking Alpha's community is a valuable research resource

Listen to the full conversation by clicking play above - and as always, please weigh in with your comments and questions for Arturo below.

Disclosure: I am/we are long FEMB, MHI, FMB, EPR. 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.

Additional disclosure: Arturo Neto is currently long (for himself or his clients) FEMB, MHI, FMB and EPR. Jonathan Liss has a long position in VNQ.