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<wyu[at]talisys.com> wrote
E wrote
- quote -

For the record, the 3.5% figure is from the Vanguard web
site's VGSIX report:
"The current unadjusted effective yield is 3.47% as of
02/28/2007, which includes the entire distribution (dividend
income, as well as return of capital and capital gain). The
current adjusted effective yield is 3.01% as of 02/28/2007,
which is the unadjusted yield reduced by an estimated return
of capital. The estimated return of capital, based on the
average weighted return of capital of all the REITs on the
Morgan Stanley REIT Index, for the past 2 calendar years is
10.62% in 2006 and 5.68% in 2005."

It's also consistent with VGSIX's main holdings, which tend
to be the less riskier REITs.

Yahoo's numbers for VGSIX's dividends of the past year also
support a contention the yield is currently closer to 4% or
so, depending on the share price. The share price varied
from about 20 to 27 in 2006 but the price is running notably
higher of late.

With the surge in REIT stock prices /in the last few years/,
yields on older, larger, reputable REITs are way down. I
know--I invest in large part for income and watch REITs
pretty closely as one part of my portfolio.

I would have to see a citation for your original statement:
"REIT funds. Average yields of 5% now... " REITs overall may
average 5%, but since I think REIT mutual funds tend to have
mostly more conservative REITs, I have my doubts the funds
are averaging 5%.

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On Mar 28, 4:26 pm, darknes...[at]yahoo.com wrote:


- quote -

That was his specific question (first post):

" I need some help! I have about $50,000 and it sitting in Emigrant
about 5% interest and I would like to get about 8% do anyone know a
good dividend mutual fund or stock?
Thanks for your help. "

He clearly asks for a good dividend fund or stock. I provided him
infor about 4 stocks, 2 of them were small caps but the other two were
mid and large cap stocks. Of course, I would never advice anyone to
put ALL his money in just four stocks, even if they provide a high
dividend income and this dividend income looks sustainable, according
with the public information available as of today.

I have some other large and mid cap stocks with a high, sustainable
dividend yield, he may wish to take a look at these. I carefully
researched these stocks myself to make sure that the companies look
great (again, according to the information available now):

http://stocks.us.reuters.com/stocks/...asp?symbol=WPS

Div yield: 4.2%, payout ratio: 65%, 5-yrs average earnings growth:
3.24% (it's an electrical utilities companies).

http://stocks.us.reuters.com/stocks/...asp?symbol=DTE

Div yield: 4.37%, payout ratio: 66.52%, 5-yrs average earnings growth:
4.09% (again, it's an electrical utilities companies).

http://stocks.us.reuters.com/stocks/...asp?symbol=KTC

Div yield: 6.63%, payout ratio: 67.83%, 5-yrs average earnings growth:
19.27% (this one is a foreign -Korean- telecom company).

- quote -

Right. That's why I gave him a list of 5 high dividend yield stocks
which are medium and large caps. Also provided him with 2 other high
dividend yield stocks which are small caps -TNP and PSEC- in case he
wants to take an extra principal risk associated with a higher return.
By the way, TNP is not so small anyway -market cap of $988 million as
of today-.

- quote -

Actually, 28 (and 7 mid and big cap value stocks, all of them with a
high dividend yield). I like dividend income as well, even if I don't
need it now or don't plan to need it in the near future. A high,
sustained and sustainable dividend yield is one of the best signals
that a stock may be undervalued.

- quote -

He asked for high dividend yield stocks, and that was my advice,
completely free of charge. Of course, he can take it of leave it, that
goes without saying...

On Mar 28, 1:19 pm, "Jose Bailen" <jose.bai...[at]gmail.com> wrote:
- quote -

No, he was asking about ways to increase his income from his current
deposit account, and noted that he is disabled.

and these ones are among the best of what I've
- quote -

You are not disabled and therefore presumably don't have a diminished
ability to earn labour income.

You are not concerned about short term preservation of capital value--
you want long term value growth. You've argued many times smaller cap
stocks are more risky.

You have a portfolio of 30 small cap value stocks.

You wouldn't put someone in his position into 2 or 3 small value
stocks, nor would you do so yourself.

On Mar 27, 5:59 pm, darknes...[at]yahoo.com wrote:

- quote -

ACAS has a market cap of $6.8 billion, and AINV of $1.8 billion, so
they are not exactly small caps. He is asking about good dividend
yield stocks or funds, and these ones are among the best of what I've
seen in the U.S. market.

I actually invested in these three stocks -they are part of my 35-
stock portfolio- and I did so because I think they are good bets (TNP
is also in my portfolio). A high dividend yield - IF sustainable- is
always a positive point when picking stocks.

On Mar 27, 2:37 pm, "Jose Bailen" <jose.bai...[at]gmail.com> wrote:
- quote -

Yes but for a disabled person with 50k to invest, I would never put
them into a limited group of small cap stocks.

Nor would you, if you have any ethical concerns.

On Mar 21, 10:53 am, "chris" <ctran...[at]hotmail.com> wrote:
- quote -

Some stocks with a high -and sustainable- dividend yield, of
undervalued companies with low price-to-book and price-earnings
ratios:

ACAS: http://stocks.us.reuters.com/stocks/...sp?symbol=ACAS

Dividend yield: 7.95%, P/E: 6.88, Dividend payout ratio: 50.73%, 5-yr
EPS average growth rate: 62.28%

AIC: http://stocks.us.reuters.com/stocks/...Nav-8-Overview

Dividend yield: 9.49%, P/E: 6.68, Dividend payout ratio: 60.79%, EPS
growth rate: 123.01%

PSEC: http://stocks.us.reuters.com/stocks/...Nav-8-Overview

Dividend yield: 9.20%, P/E: 8.98, Dividend payout ratio: 97.27%, EPS
growth rate: 10.28%

On Mar 27, 9:59 am, "Shhhh" <trumpet1...[at]comcast.net> wrote:
- quote -

Just googled this.

A covered call fund.

My understanding of the strategy is it writes call options against a
portfolio of stocks?

That means, if the stocks go up, the fund doesn't benefit?

If the stocks go down, the fund NAV will drop?

So you are taking on equity risk (on the downside) but not on the
upside (where you have essentially little or no upside)? Conversely
you do get an income.

Stock markets can, and do, drop 30% in a year. The SP500 has still
not reached the high it reached in 2000.

This is what I mean about risk and return being correlated.

Also volatilities are at historic lows right now, so I would imagine
income from writing calls is relatively low (the value of an option is
positively correlated with the volatility of the underlying stock).

The more I think about it, the more I think the OP should investigate
closed end municipal bond funds. The after tax returns, assuming he
is in the same state, could be quite attractive (for a higher tax
bracket payer).

Conversely such bonds are often insured to give them AAA credit
ratings, and the portfolios are usually well diversified. In extreme
financial circumstances (such as a radiological bomb attack on Wall
Street), it is possible, even likely, that the Federal government
would step in and make good the municipal debts. Although New York
City teetered on the edge of default in 1975, it did not actually go
bust, as I recall.

(I might feel slightly different about Michigan bonds. My impression
is Michigan, or rather the domestic US auto industry, really is in the
schtook, and I don't know if the rest of the State has a sufficiently
diversified economy to compensate).

These closed end funds were discussed on CNBC today. they are what I
would consider to be "sophisticated instruments" but they all have
dividend yields north of 8.5%.

BEP
ECV
RCC

Just something to broaden your options a bit. I personally own BEP and
RCC, very happy with them.


Hope this helps,
Shhhh

<darkness39[at]yahoo.com> wrote in message
news:1174914966.705518.75080[at]n76g2000hsh.googlegroups.com...

- quote -

The Canadian income trust fiasco is an excellent example of failure to
realize that yield and risk go together. These products were promoted as
yielding 10% or 15% or more in a period when bank rates were low and people
on fixed incomes needed help. And it turned out in many cases that the
promised yields did work out for a while.. The big monthly checks kept
coming, but nobody paid much attention to NAV's and what would be left if
and when the product were sold. Personally, I would prefer to keep the money
under a mattress and take out 15% every year.

On Mar 21, 9:53 am, "chris" <ctran...[at]hotmail.com> wrote:
- quote -

Chris

To achieve much over the current market rate (about 2% yield) you are
going to have to take risks. Risk and return come with each other,
and the market has been chasing yield for so long that there are few
cheap plays.

Some suggestions for improving income:

- a large cap value fund (like a Vanguard Index fund). You will get
about 3% yield, and that yield will, most likely grow about 2-3%
faster than inflation, over time. Right now it's growing a lot faster
than that. Say it grows at 7% a year, then in 10 years your income
will have doubled.

Vanguard has an equity income fund as well. What you want are low
costs and a spread of investments

- a small cap value fund. Much more likely to be volatile, dividend
income is likely to be more risky.

The 15% tax rate on dividend income means your after tax position
could be a lot better than your after tax position investing in bonds.

A balanced fund like Vanguard Wellington might be a reasonable
compromise

- REITs - I think REITs are overvalued right now. Commercial property
usually performs in cycle with housing prices, with a 1 to 2 year
delay. REITs normally trade at a discount to NAV, they are mostly
trading at premiums right now.

- tax exempt municipal bond funds (closed end eg Nuveen, or open
ended). Depending on your tax position, your *after tax* income
position could be quite good with these.

- high yield (junk) or emerging market bond funds - I would avoid
these. History has shown the risks don't outweigh the rewards,
particularly not at the end of the economic cycle. The time to buy
these is when all is panic, not when they are trading at the lowest
spreads ever over US treasury bonds.

Note closed end bond funds can have leverage. This can increase
returns, it can also increase risk (volatility of NAV). If you go
into these, you want funds that are mainly invested in A or above
quality credits.

- covered call funds. I don't know a lot about these.

- Master LPs - I don't know enough about these. Canadians had income
trusts, but then the tax law changed and investors lost billions.
Many were quite low quality, and ran into trouble in terms of
maintaining their dividends. The same could happen, I would guess, in
MLPs.

I would favour investing in a large cap value fund, and even selling
some of my capital if I needed more money than the fund could produce.

Over the long run, dividends are a lot less sensitive than NAVs. A
large cap value or equity income fund should pay out a consistent, and
growing, dividend yield over time.

On Mar 25, 6:39 pm, "Ron Peterson" <r...[at]shell.core.com> wrote:

- quote -

I have some stock in TNP as well, and I think that it is an excellent
choice: besides the high dividend yield, the company is clearly
undervalued (P/B of just 1.31), with lots of cash (it covers 3 years
of dividends), excellent growth -both recently and in the past 5-yr
period, and a payout ratio of just 22.8%:

http://stocks.us.reuters.com/stocks/...tNav-16-Ratios

On Mar 21, 3:53 am, "chris" <ctran...[at]hotmail.com> wrote:
- quote -

I have some stock in TNP which has a 5.9% forward yield and has high
earnings now so the assets aren't being depleted by the dividends.
It's a small oil shipping company, so don't take to big of a risk.

--
Ron

- quote -

Bond Guru Bill Gross of PIMCO has recently put in a good word for closed
end bond funds that invest in municipal bonds. Don't know the original
poster's tax bracket, but he should run the numbers to calculate the
equivalent taxable yield. (Search for closed end funds at
www.etfconnect.com.) If he's in the 33 percent federal bracket, he could
probably get an equivalent taxable yield of about seven percent. If he's
in a high tax state and he finds a fund that's double-tax-exempt for him,
then he'd be close to the eight percent yield that he's looking for.

On Mar 22, 2:31 pm, "Elle" <honda.lion...[at]nospam.earthlink.net> wrote:
- quote -

Not really a big deal. etfconnect.com lists all ETFs + closed-end
funds, their yields, premium/discounts, etc. I've been looking for
international bond funds to diversify my bond allocation without much
luck until I decided to look at closed-end funds. Through etfconnect,
I found a few closed-end intl bond funds in the 6.5%-8.5% yield based
on the current discount/premium w/ ~1% expense ratios.

- quote -

Yes, that was just a little snippet about the possibility. I don't
have any MLPs myself and only looked at it a little. I decided against
it because there's a limit on distributions that can be sheltered in
an IRA which is where I hold all my stocks/etfs/closed-end funds. On
the otherhand, I read some tax snippet where much of the dividends can
be added back into the cost basis so it gets long term capital gains
treatment outside of an IRA. I may look at this more later in the
future.

- quote -

I know websites show lower numbers but I hold VGSIX and my dividends
last year was a whopping 6% based on the share price on the ex-
dividend date (whopping as in bad because I hold it in a taxable
account). Since then, the share price is up about another 5% which
decreases the yield by a touch.

- quote -

Wisdomtree high yield/small cap/sector ETFs are 4+. Their regular
large caps are in the mid 3s. DVY/SDY/VYM are high 2s to low 3s.

On Mar 21, 8:15 am, "joeNOS...[at]bea.com" <joe.weinst...[at]gmail.comwrote:
- quote -

Thank you, I don't need the money right now. I am disable so I want
some income.

<wyu[at]talisys.com> wrote
- quote -

Sounds tricky to me.

- quote -

I realize wyu likely was posting off the top of his head,
just to get down some generalities. The above is not
necessarily wrong. But I think a little elaboration is
appropriate here.

-- The MLPs available are overwhelmingly young. I'd say
something like 90%
of them are under eight years old, from a quick check of the
few dozen listed at
http://www.galttech.com/research/fin...-partnerships-... .
So I can't get much of a feel for how they do against, say,
the S&P 500, as far as principal growth is concerned. Not
having that history denotes risk, to me.
-- MLPs are not terribly liquid. Their trading volume is
typically a tenth or less of a blue chip stock.
-- MLP dividends do not necessarily keep up with inflation,
though with some notable exceptions, like TPP.
-- MLP evidently were vulnerable to scandal in the 1980s.
Anyone buying individual MLPs today should study that period
and make sure they understand the problems that existed in
the 1980s do not exist today.

- quote -

That would surprise me, based on how high REITs are lately,
and the fact that VGSIX is yielding about 3.5% now.

- quote -

Closer to 3%, I think.