The market swooned today, and I took an opportunity to buy into Kinder Morgan, Inc (KMI) at $38.50/share.
I especially like buying into today’s market because Kinder Morgan just went ex-dividend about a week ago. Although I like collecting dividends, buying just after an ex-dividend at an even lower price after subtracting the dividend is a good way to buy shares. I got the dividend by a lower buy-in price, which is even better than a payment.
Here’s a summary of the performance of my portfolio for 2011.
For 2011, if the company was boring, has an unloved business model or product, or had a decent, sustainable yield investors bought it. Did investors simply wake up and decide that all of these companies should be bought? I think that is part of it, not because the professionals have any particular sound valuation methodology. They are simply following the smart money. And the smart money has been saying to buy yield. Wall street is broken up into two camps:
- Top 5%, leader (e.g. Goldman Sachs during the crisis)
- 95%, everyone else who follows the momentum.
This portfolio, named ‘Tax Deferred Without An IRA’ contains investments that defer taxes. You might think that this isn’t possible because you need a sheltered account, such as a ROTH IRA, 401(K), or one of the other many retirement and college savings accounts. While the investments provide tax deferment, note that this doesn’t not mean tax avoidance.
On SixFigure, we will publish portfolio ideas that you can use to invest. Each one has a specific goal and strategy. This is the first one, called the ‘Get Paid Monthly’ portfolio. It’s a good place to start if you are new to investing.
For the ‘Get Paid Monthly’ portfolio, as the title suggests, you get paid monthly. This is a confidence inducing portfolio because it is made up of investments that are primarily focused on the shareholder by providing a consistent, if slower growing return that you can use as a starting point in your investing.
You will earn money very quickly because the dividends are paid monthly. For publicly traded companies this is an extra burden from a paperwork point of view, but they make the effort. Mostly companies pay dividends quarterly (4 time a year) or biannually (2 times a year, usually foreign companies).
- Atlantic Power Corp. (NYSE:AT) (dividend yield: 8.0%) Atlantic Power Corporation owns interest in various power projects and a transmission line in the United States. Its portfolio of assets consists of 13 operational power generation projects with approximately 878 MW generation capacity; a 500 kilovolt 84-mile electric transmission line in California; a biomass project under construction in Georgia; and various development stage generating projects. The company also sells steam under sales agreements to industrial purchasers. It serves various utilities and other parties under power purchase agreements. The company was founded in 2004 and is headquartered in Boston, Massachusetts.
- Realty Income (NYSE:O), (dividend yield: 5.3%) Realty Income Corporation engages in the acquisition and ownership of commercial retail real estate properties in the United States. The company leases its retail properties primarily to regional and national retail chain store operators. As of December 31, 2006, it owned 1,955 retail properties located in 48 states, covering approximately 16.7 million square feet of leasable space. The company also held a portfolio of 60 properties through its wholly owned subsidiary, Crest Net Lease, Inc. (Crest), as of the above date. Realty Income Corporation has elected to be treated as a real estate investment trust (REIT) under the Internal Revenue Code. As a REIT, it would not be subject to federal income taxes provided it distributes at least 90% of its taxable income to its shareholders. The company was founded in 1969 and is based in Escondido, California.
- Eaton Vance Municipal Bond Fund (AMEX:EIM) (dividend yield: 7.5%) Eaton Vance Insured Municipal Bond Fund is a close ended equity mutual fund launched and managed by Eaton Vance Management. It invests primarily in high grade municipal obligations. The funds investment portfolio primarily includes investments in companies operating in the transportation, water and sewer, and electric utilities sectors. Eaton Vance Insured Municipal Bond Fund was founded in 2002 and is based in Boston, Massachusetts.