Again, Time to Worry a Bit
By: Tim McPartland,
Back on September 11th we wrote ‘Now is a Good Time to Worry a Bit‘ – little did we know that we would feel more negative now then we did at that time.
September has been a tough month for income investors. Even though interest rates are up just a bit in the last 30 days many sectors of the income investing world have been sold down hard. Of course many energy related MLP’s have tumbled as crude oil prices trade at the lowest level in almost 2 years. We have noted a number of days during the month where 10 or more MLP issues fell by 3% or more. Some tumbles are created by announcements of secondary offerings, while others are because of the obvious damage that lower oil prices will do to the energy arena.
REITs finished their worst quarter in the last year (mostly because of interest rate worries). Our observations tell us that financially most REITs are performing well–just the same they were sold down.
Now on top of the actual market fundamentals we have ISIS knocking on the door of Baghdad and our first case of Ebola in the U.S. Most normally I would think these would be non-issues, but with the continued deterioration of the political scene in this country one has to wonder when we are going to have a real blow-up of one of these issues. Whoa is me.
Back to Investing
Tomorrow we have the release of the ADP employment report for September as well as other minor economic releases and then on Friday we have the employment release from the Census Bureau. As is normal the only reports that counts are the ADP employment release and the census bureau employment report on Friday and honestly we would be surprised if the marekt reacted too strongly to these reports. The geopolitcal events are likely to overshadow everything else for the balance of the week.
As noted last week we looked at selling Transcanada (ticker:TRP) and B&G Foods (ticker:BGS) and in fact sold Transcanada today. We put the proceeds to cash. We have decided to hold B&G Foods–David Wenner is such a good CEO that we believe the company is in good hands (or are we blind?) and it pays a nice 4.8% dividend.
We ended September with a 9.75% YTD gain and looking ahead to October we see it will be another good income month for us. If we were able to get through October with our 9.75% YTD gain (meaning we received .65% of dividends and lost that much in share value) we would be quite happy.