After carefully reviewing the portfolio comparison between DSE, GER, and KYN I have decided that there isn't enough pipeline exposure in the current candidate list. GER is being replaced by the Tortoise Pipeline & Energy Fund (NYSE:TTP) to correct the imbalance. In spite of a "less than desirable" 11.5% allocation to oil & gas production TTP offers superior exposure to the pipeline industry.
Information on the Tortoise Pipeline & Energy Fund can be found at this link.
Information on the other possible closed-end MLP contrarian candidates are at these links:
Duff & Phelps Select Energy MLP DSE
Kayne Anderson MLP KYN
I'll keep you posted as I continue the process of choosing the 2018 MLP closed-end fund contrarian portfolio.
2017 has been a brutal year for master limited partnership (MLP) closed-end funds. Year to date, no closed-end MLP is showing positive returns. While I will steer away from energy exploration and producing MLPs I am growing interested in the MLPs that concentrate on pipelines and mid-stream assets. Near the end of 2017 I will look to see if tax loss selling has created an even better buying opportunity.
At this point I am most closely watching DSE, GER, and KYN as possible investments.
Till then, cash is a position too!
Buy and hold investors will tell you it's impossible to beat the market, so just buy a cheap index fund and sit back and watch.
The problem with that is while you'll likely increase your portfolio value, the odds are slim that you'll reach a comfortable retirement without investing significant additional capital. The following chart shows that $10,000 invested in 1995 in a well known S&P 500 index fund (VFINX) resulted in $85,011 (If compounded in a tax deferred account). That's a nice sum, but if you're really frugal it might get you through a year of retirement in 22 years.
On the other hand, using a simple relative strength timing model in conjunction with the T. Rowe Price International Discovery Fund (PRIDX) and the Rydex 1.2x Government Bond Fund (RYGBX) turned $10,000 into $1,003,698.
Will the next 22 years produce the same results? Probably not! The returns could be higher or lower. But, wouldn't you rather work with a plan that has a 22 year history of significant out performance? I'll post how it was done right before Christmas.
30% T Rowe Price Emerging Markets Bond Fund (PREMX)
30% T Rowe Price International Discovery Stock Fund (PRIDX)
40% Rydex Government Long Bond Fund (RYGBX)
11.57% CAGR since 1995 Maximum drawdown (monthly basis) -20.53%
The 60/40 investing rule says you should have 60% of your portfolio in stocks and 40% in bonds. For those who can stomach the drawdowns, how about 60/40 investing on steroids? Using 2x leveraged ETFs 60% SSO / 40% UBT (Re-balanced annually)
21.44% CAGR since inception, 13.33% maximum drawdown.
Wilshire 5000 Total Market Index©/Gross Domestic Product is now 20% higher than it was at the peak of the dot com boom.
The S&P Small Cap 600 Index closed below its 200 day simple moving average on Friday. Small caps aren't the place to be! I'm a "perma bull", but cash is a position too!
Time to exit my health care contrarian bet from 12/29/2016. Building up cash for new opportunities!
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William "David" Wedeking - President of Jade Reserves, Inc. and publisher of Sensible Speculation