High-Yield Income Bonanza - The Top 10 Very High-Yield Income Investments
Many investors are searching for the holy grail in income producing stocks and funds.
Unfortunately, it is not always about just scanning for very high-yield stocks or funds.
This is because many of those high-yielders can be very risky and will ultimately lose more in appreciation then you make in income.
I have developed some very important scanning criteria that help minimize the appreciation risk while also providing the huge upside while getting high-yield dividends.
The biggest criteria by far is the trend of the market.
It is critical, as with all investments, to be on the right side of the market in the timeframe that you are investing or trading.
Therefore, when I scan for these special high-yield investments, I am looking for good values during market pullbacks or relative strength stocks in times of uptrends.
It is essential to look for momentum and relative strength in uptrends and as much valuation cushion underneath you during downtrends.
In addition, just as I do with my general stock scans, it is important to identify hot sectors or macro-trends that will favor growth for these high-yield income investments.
No matter what, while the income is desirable, it is ultimately the appreciation that provides the biggest payoff if you can buy the right stocks or funds at the right time.
For example, many high-yield income stocks (>7% yield) created capital appreciation over 50% and some over 100% since the March 2009 recovery bounce.
Learning how to do market timing, read charts, and perform rudimentary fundamental analysis is not something everyone is interested in.
However, if you are willing to do learn the basics and to make sure the market is moving up when you invest, and that the market and stocks are fairly valued, then you are well on your way to see huge gains in your investing account.
In this article, I am going to make it easy for you.
The current S&P 500 market has the most conservative forward earnings projections of at least $98 for early 2012.
That means that with a fair value market PE of 15, the upside market target could go as high as 1470.
Furthermore, many markets bottom in September and end the year with a strong three-month rally after a bad August.
That is what history has shown us 9 out of 10 times that the market had losing August returns in the last 30 years.
Finally, now that you know the chances are on your side for an end-of-year rally and that the market is under-valued, I wanted to look for undervalued stocks and funds with good upside potential.
The following 10 investments met my proprietary scanning criteria.
In fact, TNH was one of my top recommendations for 2011 and beyond with a huge gain already through August, 2011.
It has been climbing even with the market falling.
That is the sign of a very strong investment idea.
The Top 10 High-Yield Income Funds and Stocks for Growing Your Retirement: 1) BPT - BP Prudhoe Bay Royalty Trust (PE < 12; 9.
6% yield) 2) ETP - Energy Transfer Partners (PE < 14; 8.
2% yield) 3) FMO - Fiduciary-Claymore MLP Oppty (7.
0% yield) 4) HYG - iShares iBoxx High Yield Corp Bond (7.
8% yield) 5) JNK - SPDR Barclays Capital High Yield Bond (8.
1% yield) 6) JQC - Nuveen Multi-Strategy Income & Growth (9.
3% yield) 7) NLY - Annaly Capital Management Inc (PE < 6; 14.
4% yield) 8) PGF - Powershares Financial Preferred (7.
3% yield) 9) PHK - PIMCO High Income Fund (11.
6% yield) 10) TNH - Terra Nitrogen Co LP (PE < 10; 8.
4% yield) This list is only a small portion of the stocks and funds I identified with upside potential but it certainly represents a solid and diversified list of income instruments with both growth potential and some safety.
Remember, all high-yields are not created equal and some are even very risky.
This list would serve anyone well that is interested in a high-yield bonanza for years to come.
Unfortunately, it is not always about just scanning for very high-yield stocks or funds.
This is because many of those high-yielders can be very risky and will ultimately lose more in appreciation then you make in income.
I have developed some very important scanning criteria that help minimize the appreciation risk while also providing the huge upside while getting high-yield dividends.
The biggest criteria by far is the trend of the market.
It is critical, as with all investments, to be on the right side of the market in the timeframe that you are investing or trading.
Therefore, when I scan for these special high-yield investments, I am looking for good values during market pullbacks or relative strength stocks in times of uptrends.
It is essential to look for momentum and relative strength in uptrends and as much valuation cushion underneath you during downtrends.
In addition, just as I do with my general stock scans, it is important to identify hot sectors or macro-trends that will favor growth for these high-yield income investments.
No matter what, while the income is desirable, it is ultimately the appreciation that provides the biggest payoff if you can buy the right stocks or funds at the right time.
For example, many high-yield income stocks (>7% yield) created capital appreciation over 50% and some over 100% since the March 2009 recovery bounce.
Learning how to do market timing, read charts, and perform rudimentary fundamental analysis is not something everyone is interested in.
However, if you are willing to do learn the basics and to make sure the market is moving up when you invest, and that the market and stocks are fairly valued, then you are well on your way to see huge gains in your investing account.
In this article, I am going to make it easy for you.
The current S&P 500 market has the most conservative forward earnings projections of at least $98 for early 2012.
That means that with a fair value market PE of 15, the upside market target could go as high as 1470.
Furthermore, many markets bottom in September and end the year with a strong three-month rally after a bad August.
That is what history has shown us 9 out of 10 times that the market had losing August returns in the last 30 years.
Finally, now that you know the chances are on your side for an end-of-year rally and that the market is under-valued, I wanted to look for undervalued stocks and funds with good upside potential.
The following 10 investments met my proprietary scanning criteria.
In fact, TNH was one of my top recommendations for 2011 and beyond with a huge gain already through August, 2011.
It has been climbing even with the market falling.
That is the sign of a very strong investment idea.
The Top 10 High-Yield Income Funds and Stocks for Growing Your Retirement: 1) BPT - BP Prudhoe Bay Royalty Trust (PE < 12; 9.
6% yield) 2) ETP - Energy Transfer Partners (PE < 14; 8.
2% yield) 3) FMO - Fiduciary-Claymore MLP Oppty (7.
0% yield) 4) HYG - iShares iBoxx High Yield Corp Bond (7.
8% yield) 5) JNK - SPDR Barclays Capital High Yield Bond (8.
1% yield) 6) JQC - Nuveen Multi-Strategy Income & Growth (9.
3% yield) 7) NLY - Annaly Capital Management Inc (PE < 6; 14.
4% yield) 8) PGF - Powershares Financial Preferred (7.
3% yield) 9) PHK - PIMCO High Income Fund (11.
6% yield) 10) TNH - Terra Nitrogen Co LP (PE < 10; 8.
4% yield) This list is only a small portion of the stocks and funds I identified with upside potential but it certainly represents a solid and diversified list of income instruments with both growth potential and some safety.
Remember, all high-yields are not created equal and some are even very risky.
This list would serve anyone well that is interested in a high-yield bonanza for years to come.
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