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Investing in the Market's Sweetspot
08/15/2014 6:00 am EST
Veteran investor Mark Skousen says that dividend-paying stocks are still the best place to be and recommends a few of his favorites in this category.
SPEAKER 1: Hi. I’m here today with Mark Skousen, editor of Forecasts and Strategies. We’re going to talk about income investing and some dividend stocks. Are dividend stocks still the place to be for investors right now?
MARK SKOUSEN: It really is still in the sweet spot. The Feds keeping interest rates at practically zero and yet you continue to earn five, six, even double-digit yields on oil and gas companies, on real estate investment trusts. Sometimes leverage is involved so there is a little bit of risk and when interest rates go up watch out because some of these mortgage rates and so forth, they’re going to drop; muni bonds, and that sort of thing; closed-in bond funds, they’re going to drop very sharply. You need to be careful. I don’t see interest rates rising anytime soon, so this is going to continue to be the sweet spot and I have a lot of great recommendations and forecasting strategies. We focus a lot on income investing.
SPEAKER 1: Are there a couple of stocks right now that you like that people could consider?
MARK SKOUSEN: I love Main Street Capital, MAIN, very easy to remember. This is a business development company, kind of a private equity. It finances family-owned businesses. What’s good about Main Street, it pays monthly dividend, rising dividend policy, plus special dividends twice a year, so it’s a great story.
SPEAKER 1: What yield is it making?
MARK SKOUSEN: About 6%, so it’s not bad. It’s a good time to be buying.
SPEAKER 1: Some outside growth there also?
MARK SKOUSEN: Yeah, no absolutely. It has been growing 30% a year so hopefully that will continue.
SPEAKER 1: Fantastic; and the other one?
MARK SKOUSEN: The other one is Omega Healthcare Investors, a nursing home Real Estate Investment Trust; rising dividend, about 5.3%. What I like about Omega is that it is in the sweet spot also of healthcare, nursing homes. We’re an aging population. The baby boomers like me and you – well maybe not you, but me – we’re looking at a lot of demand for nursing homes. I like that one a lot. Enterprise Products Partners, EPD, a limited partnership; rising dividend policy. A wonderful stock, a Houston-based pipeline company that I like a lot too.
SPEAKER 1: How much of one’s portfolio or assets should people consider ______.
MARK SKOUSEN: I think all your investments should be income oriented rather than the growth stocks. Right now it’s the best place to be and so you should have at least 20 of these stocks in there, maybe some mutual funds or ETFs and that sort of thing. A well-diversified portfolio and income investing is the way to go right now in my opinion.
SPEAKER 1: Thank you, Mark. Thanks for joining us at moneyshow.com.
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