Research Articles

Addendum To: Look At These Juicy Yields - Are They Really Appropriate For Your Retirement Portfolios?

Chuck Carnevale - Thursday, September 11, 2014

In my recent article “Look At These Juicy Yields - Are They Really Appropriate For Your Retirement Portfolios?” I provided examples of various high-yielding equity income vehicles in order to raise the reader’s awareness of the true attributes and merit of each.  The real point behind the article was to suggest that investors look beyond a high current yield when choosing income-producing investments for their retirement portfolios.

The samples that I presented were simply representative of the specific type of equity that was being discussed.  I was not recommending, nor was I suggesting that any equity type was inappropriate for retirement portfolios.  Instead, I was suggesting that prospective investors be aware of the potential fundamental attributes of each.  Therefore, I presented long-term earnings and price correlated graphs on each. 

I believe you can learn a great deal from the past, but I also believe we can only invest in the future.  In this regard, knowing how a business has historically performed can provide important clues as to how it might perform in the future.  Of course, a company can change and create a future that might be entirely different than its past.  This is why comprehensive research and due diligence is so important. 

In the comment thread one reader objected to the BDC choice that I included in the article, because he felt it misrepresented BDCs in the general sense because it was the lowest performer.  He further suggested that the BDC Main Street Capital Corp (MAIN) would have been a better choice or he suggested Prospect Capital Corp (PSEC).

This brings up an important point.  As I have often stated in the past, not all companies are the same, and that it is a market of stocks and not a stock market.  In the article referenced above I tried to include examples of very successful high-yielding equity types, as well as some that were not successful.  The objective was to encourage retired investors to look beyond yield by digging deeper into the fundamental attributes of any company they were considering. 

Consequently, I offer this addendum to the article that produces earnings and price correlated FAST Graphs™ on the BDCs MAIN and PSEC.  These companies have relatively short track records as public companies.  Clearly MAIN has been one of the best performing BDCs.  However, I did not utilize it because I felt it did not adequately reflect the true nature of the industry.  The reason I offer it here is to illustrate that it is possible to find good, bad or even ugly companies in every sector or class. 

Prospect Capital Corp

Performance with Dividends Declared but Not Reinvested

Performance with Dividends Reinvested At the End of Each Quarter (EOQ)

Main Street Capital Corp

Performance with Dividends Declared but Not Reinvested

Performance with Dividends Reinvested At the End of Each Quarter (EOQ)

(End of Instablog)


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"Chuck - Thank you for your well thought out articles. I tend to be a visual type of person so I really appreciate the F.A.S.T. Graphs™ approach."


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“Your F.A.S.T. Graphs™ put all of this in a single artful picture and the accompanying spreadsheets hammer home the point.”


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Testimonials


“I appreciate your work, Chuck. As a subscriber to FAST Graphs™, I use the tool to decide on whether to purchase additional shares of what I currently hold or to add a new holding. Your articles help me make full use of the tool and give other readers valuable information, if they take the time to learn. One of the biggest enhancements that I use is the FFO data added for MLPs and REITs.”


“When FAST Graphs™ were unavailable because of Hurricane Sandy, I realized how much I need them in order to make investment decisions.

(Wish I could be) Long FAST Graphs!!!”


“One more vote for the value of FAST Graphs™; just started a subscription to Chuck's great service (premium), and am having a ball analyzing so many stocks quickly.”


“I feel very ill-equipped to make investment decisions without Fast Graphs. :-)”


“Yesterday, I signed up for your F.A.S.T. Graphs™. It's a really amazing, valuable tool for checking over/undervaluation of stocks. Wish I had it years and years ago!!”


“Love the F.A.S.T. Graphs™: One glance and you know a whole lot.”


“About Chuck's F.A.S.T. Graphs™: They are invaluable to me in making decisions about the stocks I own (in addition to what you are saying about doing other research) and the ones I hope to own in the future.”


"Chuck -- Your proprietary F.A.S.T. Graphs™ are a VERY impressive tool!"


“If there were an Investor Hall of Fame for people who have helped others with their investing, and sharing valuable information, you and your F.A.S.T. Graphs™ would get one of my selections.”


“I love Chuck's F.A.S.T. Graphs™! Well worth the price of admission for what he gives you.”


"Chuck - Thank you for your well thought out articles. I tend to be a visual type of person so I really appreciate the F.A.S.T. Graphs™ approach."


"Great article, as always! I always look forward to your articles, and am especially eagerly awaiting your next in this series. I find the F.A.S.T. Graphs™ extremely helpful."


“Your F.A.S.T. Graphs™ put all of this in a single artful picture and the accompanying spreadsheets hammer home the point.”


“I use the F.A.S.T. Graphs™ method to evaluate all of my ideas. I recommend it for individual investors, since it helps them focus on data and get past the many emotional arguments.”


“I recently subscribed to the F.A.S.T. Graphs™, and these articles are helping me learn how to better use them. They really do give you a good quick look at the valuations picture. A much needed tool!”


“I also always appreciate the clear-cut information provided through your F.A.S.T. Graphs™ and articles.”


“Thanks, Chuck, for your F.A.S.T. Graphs™. Each of these graphs is worth 1,000 words in describing a company's growth, consistency and valuation. Thanks for sharing your graphs.”


“Thanks, Chuck. Love the F.A.S.T. Graphs™! It makes investing so much more clear.”


“Chuck's F.A.S.T. Graphs™: They are invaluable to me in making decisions about the stocks I own (in addition to what you are saying about doing other research) and the ones I hope to own in the future.”


”I am amazed at the usefulness of your F.A.S.T. Graphs™ and I plan on using them for a long time to come.”


“Chuck's F.A.S.T. Graphs™ will give you a tool to find those well chosen stocks...”


“Thanks for the F.A.S.T. Graphs™, Chuck. They are the best tool I've used.”