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Steelpath

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Steelpath

  1. 1. SteelpathAuthor: Jim KnightHow to Find MLP and REIT Values in Exchange Listings?A MLP is a limited partnership that is publicly traded on a securities exchange such as theNYSE, Alerian Exchange, and NASDAQ. MLPs combine the tax benefits of a limitedpartnership with the liquidity of publicly traded securities because it is listed on a stockexchange.On the other hand, REITs are unit trust funds that may be unlisted or listed on the stockexchange. These trust funds invest primarily in income-producing real estate andcompanies whose principal assets comprise of real estates. Dividends are given out tothe unit holders from the income generated from the real estate and companies. Due tothe trading activity of REIT on stock exchanges, unit holders benefit from capitalappreciation caused by the price changes.For investors who have a fear of partnerships in general, it is important to know thatMLPs are regulated by the Securities and Exchange Commission (SEC) and must complywith Sarbanes-Oxley. This feature is very much similar to publicly traded companies.MLPs have to file annual and quarterly statements, notify investors of any materialchanges that affect the business, and are mandated to utilize enhanced accounting rulesas enacted by Congress which in turn is a very attractive proposition for investors.
  2. 2. Companies that receive 90% or more of their income from interest, dividends, real estaterents, gain from the sale or disposition of real property, income and gain fromcommodities or commodity futures, and income and gain from mineral or naturalresources activities are included in the MLP structure according to the NationalAssociation of Publicly Traded Partnerships.Leaving out a few exceptions, lions share of the MLPs operates in the energy industry.MLPs operate in segments that are mostly involved in usage of natural resources. Thisfocus on a particular industry derives from a certain section of the US tax code.In order to find out about the best MLPs around, one must try screening. Stock screenersare programs available on financial sites. This program allows an individual to search theentire market for stocks to meet their particular requirements.REITs are mostly in possession of rental properties. Therefore, a major portion of theincome generated by REITs comes from rents. REITs invest in shopping malls, officebuildings, apartments, warehouses and hotels. Some REITs are willing to investspecifically in one area of real estate, for example, shopping malls. These are theproperties from which the REITs obtain their rental income.REITs make it possible for people who are interested in investing to pour funds in biggerproperty with small capital and less time commitment. Due to tax incentives andregulations, REIT usually pays out at least 90% of its taxable profit to its unit holders.With the basic understanding of structure and format of REITs, anyone one can analyzehow they work and how individual REITs operate better.To find out the most preferable REITs, one must also try stock screeners. After puttingdown the desired parameters such as trading volume, growth, dividend growth etc in thescreeners program, one might be able to locate the right REIT. This process saves a lot oftime, which can be wasted in the tedious data mining process of the entire market.The Best Periodicals for Investment News and Advice"October: This is one of the peculiarly dangerous months to speculate in stocks. Theothers are July, January, September, April, November, May, March, June, December,August and February." - MarkTwain (1835-1910), legendary American novelist and humorist.As is quite clear from the quote above, investment is a risky business. However, with theproper guidance, it can be extremely rewarding. After all, with inflation, money keptunused is money wasted - one year from now, a dollar will buy you less than what itwould buy today. In other words, investing is a necessity, not a luxury.The first thing you need to determine is your investment objective. As a successfulinvestor once said, "An investor without investment objectives is like a traveler without a
  3. 3. destination." Unless you know where you want to be, and when, you will never know howto get there. For example, if you are investing money for the short term, say yourdaughters marriage in three years, it may be risky investing in stocks. On the otherhand, if you have a long investment horizon, equity investing makes the most sense.The second thing to remember is not to be swayed by temporary trends. That is what ledto the dotcom boom, that is what led to the sub-prime mortgage crisis. Invest insomething you truly believe in. As legendary investor and one of the richest men in theworld Warren Buffet says, "Only buy something that youd be perfectly happy to hold ifthe market shut down for ten years."That being said, you need the right information to make the right decisions. Here aresome of the best periodicals for investment news and advice:1. Investment Advisor - This is a monthly magazine not really meant for the laymaninvestor. It is a business-to-business publication targeted at independent financialadvisors, registered investment advisors as well as insurance based broker-dealers.2. FDI Magazine - This is a bi-monthly news and foreign direct investment publicationowned by The Financial Times Business Group and edited in London. As its namesuggests, it is targeted at people looking to invest overseas, which, looking at the annualgrowth rates of the developing nations, may not be a bad idea.3. Wholesale Investor - Relatively new on the scene, this Australian-based publicationhas already garnered a loyal readership through its unconventional views. It oftenfeatures private companies which are high-growth, own innovative technology, are awardwinning or seeking international expansion. Areas typically covered are the Internet,Health Care, Mining, Green Technology, Finance, Consumer Goods, Telecommunications,Agriculture, and Property.4. Forbes - One of the most famour names in the corporate world, this biweeklymagazine with a subscription of 900,000. It is part of the Forbes Media group which hasa considerable online presence with websites like Forbes.com, Investopedia.com,RealClearPolitics.com, RealClearMarkets.com and RealClearSports.com. Forbes Asia,ForbesLife and Forbes Woman are sister magazines. There are also has 10 local-languagelicensee editions in China, Croatia, India, Indonesia, Israel, Korea, Poland, Romania,Russia and Turkey.5. Businessweek - Now officially known as Bloomberg Businessweek, this biweeklymagazine was born just before the onset of the Great Depression. It pioneered the actionof covering national political issues that directly impacted the business world. It carrieswidely-followed executive pay and business school rankings.6. Fortune - The venerable Fortune concludes this list. Besides compiling the list of thetop companies as the Fortune 500, this biweekly magazine, launched during the GreatDepression, has a current circulation of over 850,000. Along with Forbes andBusinessweek, Fortune forms the Holy Trinity of investment periodicals.
  4. 4. What Should You Look For in a Mutual Fund?A mutual fund is a collection of stocks or bonds. One can think of a mutual fundas a company that brings together a group of people and invests their money instocks, bonds, and other forms of investment. Each investor owns shares whichrepresent a portion of the holdings of the fund.Mutual funds have become extremely popular over the last two decades. Whatwas once just another obscure financial instrument is now a part of our everydaylives. More than one half of the households in America invest in mutual funds.Trillions of dollars are spent on mutual funds alone in the US.Investing in mutual funds is better than simply letting your cash waste away dueto inflation in a savings account. But, for most investors, thats where theunderstanding of mutual funds ends.Originally, mutual funds were constructed for the average small investor. It wasthe way for the little guy to participate in the market. Mutual funds have beenregarded as an excellent idea in theory, but, in real world, they havent alwaysdelivered. Not all mutual funds are equal in every aspect. Making investments inmutual funds isnt as easy as throwing money at the first salesperson who solicitsones business.For the individual who wants to get in the stock market by investing, there arevarious mutual funds that are worth looking into. When conducting research, it isbest to choose different genres of mutual funds. Various benchmarks should bekept in sight in order to compare the mutual funds.The performance of the chosen mutual companies should be properly evaluated.One has to see how the company has weathered the ups and downs of the stockmarket over a previous period of years. Although, this is not an absoluteindication of future success, it lets us know, whether the company is capable ofperforming well, even if there is no clear indication of volatility in the stock.Expense ratios of different fund houses and their schemes should also be properlyreviewed. These costs include administrative costs, advertising costs, buying andselling of stocks and bonds and load costs. Thorough research should be done bythe prospective investors themselves, because these expenses are also borne bythem alone.Detailed information about the different fund houses and the schemes therein canbe found in newspapers, brochures and on financial websites. However, oneshould make sure that they fully understand all of the information that is given,as this makes investing in a mutual fund easier.
  5. 5. After properly analyzing all of the information, one can make a well-informed decisionabout mutual funds. This research work helps the average investor to select a mutualfund to invest in, according to their individual financial goals. One must ensure that theygo through all of these details when they are ready to start investing. The knowledgegained from comparing different mutual funds gives the average person confidence toinvest in the risky, yet rewarding, world of mutual funds.For more information, please Click Here Contact us SteelPath 2100 McKinney, 14th Floor Dallas, TX 75201 E-mail: investor@steelpath.com TelePhone: 888-614-6614 Website : http://www.steelpath.com/

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