logo
  Join        Login             Stock Quote

The Income Investing Chart You Don't Want To Miss...

 April 19, 2012 10:16 AM


(By Street Authority)Sometimes it takes guts to be an income investor.

A few weeks ago, the S&P 500 closed above 1,400 for the first time since May 2008, before the Lehman Brothers collapse led off the financial crisis. In total, the index has gained a remarkable 11% so far this year (compared with 0% for all of last year).

That's good news, right?

Well, lower-yielding financials and tech stocks have led the move higher, while defensive high-yield utilities and master-limited partnerships (MLPs) have lagged to the downside.

For instance, the Alerian MLP Index is up less than 1% year-to-date, while the utility sector, down more than 3%, is currently the worst-performing sector in the S&P 500.

Last year, these two groups outperformed as nervous investors sought safe dividend returns amid volatile markets. This year, however, the reverse started taking place. Financial and technology companies listed on the S&P 500 have risen about 17%.

Investors have taken more chances on increased signs of economic recovery in the United States and easing concerns about Europe's debt crisis. As a result, some are investing their capital into riskier sectors, such as energy, that can benefit from economic growth.

As well, Treasury yields have spiked. Yields on 10-year Treasuries climbed to a recent high of 2.40% (before pulling back), from a record low of 1.67% in September.

The problem is the yields on many of my favorite high-yield sectors -- like MLPs and municipal bonds -- are loosely pegged to the 10-year Treasury yield. So as Treasury yields rose (meaning Treasury prices fell), prices for these securities fell in line with historical spreads.

In the past couple of weeks, yields have stabilized as the appetite for risk has fallen with the pullback in the market.


Next Page >>12
iOnTheMarket Premium
Advertisement

Advertisement


Post Comment -- Login is required to post message
Name:  
Alert for new comments:
Your email:
Your Website:
Title:
Comments:
 

rss feed

Latest Stories

article imageChart Says This Retailer's Comeback Isn't Finished

One of the surprises, at least on the surface, of the market's recent swoon was the outperformance of read on...

article imageETF Performance Review: Major Asset Classes | 19 Dec 2014

It’s all about real estate investment trusts (REITs) these days when it comes to bullish performance among read on...

article imageOil and Global Stock Markets Rebounding Sharply

So far so good on our expectation of a 4 to 5% pullback and then a resumption of the bull read on...

article imageGrading the FOMC

Love its members or loathe them, you have to admire the gradual impact the policy-making committee has had read on...

Advertisement
Popular Articles

Advertisement
Daily Sector Scan
Partner Center



Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.