Author: Jim Knight
How 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 the NYSE, Alerian Exchange, and NASDAQ. MLPs combine the tax benefits of a limited partnership with the liquidity of publicly traded securities because it is listed on a stock exchange. On the other hand, REITs are unit trust funds that may be unlisted or listed on the stock exchange. These trust funds invest primarily in income-producing real estate and companies whose principal assets comprise of real estates. Dividends are given out to the unit holders from the income generated from the real estate and companies. Due to the trading activity of REIT on stock exchanges, unit holders benefit from capital appreciation caused by the price changes. For investors who have a fear of partnerships in general, it is important to know that MLPs are regulated by the Securities and Exchange Commission (SEC) and must comply with Sarbanes-Oxley. This feature is very much similar to publicly traded companies. MLPs have to file annual and quarterly statements, notify investors of any material changes that affect the business, and are mandated to utilize enhanced accounting rules as enacted by Congress which in turn is a very attractive proposition for investors.
Companies that receive 90% or more of their income from interest, dividends, real estate rents, gain from the sale or disposition of real property, income and gain from commodities or commodity futures, and income and gain from mineral or natural resources activities are included in the MLP structure according to the National Association of Publicly Traded Partnerships. Leaving out a few exceptions, lion's share of the MLPs operates in the energy industry. MLPs operate in segments that are mostly involved in usage of natural resources. This focus 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 screeners are programs available on financial sites. This program allows an individual to search the entire market for stocks to meet their particular requirements. REITs are mostly in possession of rental properties. Therefore, a major portion of the income generated by REITs comes from rents. REITs invest in shopping malls, office buildings, apartments, warehouses and hotels. Some REITs are willing to invest specifically in one area of real estate, for example, shopping malls. These are the properties from which the REITs obtain their rental income. REITs make it possible for people who are interested in investing to pour funds in bigger property with small capital and less time commitment. Due to tax incentives and regulations, 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 analyze how they work and how individual REITs operate better. To find out the most preferable REITs, one must also try stock screeners. After putting down the desired parameters such as trading volume, growth, dividend growth etc in the screeners program, one might be able to locate the right REIT. This process saves a lot of time, 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. The others are July, January, September, April, November, May, March, June, December, August and February." - Mark Twain (1835-1910), legendary American novelist and humorist. As is quite clear from the quote above, investment is a risky business. However, with the proper guidance, it can be extremely rewarding. After all, with inflation, money kept unused is money wasted - one year from now, a dollar will buy you less than what it would 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 successful investor once said, "An investor without investment objectives is like a traveler without a
destination." Unless you know where you want to be, and when, you will never know how to get there. For example, if you are investing money for the short term, say your daughter's marriage in three years, it may be risky investing in stocks. On the other hand, 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 led to the dotcom boom, that is what led to the sub-prime mortgage crisis. Invest in something you truly believe in. As legendary investor and one of the richest men in the world Warren Buffet says, "Only buy something that you'd be perfectly happy to hold if the market shut down for ten years." That being said, you need the right information to make the right decisions. Here are some of the best periodicals for investment news and advice: 1. Investment Advisor - This is a monthly magazine not really meant for the layman investor. It is a business-to-business publication targeted at independent financial advisors, registered investment advisors as well as insurance based broker-dealers. 2. FDI Magazine - This is a bi-monthly news and foreign direct investment publication owned by The Financial Times Business Group and edited in London. As its name suggests, it is targeted at people looking to invest overseas, which, looking at the annual growth rates of the developing nations, may not be a bad idea. 3. Wholesale Investor - Relatively new on the scene, this Australian-based publication has already garnered a loyal readership through its unconventional views. It often features private companies which are high-growth, own innovative technology, are award winning 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 biweekly magazine with a subscription of 900,000. It is part of the Forbes Media group which has a 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-language licensee editions in China, Croatia, India, Indonesia, Israel, Korea, Poland, Romania, Russia and Turkey. 5. Businessweek - Now officially known as Bloomberg Businessweek, this biweekly magazine was born just before the onset of the Great Depression. It pioneered the action of covering national political issues that directly impacted the business world. It carries widely-followed executive pay and business school rankings. 6. Fortune - The venerable Fortune concludes this list. Besides compiling the list of the top companies as the Fortune 500, this biweekly magazine, launched during the Great Depression, has a current circulation of over 850,000. Along with Forbes and Businessweek, Fortune forms the Holy Trinity of investment periodicals.
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 fund as a company that brings together a group of people and invests their money in stocks, bonds, and other forms of investment. Each investor owns shares which represent a portion of the holdings of the fund. Mutual funds have become extremely popular over the last two decades. What was once just another obscure financial instrument is now a part of our everyday lives. 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 due to inflation in a savings account. But, for most investors, that's where the understanding of mutual funds ends. Originally, mutual funds were constructed for the average small investor. It was the way for the little guy to participate in the market. Mutual funds have been regarded as an excellent idea in theory, but, in real world, they haven't always delivered. Not all mutual funds are equal in every aspect. Making investments in mutual funds isn't as easy as throwing money at the first salesperson who solicits one's business. For the individual who wants to get in the stock market by investing, there are various mutual funds that are worth looking into. When conducting research, it is best to choose different genres of mutual funds. Various benchmarks should be kept 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 stock market over a previous period of years. Although, this is not an absolute indication of future success, it lets us know, whether the company is capable of performing 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 properly reviewed. These costs include administrative costs, advertising costs, buying and selling of stocks and bonds and load costs. Thorough research should be done by the prospective investors themselves, because these expenses are also borne by them alone. Detailed information about the different fund houses and the schemes therein can be found in newspapers, brochures and on financial websites. However, one should make sure that they fully understand all of the information that is given, as this makes investing in a mutual fund easier.
After properly analyzing all of the information, one can make a well-informed decision about mutual funds. This research work helps the average investor to select a mutual fund to invest in, according to their individual financial goals. One must ensure that they go through all of these details when they are ready to start investing. The knowledge gained from comparing different mutual funds gives the average person confidence to invest in the risky, yet rewarding, world of mutual funds. For more information, please Click Here
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Published on Dec 14, 2010
A mutual fund is a collection of stocks or bonds. One can think of a mutual fund as a company that brings together a group of people and inv...