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Barron's: 11 Best Income Investments for 2019

(Christy Thompson/Dreamstime)

By    |   Wednesday, 09 January 2019 04:37 PM

Barron’s advises savvy investors that the recent selloff “has created a bounty of opportunities in both stocks and bonds that are among the most promising in years.”

The financial publication recently offers its “Best Income Investments” for the new year.

Barron’s suggested high-dividend stocks in the U.S. and overseas markets, master limited partnerships, junk bonds, and preferred stock. “In these sectors, investors can get yields from 3% to 10% through individual securities, mutual funds, exchange-traded funds, and a hard-hit group of closed-end funds,” the report said.

“Our favorite for 2019 is a group of MLPs focused on U.S. energy infrastructure that have been battered in the past two months as oil prices tumbled. Big MLPs trade like energy stocks, despite their modest commodity exposure. The benchmark index for MLPs, the Alerian index, was off 19% last year, bringing it near its 2016 low and yielding almost 9%.”

Barron’s also touted the Vanguard High Dividend Yield ETF (VYM), which holds high-yielding blue chips like Johnson & Johnson (JNJ), Exxon Mobil (XOM), and JPMorgan Chase (JPM), and recently hit a 3.5% yield.

Barron’s assessed 11 different sectors and ranked them in order of preference.

  • 1. MLPs
  • 2. Junk Bonds
  • 3. European Dividend Stocks and Funds
  • 4. U.S. Dividend Stocks and Funds
  • 5. Preferred Stock
  • 6. REITs
  • 7. Telecoms
  • 8. Municipal Bonds
  • 9. Utilities
  • 10. Investment-Grade Bonds
  • 11. Treasuries

Meanwhile, Goldman Sachs Group Inc. said investors should increase their holdings of cash even with fears of a recession in the U.S. this year likely to prove overblown.

With a risk-free rate of 2.4 percent on three-month T-bills, “cash represents a competitive asset,” with allocations likely near the lowest levels in 30 years for many investors, analysts including chief strategist David Kostin wrote in a research note, Bloomberg reported.

The bank recommended investors reduce holdings in bonds this year and remain invested in equities. Though U.S. stocks could come under further pressure, the Goldman strategists said they expect “positive U.S. economic growth will support continued earnings growth.”

“The potential exists for further equity market downside in the near term even if the recent equity market collapse does not lead to a recession,” the strategists wrote. “There have been four bear markets without a recession since 1946. During these episodes, the S&P 500 declined by an average of 21 percent for a period of 8 months. If the current episode follows that historical pattern, the S&P 500 could fall further in the next couple of months.”

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Barron’s advises savvy investors that the recent selloff “has created a bounty of opportunities in both stocks and bonds that are among the most promising in years.”
barron’s, best, income, investments
411
2019-37-09
Wednesday, 09 January 2019 04:37 PM
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