OUT OF THE BOX: THE WHOLE SHOOTING MATCH

“Keep calm. Reload. Aim. Shoot again.” I have great regard for Cathie Wood and for her ARK Fund along Invesco’s QQQ Trust. They both concentrate on appreciation and growth. Both funds do a lot of good research that can translate into good profits for their holders. I think these types of securities bode well for younger people and for those making a good living in the prime of their years.

I also like some bonds especially those that are paying more than the Inflation rate. With a current Inflation rate of 3.2%, according to the U.S. Labor Department, here are some options. Also, municipal bonds interest me, if your tax bracket is useful in making these purchases.

Bloomberg Index????????????????????? ???????????? Yield

Treasuries????????????????????????????????? ???????????? 4.417%

U.S. Investment Grade Corporates?????? 5.295%????????????

U.S. High Yield Bonds?????????????? ?????????? 7.641%

Mortgage Backed Securities?? ???????????? 5.052%

Tax-Free Municipal Bonds?????? ???????????? 3.438%

*Data according to Bloomberg.

“It is better to have a permanent income than to be fascinating.”

????????????????? ?-Oscar Wilde

Having pointed all of this out I also think it is very important to have “Income” as part of your investment strategy. It was many years ago, I was only doing business with very large institutional accounts, at the time, when some people I knew came to me and said “HELP!” They wanted “Income” and so I invented a strategy that provided “Income.” I have refined this concept, over the years, and I want to share with you where it stands today. “Income,” in my opinion, becomes ever more important for seniors, retirees, those considering retiring, pension funds or any entity that needs a steady source of funds that can be reinvested or used for living expense, corporate expenses, each and every month. All of the securities that I currently use pay monthly and so the investor can decide what to do with the cash each and every month. Also, remember that dividends are taxed at 15% or 20% and so if you are in a higher tax bracket they also provide some tax relief.

Further, I am quite careful to watch the flow of funds to make sure that the dividends are “covered,” meaning paid from income, and not some return of capital. This changes from month to month and I watch it carefully. I also concentrate on the source of funds. Some securities pay from bonds, mortgages, CLO’s, tax-free bonds, equities, convertible bonds, loans, covered calls, and other sources.

Also, you have to bear in mind that these securities, like regular stocks, can cut their dividends, raise their dividends, or pay a special dividend, such as a year-end dividend. This is all done at the Board level, for the most part, and shareholders do not get a vote. Here, with the Fed likely to lower interest rates this year, in my view, it will be a positive for dividend increases as the cost of borrowing also likely decreases.

It is amazing, to me, how many people in the Press tout this stock, or that one, but pay so little attention to “Income.” It is all about appreciation, but appreciation is not all that people need, in my opinion. “Income” is also a critical part of contemplative investing, and it amazes me how little attention is paid to it.

“We have become 99 percent money mad. The method of living at home modestly and within our income, laying a little by systematically for the proverbial rainy day, which is due to come, can almost be listed among the lost arts.”

??????????? ??????-George Washington Carver

With both the FED, and their possible rate cuts, and our elections on the horizon, I suggest that you include “Income” in your investment objectives. Monthly income gives you flexibility and you are not totally stuck with the movements in the markets. If the liquidating value of an investment is down but you are still receiving “Income,” you are in a far better place economically, in my viewpoint.

??????????? Mark J. Grant

??????????? Chief Global Strategist

????????? ??Colliers Securities

??????????? Mark.Grant@Colliers.com

??????????? U.S. 954-999-0933