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No commission. I'm just a member of his investing site and try to share some of his investing philosophy with others who may be interested. I have done very well with my retirement portfolio following his advice. I started by signing up for his two week free look, and that convinced me to subscribe. Its really not very expensive and I made back my annual subscription the first week I started investing in his picks.

Rida Morwa - 16 April 2018
High Dividend Opportunities

Market Commentary

We will start with a market commentary:

Technical Analysis

A new week has started with the bulls in charge and all major indexes moving higher. The S&P 500 index has been consolidating in a trading range in between its 20-day moving average being the 2657 level and its 50-day moving average being the 2687 level. The bulls are hoping to close the index higher than its 20-day moving average, which will give some more steam for the markets and would create a short-squeeze on those shorting the markets. It seems that investors are hoping to see a continuation of the strong earnings momentum later on today as Netflix reports its earnings after the bell. The VIX volatility index is down by about 4% indicating that investor nervousness has calmed down and confidence continues to build. A close higher than the 2687 level would be very favorable for the bulls, and could mean that the overall consolidation is over and will eventually give way to massive buying.

General Outlook of Equities

First, I would like to say that there has been many pundits who are AGAIN making some noise about high market valuations and a possible "bear market" coming. I would like to respond that the equity markets in our view look very healthy, and the valuations are at very acceptable levels considering the current fast earnings growth. The current global economic environment is highly constructive to the long-term outlook for equities. It is our view that this bull market, despite its old age, should last for many more years. I will be dedicating a detailed report to our members supporting our view later during the week.

As for the year 2018, our target for the S&P 500 index remains at the 3000 level or roughly 12% higher from here. Patient and long-term investors should be well rewarded.

High-Yield Sectors

We are also seeing strength in most high-yield sectors today, and most notably in the Midstream sector and Property REITs.

Midstream Sector - First, the Midstream Sector is currently seeing signs of a strong recovery after having pulled back for reasons we explained that are not fundamental in nature, but rather due to uncertainties created by the FERC decision and the new tax laws. The individual Midstream MLPs that we hold in our Portfolio will see an immaterial impact from the FERC decision. I attribute the current recovery to 2 factors:

The sector has reached an oversold level and bargain hunters are putting new money at work to buy at the current attractive levels.

Most importantly, the current earnings season should confirm that the vast majority of Midstream MLPs will see a significant increase in their cash flows and possible increase in guidance because of high activity in the oil & gas sector in the United States. Furthermore, we should also get further confirmation that the FERC decision will have little impact on most of the Midstream MLPs.

I would like to also point out that we are likely to see some consolidation between the MLPs and their sponsors, with some MLPs converting to C-Corp. While this can result in some reduction in the dividend yields, overall such a consolidation should be very positive for the MLPs as it would result in significant tax savings. Furthermore, should the MLPs convert in C-Corp, then demand for these stocks is likely to significantly increase. When this happens, passive funds and institutional investors (which do not usually invest in MLPs) will be able to allocate large amounts of money to the merged C-Corps to hold on and collect the hefty dividends. This should result in much higher prices for the sector.

Property REITs sector - We have some good news for our Hotel REITs sector today with the mergers and acquisition activity lifting the whole sector. Today it was announced that Pebblebrook Hotel Trust (NYSE:PEB), a Hotel REIT, raised its bid for another Hotel REIT LaSalle Hotel Properties (NYSE:LHO). Increased merger & acquisition activity in the sector is due to generally low valuations. Hotel REITs are some of the main beneficiaries of an expanding economy, and despite this, valuations of this sub-sector remain one of the lowest in the space, with an average valuation of 10 times FFO.

Also, the Property REIT space in general is seeing strength today with the Vanguard Property REIT ETF (VNQ) higher by 0.8% today. I expect a good recovery in the sector as Property REITs start reporting and confirming a solid outlook for the year, especially the REITs that we hold in our Portfolio.

Note on USA

The CEF that we hold in our Core Portfolio, Liberty All Star Equity Fund (USA), declared a slight decrease in its dividend. The dividend declared was $0.17 instead of the prior dividend of $0.18. We should note that the dividend of $USA can vary as the fund pays about 10% of its net asset value in dividends per year. The last quarter was not very good for large cap & growth stocks, and resulted in $USA reducing slightly their dividends. I am very optimistic about the state of equities (including growth stocks that USA invests in) and I believe that we are still in a strong uptrend, and that USA should do very well for the next 2 years at least and hopefully raise their dividends again. Members should note that USA currently trades at a good discount to NAV of 7% and is a strong buy at the current level.

So I take it you are an accomplished investor and independently wealthy?



Rida Morwa

Research analyst, REITs, energy, Dividend income for retirees
Member Since 2015

I am a former Investment and Commercial Banker with over 30 years experience in the field. I have been advising both individuals and institutional clients on high-yield investment strategies since 1991. As author of “High Dividend Opportunities”, a premium subscription service at Seeking Alpha, my objective is to bring investors the most profitable and newest high dividend ideas, with special focus on the Energy sector. The service includes an actively managed model Portfolio targeting an overall dividend yield of 6-9% in addition to long-term capital gains. My research aims to maximize returns by identifying undervalued securities in the High Yield space.

In addition to being a former Certified Public Accountant ("CPA") from the State of Arizona, I hold a BS Degree from Indiana University, Bloomington, and a Masters degree from Thunderbird School of Global Management (Arizona). I am also a Certified Mortgage Advisor CEMAP, a UK certification. My Research and Articles have been featured on Seeking Alpha, Investing.com, ETFdailynews, and on FXEmpire.

For more information on how to subscribe to “High Dividend Opportunities” and gain exclusive access to the portfolio, live alerts and market commentaries, check the post: Introduction to “High Dividend Opportunities” on my Instablog or just email me at rmorwa.com .

I have made over 20% compounded annually for the last 24 years.

MSFT 1994
GOOG 2004
AMZN 2012

I know people making more money than me in real estate.


But I did that in the 90s.
If you own enough toilets, pretty soon you are replacing the sub flooring under a toilet every week end.
Low life people make the bath/shower overflow and rot out the bathroom floor.
You carry a caulking gun in the car and caulk around every tub you get a chance.

Good on you. We all get comfortable with what works for us. Some never seek it...

Ed this was my point a few weeks back in another thread where i said that everyone is financially, exactly where they want to be. Caught alot of grief on that one, but it is so true.

Excluding your sweat ain't a real RTI then. You're worth way more than that, whatever it is that you're doing. You have to count your sweat!

That rotten subfloor, the constant painting, repairing floors, etc. etc. etc. have kept me out of the rental marketplace. I know several who make an absolute killing doing it. But they are at the beckon call of their tenants 24 hrs a day and basically run a handyman service truck 5 day/week.

I haven't thought much about it but Okie is right, we are all exactly where we want to be financially. That's a good way of saying it.

I had 50 people waiting in line to fill out an application for one apartment in Seattle.
You never saw so many tattoos, pierced bodies, and mohawk haircuts.
The guy who got it was a very tall basketball player for the University of Washington. He was a very tall black from the caribbean. He got it because his coach, another giant black guy, was pressuring me that he could guarantee with his signature that I would always get the rent.
The guy went back to the caribbean and left all his junk. I called the coach about the last month's rent, but he had moved to Chicago.

I don't think real estate is right for me, but there is a book,
https://smile.amazon.com/How-Buy-Manage-Rental-Properties/dp/0671644238
~~"In that book is says to make rules with consequences and if anyone breaks the rules, give them the consequences.
You can have one rental and get an ulcer or have 100 rentals and run them like a business"~~

Real estate will teach you some of life's lessons.
Some of life's lessons can be painful.

I fixed bathrooms.
I took other people's junk to the dump.
I hired attorneys to evict renters who did not pay.
I dealt with people that are at the bottom of society.

18 years later....My stocks are up 0.65% today and I am about to visit my grandkids.

I am pretty positive I do not ever want to be a landlord. This month I rented a house from a neighbor for quite a bit less than he had in on the market for because he doesn't want to deal with "white trash" anymore. He's been burned by the last three renters. One would leave four kids under 12 alone for days on end. One moved out in the middle of the night several months behind. One snuck a dog into the basement and let it s#it all over. He's putting in new carpet as we speak.

Four bedrooms, two bath farm house, $550 a month. I'm putting one of my managers in it. He thinks he's getting a $1,000 a month benefit.......

Yeah, can't WAIT to get into the rental business. If I wanted to deal with that segment of society again, I'd ask for my old bar job back.....

If a renter pays on time and never calls for repairs, the landlord is very slow to raise the rent. That guy gets at least a 20% discount.

One thing I learned is to never arrange to meet a prospective tenant just because they called.
You can arrange they meet you someplace you were going anyway.
You can arrange to meet them if they call you 5 times.
But there are too many guys calling every house and apartment for rent in the paper and arranging to meet at everyone of them and showing up for none.

To rent a unit out is a big investment in time and money, so if you have a good tenant, make it worth his while to stay.

Market Update - January 10, 2018

Rida Morwa


Stocks pushed further into record territory Tuesday, and the Standard & Poor's 500 index's immaculate start in the year extended to a sixth day. The S&P 500 index broke above the 2750 level, which is an important area from a psychological standpoint. Given enough time I think that it will simply be yet another blip on the radar.

The market has been in a nice uptrend for months now, and the short-term charts look very similar as the S&P 500 continues to reach towards the 2800 level, a level I believe we will reach very soon, and possibly this month. Longer-term, I fully expect that the S&P 500 index will reach the 3000 level (or 9% higher from here), also fairly soon, within a few months or so.

This is a market that has been extraordinarily positive over the last year, and I see absolutely no reason for the momentum to slow down as buyers continue to dominate it. Using a "buy and hold" strategy continues to be the best course of action for our members.

Why Equities are still cheap?
Banks and analysts are returning from their extended holidays, and it seems that they have started revising earnings estimates higher and are upbeat, especially since fourth-quarter earnings should be the strongest in at least six years.

According to FactSet Research, the S&P 500 is projected to report average earnings growth of 11.8% in 2018, led by the energy sector (41.5%), and the materials sector (18.3%). If this holds, this will be the fastest earnings growth since 2011 -- bolstered by the highest expected profit margins in over 10 years.

Rising estimates are coupled with solid macro-economic data: The New York Federal Reserve now estimates that U.S. GDP is expanding at a solid rate of 4.0%, up from a previous estimate of 3.9%. Last quarter marked the longest sustained stretch growth rate of over 3.0% since the year 2004. And that strong economic tailwind continues to make an impact where it counts, which is the bottom-line of U.S. companies.

Many believe that stock valuations are getting stretched, but are they? In fact not. Interest rates (which greatly influence cost of capital and thus equity values) are still historically low. Furthermore, recent tax reform legislation is lowering corporate tax rates to 21% from 35%.

The value of equities is tied to the cash flows they can generate. Since lower taxes means higher profits, all else equal, the shares of U.S. companies are instantly worth more now than they were a few weeks ago before the tax reform bill was passed.

In fact, hedge fund manager David Tepper recently stated on CNBC that the market is "almost as cheap" entering 2018 as it was entering 2017.

We believe that double-digit earnings growth and the great opportunity to finally repatriate trillions in retained overseas cash means that 2018 is shaping up to be a great year for the equity markets. We are likely to see a wave of dividend hikes, in addition to stock repurchases which will drive equity prices higher. I would not be surprised to see a 10% to 20% returns for equities in the year 2018. It is a great time to be fully invested!

How to Invest in Energy and Basic Materials with High Yields?
As for energy and basic materials, these are just part of a bigger theme at play. Inflationary assets will be back in favor in the broader market. We think momentum will attract more momentum as the positive reflexive feedback loop leads into higher energy and commodity equity prices. For our members who like exposure to Energy and Materials, we strongly recommend to invest in the following 3 CEFs:

Blackrock Energy & Resources (BGR) - yield 6.2%
BlackRock Resources & Commodity (BCX) - Yield 6.2%
Voya Infrastructure, Industrials & Materials CEF (IDE) - Yield 6.8%
The above 3 CEFs will also be beneficiaries from President Trump's new infrastructure plans, and are a great addition to our Midstream MLPs which are also set to outperform in 2018. As a reminder to our newest members, our favorite Midstream MLPs include:

Diversified Exchange Traded Products (Which do not issue K-1s)

CBA - Yield 9.0% (This is a very strong buy)
MLPQ - Yield 14.8% (This is a very strong buy)
MIE - Yield 8.6%
AMZA - Yield 24.4% (Maximum recommended allocation of 2% of Portfolio).
Individual Stocks (Issue K-1 tax forms)

ETP - Yield 11.8% (This is a very strong buy)
EPD - Yield 6.0% (This is a very strong buy)
AMID - Yield 11.6% (This is a very strong buy)
CEQP - Yield 9.5% (This is a very strong buy)
BPL - Yield 9.6% (This is a very strong buy)
Note about Property REITs

The Property REITs sector is still showing some weakness but we are confident that this sector will outperform. Members should note that Property REITs are one of the safest asset classes around; investing in REITs is very similar to investing in real estate. In this case investors should maintain a long-term view and not worry about short-term price movements. Remember that in the past 20 years, Property REITs have outperformed almost every single asset class, and there is every reason to believe that this trend will continue:

Property REITs tend to outperform during periods of economic growth as occupancy rates and rent prices tend to increase.
Furthermore, Property REITs have an inherent protection against inflation and rising interest rates, which is the value of the properties they hold, which usually goes up in price along with inflation. Furthermore, most REITs are able pass the cost of higher interest rates to their tenants in form of higher rent.
Retail REITs have done relatively well over the past month, and most have had solid returns for the period. This sub-sector of property REITs remains very much oversold and has huge upside potential. We advise patience, as this sub-sector is likely to be a big winner as companies start their Q4 reporting. This holiday season was the best one in recorded history and retailers have done very well. A good example just announced this week: Target (TGT): The retailer announced that company sales in the holiday period grew 3.4%, compared with estimates of 0-2%. In addition, its fourth quarter EPS guidance topped views, and it reported a strong fiscal profit forecast as well. We think CBL, WPG, PEI, SKT and STOR are likely to see a big rally as they start reporting their earnings.

As a reminder, our favorite Property REIT and Commercial MREIT picks include:

Diversified Exchange Traded Products

RQI - Yield 7.8% (This is a very strong buy)
KBWY - Yield 7.8% (This is a very strong buy)
LRET - Yield 9.1% (This is a very strong buy)
AWP - Yield 8.9%
Individual Stocks

LXP - Yield 7.6% (This is a very strong buy)
WPG - Yield 14.8% (This is a unique opportunistic buy)
CBL - Yield 14.5% (This is a unique opportunistic buy)
VTR - Yield 5.5% (This is a very strong buy)
EPR - Yield 6.7% (This is a very strong buy)
SKT - Yield 5.5% (This is a very strong buy)
HT - Yield 6.3% (This is a very strong buy)
LADR - Yield 9.3% (This is a very strong buy)
====

Stay Diversified!
In order to achieve optimal returns, we urge our members to remain diversified across all the stocks and sectors in our Portfolio. This includes the Business Development Companies sector (or BDCs) and Growth stocks. our favorite picks are as follows:

====

Favorite BDC Companies
BDCL - Yield 18.5%
NEWT - Yield 9.7% (This is a very strong buy)
ARCC - Yield 9.6%
MRCC - Yield 9.9%
====

Favorite High-Yield Growth Securities
BST - Yield 5.5% (This is a very strong buy)
HQH - Yield 8.5% (This is a very strong buy)
ADX - Yield 8.9% (This is a very strong buy)
USA - Yield 10.6% (This is a very strong buy)
IDE - Yield 6.8% (This is a very strong buy)
THW - Yield 9.8%
DVYL - Yield 7.1% (This is a very strong buy)
SDYL - Yield 5.1% (This is a very strong buy)
LMLP - Yield 10.8%
BX - Yield 5.8%
SXCP - Yield 12.5% (This is a very strong buy)

Made 7% in just three weeks in January, then it took a dive that is still down for this year. Fortunately is getting close to even again.

I am up 1% so far for today
I am up 6.6% for the last week
I am down 2.9% for the last month
I am up 43.9% for the last year

This is twice as good as with obuma.

Bank On Infrastructure Growth With This 7.8% Yield CEF, Big Discount To NAV, To Benefit From Industry Tailwinds

Apr. 22, 2018
9:30 AM ET

Rida Morwa

Summary

+ The Trump Administration has released a $1.5 trillion infrastructure plan to upgrade America’s infrastructure.

+ Globally, around $3.7 trillion in investment will be required, per year, to meet the expected need between 2017 and 2035 – with aggregated total investment at almost $70 trillion.

+ This provides a natural tailwind to all infrastructure stocks, which may see a large inflow of new major infrastructure projects.

+ We are recommending gaining exposure through a diversified closed end fund that offers a 7.8% dividend yield, and comes with a 7% discount to NAV.

This research report has been produced together with Seeking Alpha author Julian Lin.


Strong Environment For Infrastructure In The United States

In February, the Trump administration released their long-awaited infrastructure plan.

The document noted:

"For too long, lawmakers have invested in infrastructure inefficiently, ignored critical needs, and allowed it to deteriorate. As a result, the United States has fallen further and further behind other countries. It is time to give Americans the working, modern infrastructure they deserve.”

Trump’s infrastructure plan calls for $1.5 trillion to repair and upgrade America’s infrastructure. $200 billion would come from federal spending with the rest coming from state and local governments, who would be expected to match the federal spending by at least a four to one ratio.



With the Trump administration heavily prioritizing getting this infrastructure bill passed, this creates a booming environment for infrastructure stocks. They have already taken a huge step this April, signing an administration memo to reduce review times on major infrastructure projects to two years, addressing what Trump considers “the horrible, and costly, and broken permitting process.”

Global Infrastructure Spending Needs
Infrastructure spending needs is not only confined to the United States. By 2040, the global population will grow by almost 2 billion people – a 25% increase. Rural to urban migration will continue with the urban population growing by 46%, which will trigger massive demand for infrastructure support. A recent report by McKinsey & Company’ projects that around $3.7 trillion in investment will be required, per year, to meet the expected need between 2017 and 2035 – with aggregated total investment at almost $70 trillion.

According to the report: “When it comes to investment in economic infrastructure, China remains the country projected to need the highest level of investment – at 34% of the almost $70 trillion pie. Eastern Europe will require around 4% while Western Europe will need around 10% of the total. The US, meanwhile, will need to invest around 20% of the total over the next 18 years – or close to $750 billion per year.”

Infrastructure Umbrella
The infrastructure is an extremely broad category, encompassing several sectors, including industrial, materials, transportation, communications, water, and electricity. We should note that most infrastructure stocks do not pay high yields. For income seekers, the best way to invest in infrastructure is through high-yielding closed end funds (or CEFs).

Clearly, infrastructure spending is set to increase at a fast pace both locally and internationally. Investors are set to be well served by allocating funds to infrastructure companies that are set to benefit the most.

Here readers should also note that many CEFs, which claim to be "infrastructure" are either "Oil & Gas Midstream" CEFs, or Utilities CEFs, and therefore their description can be misleading as they are not necessarily pure infrastructure Closed End Funds.

One of the best products through which to gain dividend exposure to the infrastructure sector is through the closed end fund (‘CEF’) Voya Infrastructure, Industrials and Materials Fund (NYSE:IDE).

Getting To Know IDE
IDE was incepted on January 26th, 2010. As stated in their semi-annual report, they seek to invest in companies with the following characteristics:
1. Good growth prospects,
2. resilient earnings potential across market cycles,
3. disciplined capital allocation management, and
4. strong competitive position.

IDE has a 1.22% expense ratio, which is very standard among closed end fund peers. IDE has paid a stable $0.29 quarterly dividend for the past six quarters. At recent prices of $15.10 per share, this is a 7.8% yield. The most recent quarterly dividend went ex-dividend on April 2nd and was paid out on April 16th.

Portfolio Composition

While the fund is diversified globally, it is primarily concentrated to the United States:



IDE has allocations to all industrial subsectors. In particular we like the heavy allocation to aerospace & defense:



The top ten holdings are made up of industrial blue chips including Deere & Co. (NYSE:DE), DowDuPont (NYSE:DWDP), and General Dynamics (NYSE:GD):



Call Options Strategy
The fund also seeks to reduce volatility through writing (selling) call options on select indices and/or exchange-traded funds (“ETFs”). The underlying value of the call options range from 15% to 50% of the portfolio. These calls typically have very short maturities (ten days to three months until expiration), are written “at the money,” and are sold directly through BNP Paribas Bank, Goldman Sachs International, and JPMorgan Chase Bank N.A. We can see a snapshot of their options portfolio below:



Through August 2017, the call options writing was a drag on the portfolio due to the premiums not covering the value of the calls upon expiration. However, this strategy can reduce price volatility and can increase the fund's earnings during periods when the markets are flat.

CONTINUED ON NEXT PAGE

Share Price Performance
Over the past 2 years, IDE has strongly outperformed the S&P 500 index on a "total return basis." With its focus on infrastructure, we believe that IDE is set to continue to strongly outperform going forward.



Dividend Coverage
The fund has distributed dividends through a combination of investment income and realized gains, with the majority coming from realized gains due to the low inherent yield from their holdings. We can see a breakdown of their quarterly distribution coverage below. In particular, we can see that they have not had to distribute any “return of capital” for the past four quarters:



(Chart by Author, data from CEFConnect)

Here, readers should note that equity CEFs are very different from "Fixed Income" CEFs and “Return Of Capital” (or ROC) for equity CEFs does not necessarily mean that it is bad or "destructive." These CEFs invest in equities and if they do not book the profits to distribute their dividends, this can result in a non-destructive ROC - which is in fact advantageous for investors as it would result in less income tax.

This is very different from "Fixed Income" CEFs where the investment income is predictable, and any ROC over and above income earned can be "destructive."

Valuation
Shares trade at around a 7% discount to NAV and a 1-year Z-Score of -1.5. Z-Score is calculated as (Current Discount - Average Discount)/Standard Deviation of the Discount. In short, this means that IDE is trading at a discount to its normal NAV discount by more than one standard deviation. We can see their historical NAV discounts below that IDE is trading at around its widest discount during the past 12 months, providing an attractive entry point:



Share Buyback Can Help Narrow The Discount
IDE has a history of repurchasing shares when NAV discounts persist. In the year ending February 28, 2017, the fund repurchased 526,321 shares, representing 2.7% of outstanding shares. At the time shares traded at a weighted-average NAV discount of 13.2% and per share price of $12.39. Readers can expect the fund to re-implement the share repurchase program should the discount prevail.

Risks
As with the vast majority of equity CEFs, there is a risk that capital gains (both realized and unrealized) do not cover the dividends. In such a case, the dividend could become destructive to the fund.

IDE is likely to underperform in case we hit a recession as infrastructure spending would likely to decrease. Having said that, currently the recession risks are pretty low, and this was confirmed by the Federal Reserve in their last statement.

Bottom Line
IDE is an excellent long-term hold to gain exposure to the growing infrastructure sector. This is an attractive purchase point with shares priced at a wide discount to NAV historically. With a very favorable macro-environment, this fund looks to provide investors with a stable high dividend yield and good potential for capital gains.

Another solid infrastructure CEF to consider is Cohen & Steers Infrastructure Fund (NYSE:UTF) with a yield of 8.7%, which we plan to cover in a separate research report soon.

If you enjoyed this article and wish to receive updates on our latest research, click High Dividend Opportunities

Note: All images/tables above were extracted from the CEF's website, unless otherwise stated.

Disclosure: I am/we are long IDE.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

I compare our present business climate and prospects for a long bull run of at least 16 more years, to the period that started immediately after the malaise of Jimmy Carter (+Obama) and ran through both terms of Reagan (+Trump eight years,) King George I (four years) and the first four years of Clinton. By eliminating excessive regulations, reducing taxes, and putting American businesses and workers first, Trump is setting up the American Free Enterprise to thrive like it has never thrived before. This is a wonderful time to be entering retirement with a portfolio of cash cows. Its great to be an American. And it is just getting started. If you recall, it took Reagan's first term for all the reforms to grab hold and turn around the Carter years of disaster. But Reagan's second term was truly a blessing from above.

That will necessitate Trump's re-election and a Pence term or two after that, if we are truly going to get a long-term bull market in place.

It is amazing how badly Zero and Co. could mess things up for the whole world's economies with just 8 years in office.

We cannot afford to tolerate lieberalism any more. They must be turned or turned out now.

This is exactly what I am counting on. Trump and Pence both with two terms. In these times of hatred and personal destruction, practiced by the democrats and the fake media, the next democratic President would be twice as bad as Obongo.