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Income Investing

Closed-End Values

By Roger S. Conrad, on Mar. 29, 2016

Dividends are only as reliable as the underlying company writing the checks. But the combination of a strong business and generous yield always indicates value—and sets the stage for capital gains when enough investors recognize the opportunity.

Since the Lifelong Income Portfolio launched in June 2013, the performance of our individual holdings has been mixed, reflecting shifting expectations for the Federal Reserve’s monetary policy, volatile commodity prices and weakness in the Australian and Canadian dollars.

However, most of our holdings have delivered the goods as businesses and will continue to pay generous dividends as long as their cash flow remains healthy. If their share prices don’t reflect this strength right now, they will eventually, resulting in capital gains.

Despite the growing risk of a bear market, we have no problem holding these positions, though investors should keep some powder dry for potential opportunities. (We highlighted some names we’d consider adding to the Portfolio in Bring Your Rifle for Bear Season.)

Our rationales for buying and holding the various non-stock positions in our Lifelong Income Portfolio differ slightly.

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