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Portfolio Update

One Last Trade for 2014

By Roger S. Conrad, on Dec. 29, 2014

The Lifelong Income Portfolio aims to generate a growing stream of cash flow on which investors can rely for the long haul.

However, not every holding will be with us for a lifetime; in the late stages of a bull market, taking profits and losses to high-grade the Portfolio is the prudent approach.

Minimizing taxes is also a concern. This year, many readers incurred a sizeable liability when Kinder Morgan (NYSE: KMI) absorbed former Portfolio holding Kinder Morgan Energy Partners. (See Our Take on the Kinder Morgan Mega-Deal.)

This transaction, which involved a C corporation acquiring a master limited partnership (MLP), triggered a taxable event for unitholders who owe the Internal Revenue Service for capital gains and return on capital since their initial purchase.

Earlier this year, we also booked a sizable profit in Consolidated Communications (NSDQ: CNSL), a high-yielding regional telecom whose stock price had outstripped improvements in the underlying business. (See Book a 60.5 Percent Gain in Consolidated Communications.)

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