Investing Topics: Conservative Income

Almost anything can affect stock prices in the near term. Long-term, earnings and dividend growth are what counts.

In 2013, the Alerian MLP Index gained 27.6 percent. Energy Transfer Partners (NYSE: ETP) did much better at 43.4 percent, thanks to restoring regular quarterly distribution increases.

Buying stocks of strong companies at the lowest possible prices: That’s been my primary strategy thus far for the Conrad’s Utility Investor Portfolios.

This month, I’m adding two stocks to the Conservative Holdings.

As goes January, so goes the year. That old Wall Street adage doesn’t bode well for most of the stock market.

Last November, I advised income investors to favor AT&T (NYSE: T) a traditional dividend paying stock, over shares of its iPhone partner Apple Inc (NSDQ: AAPL).

Fourth quarter and full-year earnings normally dominate the news this time of year. And rightly so: They’re what ultimately shape shareholder returns.

This week, FirstEnergy Corp (NYSE: FE) announced the first electric utility dividend cut for 2014. Fortunately, it’s likely to be the last as well.

Verizon Communications (NYSE: VZ) posted solid fourth-quarter earnings yesterday, demonstrating once again why the stock is a foundational holding for income-seeking investors.

Kinder Morgan Energy Partners LP (NYSE: KMP) has come under fire for its tight distribution coverage and concerns that the blue-chip MLP’s size makes it difficult to grow cash flow. The burdensome incentive distribution rights that the partnership pays to its general partner, Kinder Morgan Inc. are another cause for concern.

Wall Street’s January ritual is to roll out “new” investment strategies. This year, fund manager Bill Gross has proclaimed the end of a 30-year bull market for bonds. So it’s no great surprise income advisors further down the food chain are pushing investors to adjust portfolios for higher interest rates.