The industry benchmark Alerian MLP Index slipped in May but hit fresh 52-week highs in July, and the Alerian MLP Total Return Index–which includes reinvested dividends–has touched new all-time highs. But energy-focused don’t appear overvalued: MLPs offer an attractive yield relative to historical norms and compared to other income-producing groups.
Although I remain relatively bullish on the economy and markets, I also recommend taking steps to recession proof your investment portfolio.
The price of natural gas liquids has declined recently, but investors shouldn’t worry about this seasonal weakness. However, the Obama administration’s moratorium on deepwater drilling in the Gulf of Mexico is a bigger concern.
The eurozone, the most unloved region in the investment universe, offers plenty of high-quality bargains.
The global economic picture is much as we predicted: a subpar recovery in developed nations and continued
growth in emerging markets.
A dispassionate analysis of the data doesn’t support the conclusion that the world is headed for a double-dip recession, nor does it back up the idea that the EU’s newfound fiscal responsibility will doom the global economy. Rather, the data suggests that we’re in for a slow, grinding recovery.
Macro issues will continue to drive stock prices in the energy sector until second-quarter earnings season gets into full swing. Here are two short plays to hedge your portfolio.
Don’t buy the hype surrounding alternative energy; this sector faces severe headwinds that will only intensify as EU nations prune budgets.
Tim Guinness, the London-based manager of Guinness Atkinson Global Energy (GAGEX), shares his take on the oil spill’s impact and the future of the US energy sector.
With the S&P 500 near the low end of its trading range, a move to the top of that range could be in the offing.
