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High Yield Strategy Fails Again

Published Tue, 17 Jul 2018 12:46:40 -0400 on Seeking Alpha

Background (Skip this part if you are already up to date with my series of articles)
I have been writing a series of articles analyzing the performance of high yield investment portfolios composed primarily of mREITs, BDCs, and CEFs. I started the project after reading articles about high yield investing here on Seeking Alpha which made it sound like a way for a retiree to have twice as much money to safely spend in retirement compared to what he or she would be able to realize through more conventional investment strategies.
Study #1 I started out in 2015 by constructing model portfolios composed of high yielding securities suggested by WmHilger and High Yield Investor. That first study was made on the model of a retiree who invested his nest egg in the suggested high yield portfolios with $500,000, withdrawing a portion for spending every year and reinvesting the rest of the dividends to grow the portfolio over time. I "funded" two index funds as of July 1, 2010, with the same initial payment and followed the same technique there, except instead of reinvesting extra dividends, I sold off some of the funds each year to meet the spending schedule (because the dividends were less than the amount of the withdrawal.) The withdrawals were 9% of the initial model portfolios - the range that was then suggested was attainable through high yield - plus annual COLA adjustments. I wrote it up in a series of articles, including Can High Yield Investment Portfolios Support... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
CALUMET SPECIALTY PRODUCTS 4.34   434.0 0.01 2.74 62.56
OXFORD LANE CAPITAL 9.73   0.0 0.00 1.62 16.65
ARLINGTON ASSET INVESTMENT 5.55   0.0 -1.21 0.90 16.58
CYPRESS SHARPRIDGE INV 6.32   6.0 1.05 1.00 15.15
ANNALY CAPITAL MANAGEMENT 8.60   0.0 -3.32 1.20 14.00
NEW YORK MORTGAGE TRUST 6.14   12.0 0.51 0.80 12.74
WESTERN ASSET MORTGAGE CAPITAL 9.83   10.7 0.92 1.24 12.58
AMERICAN CAPITAL AGENCY 15.64   0.0 -1.54 1.92 12.21
THL CREDIT 6.96   0.0 -0.86 0.84 12.09
DYNEX CAPITAL 15.16   0.0 -10.26 1.80 12.06
TWO HARBORS INVESTMENT 13.28   0.0 -2.81 1.60 12.02
FIRST TRUST SPECIALTY FINANCE AND FINANCIAL OPP FUND 6.04   0.0 0.00 0.00 11.73
PENNANTPARK INVESTMENT 6.32   21.8 0.29 0.72 11.32
KOHLBERG CAPITAL 3.75   0.0 -0.25 0.40 11.05
NICHOLAS-APP CONV & INCOME 5.68   0.0 0.00 0.00 10.90
AG MORTGAGE INVESTMENT TRUST 17.47   6.1 2.87 1.90 10.89
MFA FINANCIAL 7.39   10.4 0.71 0.80 10.81
PROSPECT CAPITAL 6.71   16.8 0.40 0.72 10.76
APOLLO INVESTMENT 16.78   14.2 1.18 1.80 10.73
WELLS FARGO ADV GLOBAL DIV 5.38   0.0 0.00 0.00 10.58
TCP CAPITAL 13.75   29.3 0.47 1.44 10.48
STELLUS CAPITAL INVESTMENT 13.45   8.2 1.65 1.36 10.16
HORIZON TECHNOLOGY FINANCE 11.85   9.5 1.25 1.20 10.12
OAKTREE SPECIALTY LENDING 4.90   0.0 -1.39 0.50 10.02
H&Q HEALTHCARE INVESTORS 18.84   0.0 0.00 1.82 9.71
APOLLO COMMERCIAL REAL ESTATE FINANCE 19.35   12.6 1.54 1.84 9.57
HERCULES TECH GROWTH CAP 13.26   10.0 1.32 1.28 9.55
ELLINGTON FINANCIAL 17.90   16.3 1.10 1.68 9.44
EATON VANCE TAX MAN GLOBAL BUY WRITE OPP FUND 9.67   0.0 0.00 0.00 9.03
CS HIGH YIELD BOND FUND 2.58   0.0 0.00 0.00 8.87
EATON VANCE TAX-MAN GLOBAL DIVERSIFIED 8.36   0.0 0.00 0.00 8.75
WELLS FARGO ADV INCOME OPP FUND 8.20   0.0 0.00 0.00 8.61
ARES DYNAMIC CREDIT ALLOCATION FUND 15.08   0.0 0.00 0.00 8.56
ING GLOBAL ADV AND PREMIUM OPPORTUNITY FUND 10.60   0.0 0.00 0.00 8.51
ARES CAPITAL 19.19   10.5 1.82 1.60 8.39
EATON VANCE TAX-MAN DIVERSIFIED EQUITY 12.14   0.0 0.00 0.00 8.37
WA HIGH INCOME FUND II 6.76   0.0 0.00 0.00 8.27
COHEN & STEERS CLOSED-END OPPORTUNITY FUND 13.11   0.0 0.00 0.00 8.11
PIMCO STRATEGIC GLOBAL GOVERNMENT FUND 9.17   0.0 0.00 0.00 8.04
STARWOOD PROPERTY TRUST 24.39   18.5 1.32 1.92 7.95
SOLAR CAPITAL 20.87   12.4 1.69 1.64 7.93
FIRST TRUST STRATEGIC HIGH INCOME FUND II 12.35   0.0 0.00 0.00 7.77
BLACKROCK DEBT STRATEGIES FUND 10.78   0.0 0.00 0.00 7.63
NFJ DIV INTEREST & PREMIUM STR FUND 12.55   0.0 0.00 0.00 7.26
GOLUB CAPITAL BDC 18.55   15.7 1.18 1.28 6.89
FLAHERTY & CRUMRINE/CLAYMORE PREF SEC INCOME FUND 20.35   4.8 4.25 0.00 6.62
CAPSTEAD MORTGAGE 7.41   0.0 -0.86 0.48 6.58
COHEN & STEERS TOTAL RETURN REALTY FUND 14.98   0.0 0.00 0.00 6.56
MEDLEY CAPITAL 2.61   0.0 -1.62 0.15 5.81
EATON VANCE MUNICIPAL BOND FUND 12.78   0.0 0.00 0.00 4.00
SEADRILL 3.08   0.0 0.00 0.00 0.00

CALUMET SPECIALTY PRODUCTS - CLMT
CALUMET SPECIALTY PRODUCTS - CLMT  


Older articles featuring Calumet Specialty Products (CLMT):
High-Yield Investment Strategy Fails
5 Midstream MLPs You Should Buy Now For Both Yield And Price Appreciation Potential
YMBC High Yield Portfolio - Q2 2016 Review
12 Months Of High-Yield Bond Reviews From Durig Capital - The Recap
High Yield Vs. DGI Vs. Index Funds: What Actually Works Best For Retirement Income?
High-Yield Bonds: Truce
Western Refining Inc. - 7% Dividend And 60% Upside Potential
It's A No-Go For Oil At Doha: These Company Dividends Stand To Benefit Retiree Portfolios
Williams PartnersTops Basic Materials Dividend Dogs By Upside & Gains For April
High Yield Bonds: 'The Rally'

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