Adam Carlin
Director-wealth management/senior portfolio management director
- Bermont/Carlin Group at Morgan Stanley Smith Barney -
Coral Gables
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"We favor investing in the stock of companies that pay high dividends — preferred stocks and convertible preferred stocks of high-quality companies. We also have invested in master limited partnerships (MLPs). We like natural gas line MLPs. Investors in MLPs usually have the added benefit of having a portion of the cash flow distribution these partnerships pay being tax-deferred and even shielded from ordinary income taxes. Another area we have invested in is REITs, or real estate investment trusts, as well as mortgage REITs when appropriate. Clients need to be willing to take a high degree of risk, but they can get a high degree of cash flow, which can be attractive. We also like corporate bonds. As a rule, we typically favor buying companies that are rated investment grade and in some cases have seen improvement in their balance sheet. For investors in a high tax bracket who may not need cash flow, we've been investing in zero-coupon municipal bonds. Because these bonds don't pay interest payments, they often generate a higher tax-free rate of return to the investor."
Tags:
Banking & Finance
