MLPs - the future of profitable investing?

Discussion in 'Stocks' started by Charly, May 12, 2008.

  1. Charly

    Charly

    Any opinion on that - received ( plus the
    usual "invitation") from Investorplace -
    Author Richard Band :

    ""Let me sum up the situation:

    The Bush tax cuts that helped drive the income stocks to new great heights during the past five years will be gone for good—no matter who is elected president.

    The new taxes on dividends and capital gains will not only put downward pressure on consumer spending but also on corporate earnings.

    And the slide may have already begun.

    This is why, over past three months, diversified stock funds have lost an average of 10.6%…and the most vulnerable banks, retailers, and some utilities have cut dividends.

    And it’s only going to get worse, as more and more investors wake up and realize that not only will taxes on their dividends will rise 20% on December 31, 2009 but also taxes on capital gains will rise as well, back to 20% from a historic low of 15%.

    The resulting sell-off could make the subprime shocker and the credit crunch look like drops a bucket.

    While the tax shocker will send most investors to the poorhouse, it will make serious money for any investor who understands the real consequences of these tax law changes.

    You can be one of them.

    That’s why it’s so important that you reposition your assets now. If you can simply follow our lead, you could easily double your money by this time next year in the only tax-deferred investment that will side-step the carnage and profit at the same time.
    Where the Big Money Will Be Made

    Surprisingly, the biggest winners of the new tax hike will be a special class of investments that give you tax-deferred status outside of your IRA or 401(k).

    If you’re one of my regular readers, you know what I’m talking about: Master Limited Partnerships (MLPs).

    They’re a select class of stock that few investors know exist. While they trade on the NYSE like most blue-chip stocks, they are set up as Master Limited Partnerships (MLPs) and enjoy a tax-deferred status second to none.

    Without getting too technical, an MLP is set up with three purposes in mind:

    To boost dividends
    To enlarge capital gains
    To increase shareholder value
    MLPs do it all by distributing nearly all profits back to investors—unlike corporations that keep the profits in company coffers and have to pay taxes on them.

    Because an MLP pays no tax on income, it’s not going to suffer any kind of negative earnings surprise when taxes on dividend income jumps 20%. That’s because MLPs don’t pay income taxes in the first place!

    What’s more, shareholders, too, will make out for a similar reason; the income they receive is tax-deferred as well. In other words, shareholders have to pay tax on their income only when they sell their shares.

    As a result, as the new taxes take effect on January 1, 2009, the fortunes of MLPs will rise exponentially for two reasons:
    Because their earnings will largely remain unaffected by the nightmare tax hike that is headed your way, and


    Because throngs of investors seeking tax-relief from the crushing new taxes will simply bid them higher and higher.
    What You Must Do Now to Capture
    Your Share of Profits

    Load up on Master Limited Partnerships that are generating lots of cash—and sharing their cash with shareholders in the form of juicy dividends.

    I’m speaking of such companies as AllianceBernstein and Kinder Morgan, who operate pipelines carrying oil, natural gas and other petroleum products.

    When the tax hikes kick in, you’re going to see not only their profits rise, but their dividends as well, as they continue to share the wealth with shareholders.

    That’s why we’re targeting 80% to 100% total returns while most investors will hope to break even. ""