At Saturday's AAII meeting Master Limited Partnerships were the subject of some discussion. Not surprising given today's low yields. Here is a WSJ article that will be of interest to those seeking an understanding of how these issues behave in a rising interest rate environment. Here is a good introduction to these issues.
The essential points are:
1. They offer attractive yields in today's low interest rate market,
2. Their price is volatile and will drop when yields rise - they are stocks,
3. The investor will have additional accounting (headaches) with these issues - companies issue K-1s typically late is the season, there are deferred taxes etc.
4. They should be considered only by longer-term investors.
Personally they are on my radar screen for when short-term interest rates go higher. I am not interested with the Fed holding short-term rates near zero.
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