One should be careful with MLPs, they have been a major beneficiary of the low interest rate and the various QE's.
The MLPs I own have nice high yields (around 9% or so), so I'm not really planning to sell them. It's great when the share price goes up, but since I don't plan to sell and recognize the capital gain, it doesn't really matter much where the share price goes. For ETE I sold it because the share price went up so much the yield was unattractive (below 3%). Nevertheless, it still keeps going up, don't ask me why.
So when you say be careful, what do you mean, be careful of what? As long as the dividends don't get cut I don't really care where the share price goes. I've owned CPLP for a few years. I bought it around $8.70, it went down to about $6.50 when a customer declared bankruptcy, now it's pushing above $11. I don't care much, it keeps spitting out 29 cents every quarter. I feel better when it's up, but I can't spend my feelings. It's the dividend I care about. |
