For master limited partnerships (MLPs), 2010 will mark the second consecutive year that these high-yield and tax-deferred investments have outperformed the overall stock market by a substantial margin. Take a look at the table below to see how much MLP investors have to be thankful for:
Total Return
| Year | Alerian MLP Index | S&P 500 | MLP Outperformance |
| 2009 | 76.5% | 26.5% | 50.0% |
| 2010
(through Dec. 20th) |
31.2% | 14.0% | 17.2% |
Source: Bloomberg
My Take: I do not plan to add to my positions in MLPs for the near term. That means around 3 months. I like MLPs as an investment because they have some outstanding yields and they are often a more stable approach to investing than other strategies. Yet, this does not mean that they don’t bring home the bank. Look at the chart below to see that point.
If you click “Read More” you will see that I’m holding the best performing MLP of 2010. I’ll admit it…I got lucky.
I am of the opinion that you don’t need to be near retirement age to look toward MLPs as an investing mix/strategy. Take a look at the piece linked above. If you’re new to MLPs it’s a good way to get a sense of their potential as an investment.
