On Friday, July 29th, 2011 Income Growth Advisors launched two model portfolios for potential investors to track. The 20 Master Limited Partnership (MLP) Model Portfolio and the 15 Dividend Growth Stock Model Portfolio created to illustrate the
investment philosophy of Income Growth Advisors, LLC.
Investors are encouraged to look at these two model portfolios as a measure of investment performance which Income Growth Advisors expects to offer its clients. The yield of these two model portfolios, on July 29th, 2011 was 6.75% and 6.0% for the 20
MLP Model Portfolio and 15 Dividend Growth Stock Model Portfolio. Both
portfolios were designed to double their income through dividend growth over
the next 7 to 8 years. Capital gains are a secondary objective to achieve the income objective. With successful execution of our investment strategy, clients will experience a quadrupling of their income over the next 15 years.
Our focus on growing portfolio income and targeting future income flows is the pragmatic portfolio solution the debt deflation and post bubble paradigm of the early 21st
century. Buy investing in growing income securities which benefit from the new
fundamental global economic drivers—debt deflation, monetary inflation, and
emerging market growth—our income growth strategy should significantly
outperform fixed income and growth stock investing and provide practical
solution to retirement minded individuals. We believe that stocks, bonds, and
real estate are being replaced by income growth, commodity, and emerging market
assets as the leading wealth creation assets of the new millenium.
Our portfolios seek to grow their income distributions by investing in companies
which have demonstrated distribution and earnings growth and benefit from the
dynamics of the new world order. The MLP portfolio has special tax considerations you should review with your accountant. MLPs provide a tax shielded income stream that offers extraordinary comparable yield benefits to treasuries
and municipal bonds.
MLPs are flow through entities which pay out distributions primarily as a return of capital. Consequently, the income from and MLP portfolio will be largely tax free. However, this creates problems for tax free investors or retirement plans, as MLP generate unearned business tax income which cause tax free investors, like nonprofits, and retirement plans, to have to pay taxes on the UBIT.
Consequently, people evaluating these portfolios with their financial planner may want to consider these assumptions. Approximately 85% of the MLP Model Portfolio will generate tax free (and tax deferred) income. Investors should use 15 Dividend Growth Stock Model Portfolio for their retirement plans as should nonprofits.