Once Again, Cash Is King
One way to think about a global cash-flow strategy is to start with countries that are not printing money to prop up their economies. Here are four good ones: Canada, Norway, New Zealand and Australia. Here are some examples of what's out there.
Sydney Airport Holdings (SYD: ASX). Right now the Sydney Airport, a public company trading in Australia and on the Frankfurt Stock Exchange, is indicating a yield of 22 cents annually or about 9%. In 2004, it was paying 12 cents a share. Even during the worst year of the financial crisis, 2009, it paid 21 cents a share.
EnerVest Diversified Income Trust (ENDTF: TSX) is a diversified, closed-end fund that invests in income-producing and growth-oriented companies that trade primarily on the Toronto Stock Exchange. The fund makes distributions monthly and is currently indicating a yield in the neighborhood of total 2012 distribution of $1.20 a share (the same as 2010, 2011). With a current price of $12.23, the yield is about 9.8%. The top five equity holdings as of April 30 were Suncor Energy, Royal Bank of Canada, TELUS, TD Bank and Imperial Oil.
Telecom Corp. of New Zealand (NZT). Telecom is the largest provider of telecommunications and IT services in New Zealand. The company has paid a quarterly dividend continuously since at least 2002. Right now, the stock has been paying more than 6%. With an economy unburdened by government intervention in the money supply, many are speculating that New Zealanders are not going to stop talking anytime soon.SeaDrill Limited (SDRL) is a Norwegian company headquartered in Bermuda that provides offshore drilling and well services. Currently the company is indicating a 7% annual yield. SeaDrill trades on the New York Stock Exchange and the Oslo Stock Exchange. Yes, there's a lot of negative news out there. And if that's all you focus on, that's all you're going to hear. But now is the time to take advantage of bad news. The bottom line is you must not give up on maintaining the purchasing power on your money over time. The show must go on, and that means basic companies, providing basic goods and services that people must have, is one way to provide yourself a hedge during the turbulent times. By the way, I don't own any of the stocks for funds mentioned here. Some of my clients do, however. Finally, next week I'll be sitting down with uber-investor Jim Rodgers who co-founded the Quantum fund with that other legendary investor George Soros. Jim and I will be discussing "real asset investing" casually as part of a panel discussion at Temple University. I'll be sure to report some of the insights I learn from Jim in a future column. Stay tuned.
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