Money Show shows fresh ideas for investments
TERRY SAVAGE email@example.com October 23, 2011 5:06PM
Updated: May 3, 2013 12:15PM
The World Money-Show came to Chicago last weekend, bringing thousands of curious investors to hear speeches and attend seminars, and workshops on almost every aspect of investing. It’s a spinoff of the famed Las Vegas and Orlando shows, which attract visitors from around the world. In the exhibit hall, the content was tilted toward technology to help traders of stocks, options and futures, although there were the requisite displays from energy companies and precious metals firms.
Interestingly, the content of the three-day event seemed far more conservative than at the other shows, perhaps reflecting the mostly Midwest audience, or maybe because the enthusiasm for speculation has been tempered by the sideways, but volatile, market activity recently.
Foreign currency CDs
There was heavy interest in the EverBank presentation, given by Frank Trotter, who co-founded the bank in 1990, and has guided its growth to a $12 billion institution.
The full service bank offers all kinds of deposit accounts, and offers free debit card usage, with a $60 payment (equal to most banks’ annual debit card usage fee) if you open a new account. But the real attraction of EverBank is a unique foreign currency opportunity.
EverBank allows you to buy CDs and money market accounts denominated in any of several foreign currencies or more than 20 baskets of currencies, diversifying your exposure to the U.S. dollar. The CDs pay interest at the rates offered in those countries, but also expose you to currency risk — while maintaining your FDIC insurance coverage. For details, go to www.Everbank.com.
Trotter says that while interest in the euro has understandably waned in recent years, many depositors are opening accounts denominated in Chinese renminbi or the Brazilian real. While, the bank can’t deliver actual cash currency for those two countries, you can get the benefit of the trends which make those currencies stronger, or weaker.
Searching for yield
Once again reflecting the nature of the crowd, mostly older investors looking to preserve capital and yet gain more income than traditional bank CDs offer, there was a large crowd for the luncheon panel, “The Best Income Plays for a Low-Yield World.”
The experts on the panel each offered five investment suggestions, some of which yield as much as 7 percent, or more. But each agreed that chasing yield can be a dangerous game, and suggested diversifying these investments over a broad range of opportunities.
And each of them made clear — as I do — that these suggestions may not be appropriate for those who cannot afford risk. Or in my words, these ideas offer temptingly higher yields, but are not appropriate substitutes for “chicken money.”
For example, Mark Skousen (www.markskousen.com) suggested a Houston-based pipeline master limited partnership, with a 5.7 percent yield, that has increased its dividend every quarter.
He also recommended the Gabelli Gold and Natural Resource Income Fund, listed on the NYSE, a closed-end fund that invests in mining and energy companies and writes covered calls for income. It currently carries an 10.8 percent yield.
Richard Lehmann, publisher of the Forbes/Lehmann Income Securities newsletter (www.incomesecurities.com), recommended Penn West Petroleum, a Canadian energy company (formerly a trust) with a 7 percent yield.
However, he cautioned this should be purchased in an IRA to avoid complications with Canadian taxes on the dividend.
And for those willing to take on more risk, he highlighted an 11 percent yield on a partnership that owns container ships — and is dependent on the global trade.
Kelly Wright is managing editor of the long-running Investment Quality Trends newsletter (www.IQTrends.com), which recommends stocks based on a screening tool for companies that have paid dividends for at least 25 years, as well as other criteria listed at the website.
His suggested investments include common stocks such as Altria Group, yielding nearly 6 percent, and Phillip Morris International, yielding 4.65 percent. Of course, you have to be willing to invest in the tobacco industry. But he notes even AT&T, with a yield of 5.95 percent, and Chevron, paying 3.2 percent, make his list of investments with upside potential that give you a lot more return for your money than bank deposits. Of course, there is also a downside risk.
All Moneyshows are free and open to the public, subsidized by the exhibitors’ booths. There are some events set aside for paying guests at the “Investment Masters” portion of the program. The next show is in Orlando, on Feb. 9-12. For investors it’s a veritable Disneyland of ideas, advice and enticements. Go to www.Moneyshow.com for more information.
There’s nothing like being overwhelmed with possibilities, warns show chairman Kim Githler, who suggests that everyone go home and think calmly before jumping into any new investments. Good advice, and that’s The Savage Truth.
Terry Savage is the Chicago Sun-Times’ nationally syndicated financial columnist, and a registered investment adviser. Post personal finance questions on her blog at www.TerrySavage.com and blogs.suntimes.com/savage.