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The Letter Creating income for today, wealth for tomorrow | Issue 36, march 2016 The Stock So Nice, We’ll Buy It Twice by Marc Lichtenfeld, Chief Income Strategist, The Oxford Club Dear Member, Sometimes in life you get a second chance. And you don’t even have to have screwed it up the first time. In college, my wife and I dated for three years. It was the best time of my life. After we graduated, I moved to New York and she moved to California. Life took us in different directions, so we went our separate ways. Then, nearly three years later, she called me unexpectedly at 3 a.m. Yada yada yada, we’ve now been married for 20 years. It happens in the business world too. I’ve seen quite a few people leave my company, realize that we’re the ones with the green grass and come back. Often, they come back quickly. And in the stock market, many of us have bought and sold shares of the same company more than once. Sometimes it’s a stock with a trading pattern we’re familiar with. Other times it’s an investment that we shouldn’t have sold in the first place or that is simply offering us an opportunity to get back in at a better price. MARC LICHTENFELD “Reunited and it feels so good Reunited ’cause we understood There’s one perfect fit And, sugar, this one is it We both are so excited ’Cause we’re reunited, hey, hey” – Peaches & Herb The latter is what we’re doing today. Like in my relationship with my then-girlfriend and now-wife, we’re going back to what worked well before. And if the stock turns out anywhere near as well as my marriage has, you’ll be extremely happy. When I first launched The Oxford Income Letter, I recommended – as I often do – a contrarian stock. This was a company whose products were considered dinosaurs. Wall Street hated it, and no one really paid attention to it. In September of last year, we sold it for a 40% gain after the company agreed to be acquired. But like that unexpected late-night phone call I received many years ago, recent events have opened the door to a reunion. After we sold it from our portfolio, the acquisition collapsed and so did the stock price... Healthy Projections PG 4 The Hard Questions PG 6 Oxford Income Mailbag PG 8 March Madness PG 11 MARC’S DIRECTIVE ON DIVIDENDS And we now have the chance to buy it 23% lower than where we sold it and collect a 5% annual dividend yield. are wrong. And they have been for years. Meredith’s Readership The company we’re getting back into is Meredith Corp. (NYSE: MDP). ■ = Mobile ■ = Online ■ = Print Audience (in Millions) In September, Meredith announced it would be acquired by Media General (NYSE: MEG) for $51.53 per share. 200 175 But in January, Media General agreed to be acquired by Nexstar Broadcasting Group (Nasdaq: NXST). That left Meredith without a dance partner, but Media General at least gave Meredith cab fare home – that is, a $60 million breakup fee. 150 125 100 75 So Meredith will continue to operate its magazines and online properties geared toward women, as well as its 17 local television stations. 2009 Never Assume 2010 2011 2012 2013 2014 2015 50 Source: Meredith Corp. Its magazines and digital content should be the envy of the publishing world. With household-name publications, like Family Circle, Better Homes and Gardens, and Parents, as well as popular online sites, like MarthaStewart.com, RachelRayMag.com and AllRecipes.com (the recipe site with the most traffic on the Web), Meredith’s brands reach 100 million women per month and 60% of millennial women. Perfect Time to Go Local Meredith owns 17 TV stations in fast-growing markets, including My5 in Saginaw, Michigan, Fox 12 in Portland, Oregon, and CBS46 in Atlanta, Georgia. Business is strong in TV, in part because of political advertising. It’s been said no candidate ever lost an election because they were on TV, but they have lost because they weren’t. In addition to its vast publishing offerings, the company licenses its brands on more than 3,000 products. And this year, TV ad spending is off the charts: The company is an expert on data and helps its advertisers improve their marketing with properly targeted messages that increase their results. Meredith has an advantage over many of its competitors: Because it has such a wide reach, Meredith’s data is its own. It doesn’t have to go out and purchase data on customers. In other words, Meredith knows its audience and therefore can be a more effective partner with advertisers. There’s an assumption on Wall Street that because Meredith is a magazine publisher, its business is going the way of the typewriter, the pager and the VCR... • In 2012, presidential candidates spent $2 million in New Hampshire leading up to the primary. This year, they spent $100 million. • One mayoral candidate in Baltimore has already spent $600,000. • And 10 days before the South Carolina primary, Republican candidates had already tripled the amount spent on TV advertising in the Palmetto State in all of 2012. But as you can see from the chart below, even though Meredith is growing its online presence, it is increasing the number of subscriptions to its printed products. But it’s not all political dollars. Meredith’s local media business generated 10% revenue growth in the second quarter – not including political advertising – and set a new company record at $104 million. So all those analysts who think its print business is dying So it’s not just Ted Cruz and Hillary Clinton who are 2 MARC’S DIRECTIVE ON DIVIDENDS Spending Shift: Total Political Ad Dollars in Each Election Year ■ = Broadcast TV ■ = Cable ■ = Digital Billions $6 $5 $4 $3 $2 $1 $0 2008 2012 2016E Source: Borrell Associates, The Wall Street Journal buying ad space on local TV; it’s Bob’s Discount Mattresses, the local Chevy dealer, and personal injury lawyers Dewey Cheatham & Howe. the payout ratio. It means that for every dollar in free cash flow, the company paid out just $0.50 in dividends. I like to see a payout ratio of 75% or lower. So that 50% level means the company has plenty of room to raise the dividend, even if cash flow doesn’t grow like it’s expected to. Three Years Later, Wall Street Still Hates It As a result, I believe Meredith can easily hike its dividend by double digits for the foreseeable future. When I first recommended the stock in 2013, Wall Street hated it. And yet, after the company has done nothing but perform, receive a 12% premium takeover offer and continue to raise its dividend, the lunkhead sell-side analysts still haven’t learned their lesson. It just raised its dividend last month to $1.98 annually, which equals a 5% yield. Meredith has paid a dividend for 69 consecutive years, and the latest increase was its 23rd straight annual boost. Only one out of seven analysts rates the stock a “Buy.” That gives us opportunities for price increases on future upgrades. Based on my assumptions for dividend growth and share price growth (which are based on the historical broad market average), in 10 years, without dividends reinvested, the yield on original cost will be 15.1%. It’s hard to imagine why they don’t like it. Earnings per share is expected to grow more than 16% in fiscal 2016 (ending in June). And free cash flow is forecast to grow an average of 20.6% per year over the next two years. If dividends are reinvested, the yield will be 26.8% and investors will have earned a 14.3% annual total return, turning $10,000 into $37,906. A Perfect Fit for 10-11-12 Action to Take: If you haven’t already, buy Meredith Corp. (NYSE: MDP) at the market and add it to the Instant Income Portfolio and Compound Income Portfolio. Place a 25% trailing stop on the position in the Instant Income Portfolio. We will not use a trailing stop in the Compound Income Portfolio. ■ All that cash flow means Meredith will have no problem whatsoever paying and raising its dividend. In 2015, the payout ratio was 50.3%. That’s based on free cash flow, which is the most conservative way to calculate 3 STEVE’S INCOME INSIGHTS Balancing the Quantity and Quality of Your Retirement Years by Steve McDonald, Bond Strategist, The Oxford Club M y genetic makeup is one of my greatest fears. Well, for 30-plus years, anyway. No, there aren’t any dreaded diseases in my family. In fact, back in the early ‘90s, I joked with my internist that, except for my great-uncle Joe – who was hit by a train – no one in my family dies. But the part that has never made sense to me has been how one rule can work not only for every possible health and life expectancy scenario, but also for the unforgiving and unpredictable nature of inflation and the markets. I wasn’t kidding! I was well into my 40s and only my 98-year-old grandmother had passed, back in 1983. STEVE MCDONALD So does the 4% rule always work? In fact, every one of my mother’s and father’s siblings – there were 11 – lived into their late 80s and 90s. A Problem With the 4% Rule? And believe me: These were not health nuts; rather, they were smokers, drinkers and red meat lovers, all! Most never went to a doctor. Well, Fidelity recently released a study that says it doesn’t. There have to be adjustments to it, and, not surprisingly, the adjustments include expected survival age, how much assurance you want that you won’t run out of money and, of course, risk tolerance. And Fidelity actually quantified each of those adjustments. I have made matters even worse. I get regular checkups, exercise and watch my diet – a little, nothing too crazy. I’m not obsessed, but I do pay some attention to my health. My life expectancy has to be well into the 90s. So why, you ask, is knowing my genetic makeup and following my relatives to a very late grave my greatest fear? First, here’s where the 4% rule came from. If you withdrew 4%, according to Fidelity’s numbers, you would get 32 years from your money. Life Expectancy, Savings and the 4% Rule But, if you retire later, at age 70, the Fidelity numbers indicate you could withdraw 4.6% and still safely get 25 years of withdrawals. I spend every day of my life reading and writing about how much it will cost to live into my 90s. Believe me, unless you do a lot of things right, it is not a pretty picture. That gets you to age 95, and 0.6% is $3,000 more per year on a $500,000 portfolio, plus you’ll get a lot more from Social Security by retiring at 70. Which brings me to the “4% rule,” the widely accepted way to not wake up broke in your 80s. Sounds pretty good, right? Well, here come the curves. What if 4% or 4.6% isn’t enough cash to pay your bills? What if health issues run you dry? And, maybe most important, this model assumes a very high percentage of your money is in the stock market. That can be real trouble. The rule is simple: You may withdraw up to 4% of the value of your assets (savings, cash and investments) each year. Further, increase that amount (not the percentage) by the inflation rate every year, beginning in year two and continuing until your death. As you’ll see, the more you have in stocks, the less predictable your return and the more likely it is you’ll run out of money. If you do that, you should not run out of money during your lifetime. 4 STEVE’S INCOME INSIGHTS The chart below shows various withdrawal rates and the expected success rates for each: 99%, 90% and 50%. The next chart says it all about the life expectancy variable. Early Retirement Limits Withdrawal Power Balancing Risk and Savings Maximum Sustainable Withdrawal Rate ■ = Conservative ■ = Balanced ■ = Growth 5.0% Withdrawal Rate 6% 4.5% 4% 4.0% 2% 25 Years 0% 30 Years 35 Years 3.5% Planning Horizon Successful in 99% Successful in 90% Successful in 50% of Simulations of Simulations of Simulations (Success rate is a measure of making it through retirement without running out of money.) This isn’t brain surgery; the earlier you retire, the lower the income from your investments has to be and the lower your Social Security benefits will be. The most attractive to me is the 90% success rate – the middle bar graph – with a balanced portfolio: 50% stocks, 40% bonds and 10% cash. One of the best recommendations from Fidelity’s study was to try to pay your essential expenses from your guaranteed sources of income: pension, annuity and Social Security. It gives me more than a 4% withdrawal rate and enough stock to allow for some growth, as well as a very high success rate and “sleep factor.” That way, the amount you withdraw from your holdings is discretionary and can fluctuate as needs arise or, hopefully, don’t arise. The most aggressive holdings and highest withdrawals with the 50% success rate – the last grouping – give me the creeps. This portfolio is 70% stocks, 25% bonds and 5% cash. But you won’t be hanging on the market’s whims for your survival. Make Your Money Last: A Minimalist’s Guide Yes, it has the highest withdrawal rate (6%), but a 50% success rate looks like a greater chance of waking up broke in my 80s. Here are the minimum steps you must take when looking at how long your money can last: The lowest-risk portfolio, with the 99% success ratio, is 20% stocks, 50% bonds and 30% cash. That looks like life on a tight budget and too little growth to keep me safe. 1. Create a realistic estimate about how long you expect to live. Add five years just to be safe. 2. Decide on how much risk you can tolerate. This past January should serve as a good baseline for that “swag.” But, as almost all retirement scenarios do, it comes down to when you retire and how long you expect to live. For planning purposes, for me anyway, it only makes sense to shoot for the stars on life expectancy. 3. Choose investments that fit your honest evaluation of your risk tolerance. Most investors shoot for the stars or are too safe, and both will cost you dearly going forward. continued on Page 10 Because if you end up living longer than you expect, all your other planning will be negated. 5 IN FOCUS The Important Conversation You Need to Have And It Has Nothing to Do With Money by Marc Lichtenfeld, Chief Income Strategist, The Oxford Club M y buddy Rich had just arrived at the hospital. He had come straight from the airport where he’d flown cross-country after getting a call from his father. His mom, who had been battling stage 4 lung cancer for nearly a year, was in the intensive care unit. She was not doing well. The previous year had been filled with ups and downs, as is the case for most late-stage cancer patients. But lately, there were many more bad days than good. Her quality of life had deteriorated badly over the past couple of weeks, and he was prepared for the worst. But when he got to her room, what he found was even beyond what he’d expected. His mother’s kidneys were failing, so the doctors had put her on dialysis. • Nearly one-third of terminally ill patients with insurance used up all of their savings to cover uninsured medical costs. • Up to 30% of Medicare costs are spent on patients in the last year of their lives. • In 2008, Medicare spent $55 billion on hospitals’ and doctors’ bills for patients in their final two months of life. • 40% of Medicare costs cover patients in their last month. How many unnecessary tests, procedures and medications are given to patients who barely benefit from them or don’t benefit at all? To Rich, this was worse than “the worst.” Even with fully functioning kidneys, she likely had only a few weeks left – weeks she’d spend mostly lying in bed, doped up with pain medicine, and enduring all of the problems that accompany end-stage cancer and drugs. Yet the doctors were insistent on “saving her life” by putting her on dialysis. Of course, end-of-life care is far from just a financial decision. We all know people who fought for every last minute on Earth that they could. And there’s nothing wrong with that. The instinct to survive is strong. But for some, they reach a point where the fight is over. Or they don’t even know they’re in a fight because they are either unconscious or have severe dementia. Rich was pretty sure this was not what his mother would have wanted. The intrusive and expensive treatments were drawing out the inevitable. His mother wasn’t even conscious to voice her opinion. It’s not pleasant to think about and is even less appealing to talk about with loved ones, but it’s important to discuss with them what you want in the event that you are unable to make decisions for yourself. Sadly, this is the case for many people with terminal illnesses. Patients with severe dementia are also routinely given life-prolonging treatments when these may not be what they would have wanted. For example, some people have a “do not resuscitate” order. You can even get a wristband that instructs paramedics not to perform CPR or use a defibrillator. In the book Knocking on Heaven’s Door, Katy Butler describes the tremendous toll an implanted pacemaker had on her father, who was already disabled by strokes and dementia. The complications had dire consequences for the family as well. It was an emotional and financial drain. And sadly, her father was just one of many who have gotten caught up in the system of saving lives at all costs. Obviously, if you have a tee time tomorrow, tickets for the theater next week and plans to fly to see the grandchildren over the summer, you’re probably willing to put up with a bit of chest pounding and electric shock to give you a few more years should your heart stop beating. But imagine you don’t recognize your children anymore and need help with all of your basic life functions. And those end-of-life costs total up to big bucks: 6 IN FOCUS Do you want the paramedics to do everything they can to save you? That’s a choice only you can make now, and you should talk about it with your spouse or loved ones who may have to make that call on your behalf. patient and their family who want to refuse care. The drug and medical device companies push their products so their revenues go up. Hospitals have an incentive to provide every service possible so they can bill the insurance companies. And, again, doctors are worried about being sued. Keep in mind, doctors will often perform every trick in the book to keep you alive. Some do it because they believe it’s their duty to do so. Others so they won’t get sued. They may even override some of the family’s decisions. It sometimes requires a strong person to reject the pressure to take invasive, painful and costly measures that will extend life but do nothing to improve the quality of life. But knowing the desires of the patient and having them explicitly written out in a legal document signed by a physician will make facing that pressure much easier. It will also make it more likely that the patient will have a more comfortable experience when the time comes, versus being stuck in an ICU, hooked up to lots of machines. That’s why it’s so important to have your wishes written in a legal document. One well-known legal document is an advanced directive, or living will. But there’s a better one you can use to increase the chances that your requests will be granted. Ensure You Get What You Want Many people fear that scenario more than death itself. A bit of a depressing topic, I know. But you want to have those conversations now rather than make decisions under severe stress. The most comprehensive document you can get is called a Physician Orders for Life-Sustaining Treatment. This document is signed by a physician as well as the patient. It gets very specific and covers respirators, feeding tubes, antibiotics, etc. You can also check a box that says you should be given comfort measures only. I’m planning on sitting down with my parents in a couple of weeks to go over every scenario we can think of so I can be sure that I am carrying out their wishes. Hopefully this is something we won’t have to deal with for another decade or so, if ever. But I want to be prepared. They have done so much for me in my life; I want to be sure I’m honoring and helping them if they can no longer help themselves. There is a national organization that can help you gather information and resources. Its website is here: www.polst.org. You also want to get a “durable power of attorney for healthcare,” also known as a medical guardianship or healthcare proxy. This will allow a designated person to make healthcare choices for you. If they want to fight up until the last minute, then I’m going to be there fighting with them. But if not, I’m going to make sure they’re as comfortable as I can make them, no matter what a hospital administrator or a doctor – who doesn’t even know my mom or dad – says. ■ The healthcare system can be stacked against a suffering A Special Invitation From Marc Lichtenfeld… As I’m sure you’ve heard by now, The Oxford Club is hosting its 18th Annual Investment U Conference this coming April 13-16 at the luxurious Park Hyatt Aviara in Carlsbad, California. Personally, I couldn’t be more excited. That’s because there’s a very good chance that this year’s event could help you unlock massive profits in 2016 and beyond. In fact, just last year, attendees had the chance to score double- and triple-digit gains on 55 of the recommendations made – in about six months. Today, I’d like to offer you a front-row seat to this event so you can personally be there when more than two dozen world-class investment experts reveal their latest recommendations for the first time. For more details on what the other speakers and I will be discussing, simply go here now. 7 The MAILBAG We believe it’s good to share questions and clarifications on dividend-investment strategies with all our subscribers. Keep in mind, Marc can answer your general strategy and service questions, but he cannot give personalized advice. As always, feel free to send us emails at [email protected]. I received several questions about my decision to sell the Seagate Technology (Nasdaq: STX) position from our Compound Income Portfolio. If you will not be putting more money into the portfolio, then you may want to start off with a more diverse portfolio. If you’ll be making regular contributions, you may decide to start with just a few and add more later. Simply put, I lost confidence in the company’s ability to perform. It happened rather quickly. In the company’s earnings release, it was apparent to me that the demand for hard drives was way lower than I expected... But I definitely suggest having a diversified portfolio that isn’t concentrated in just a small number of stocks. Having just a few stocks isn’t a big deal if you’ll be adding more later on, but you definitely don’t want to leave your portfolio in that situation for very long. For the second quarter, cash flow from operations and free cash flow were down from the same periods in 2015 and 2014. Q: I am taking early retirement this year at 59 and plan to live off my dividends until I start collecting Social Security. I have several questions about what types of accounts I should keep some positions in: Numbers from one quarter do not make me bail on a stock, but the fact that I was already beginning to question whether the company would be able to generate enough cash flow over the long term didn’t help. 1. Taxable account It seems your Instant Income Portfolio would be the best short-term choice, but your average yield at 4.8% is lower than the forward 12-month dividend yield of 5.56% I currently have. It seems a combination of Instant and High Yield is the better choice? When I recommend a stock that is a turnaround story, I see the light at the end of the tunnel. In Seagate’s case, that light quickly dimmed, and I wasn’t sure I’d see it again. Q: The Compound Income Portfolio has a large number of stocks comprising the portfolio. If someone had $10K (for example) as an initial investment, is it better to take a larger holding of a subset of the portfolio or to buy only a few shares of the entire portfolio? 2. IRA/401(k) I’ll keep this until I need to start withdrawing in five to 10 years. This seems best-suited for the Compound and/or High Yield, since it is a high dollar value. Is it? – David 3. Roth Since it is such a low dollar value ($12K), I’m not sure what to do with this one. Marc responds: That will depend on your trading costs and if you are going to be putting more funds into the account. For example, someone who uses an online broker that charges $10 per transaction may decide to start with more stocks than someone who pays $100 per transaction with a full-service broker. Nothing I have fits the 10-year minimum recommendation I think I took away from using the Compound Income Portfolio. It does have a great yield and growth, but seems to then “conflict” with Instant in yield and growth. There 8 MAILBAG seems to be much overlap, thus a little confusion in my choosing. recommendations in my own. I really appreciate the information you share on taxes, and I found the October issue and this February’s very helpful. I just read in the January Oxford Income newsletter about using trailing stops only in the Instant and High Yield, and not in the Compound... due probably to the 10-plus year time frame of compounding. However, I think it would be awesome if there were a way for you to distinguish where to have them invested on your portfolio update page at the back of the newsletter. Maybe you star them or bold them, but having some way of showing the ones that should be kept tax-deferred vs. taxable would be great. Lastly, are the trailing stops considered a way of diversifying the portfolio? – Craig Thanks so much for all your insight. Marc responds: – Justin As you’re probably aware, I can’t give personal advice. What I can tell you is this: The Instant Income Portfolio is for investors who need the dividend income today. The Compound Income Portfolio is for investors who can reinvest the dividends for at least five years, though 10 is optimal. The Retirement Catch-Up/High Yield can be used for either. Marc responds: I guess great minds really do think alike. We were in the process of getting this idea set up when your email came in. Starting with this month’s issue, we’ll have a column in the portfolio that suggests which account type is optimal for each particular stock. It should be noted that the Retirement Catch-Up/High Yield Portfolio has higher risk than the other two. Regarding your current yield of 5.56%, I have no idea of the risk associated with that portfolio, how diversified it is or if your dividends are growing, so I can’t comment. Of course, it will vary depending on your personal situation. For example, this month’s recommendation of Meredith may be suggested to be put in a tax-free account so that you don’t pay taxes on the dividend. But if you have already maxed out your contributions to your IRA or 401(k), you’ll have to put it in a taxable account. I’m not clear what you mean when you say that the Instant Income Portfolio “conflicts” with the Compound Income Portfolio. Both portfolios adhere to my 10-11-12 System. The Instant Income Portfolio is designed to generate 11% yields within 10 years. The Compound Income Portfolio is expected to achieve 12% average annual total returns within 10 years. It’s still suitable for a taxable account, but the tax efficiency is maximized in an IRA or other retirement account. Q: If you’re past retirement age, isn’t it too late to consider reinvesting dividends? The trailing stops are not meant to diversify the portfolio, but to ensure that small losses don’t become big ones. In the Compound Income Portfolio, we are willing to let a stock go lower than our traditional 25% stop because as long as we remain confident that the company can continue to grow its dividend and we have a long time horizon, the lower stock price means we get to buy a lot more stock with our reinvested dividends. – Patti M. Marc responds: Not at all. It depends on your individual needs. If you require the income that the dividends produce, then you’re right: You would not reinvest the dividends. I hope that’s helpful. But if you don’t need the income for five years or more, reinvesting the dividends is the best way I know to grow a nest egg so that it will spin off more income when you need it. ■ Q: Good afternoon. As a Chairman’s Circle Member, I must say, I love your income portfolios and have many of your 9 PORTFOLIO REVIEW The Oxford Income Letter: PORTFOLIO REVIEW By Marc Lichtenfeld, Chief Income Strategist, The Oxford Club, with Patrick Little, Managing Editor, The Oxford Income Letter I t’s March. The madness is upon us. Those who read the February 25 Oxford Income Weekly know that Crown Castle CEO Ben Moreland is retiring soon and that Jay Brown will be taking over on June 1. Brown is a veteran of the company, and Moreland will stay on as executive vice chairman for the foreseeable future. If you’re a fan of college hoops, you know the pressure is on for each team to come up with plays that will get them the win. Many times, a coach’s best bet is to give the ball to the “hot hand” – that player on the floor who’s in the zone, who doesn’t seem able to miss no matter what happens... In other words, the transition will be seamless, and Crown Castle’s hand should continue to be hot. Mergers and Acquisitions Ahead? Right now, on our team of all-stars, Crown Castle International (NYSE: CCI) is the hot hand. Because lately, it doesn’t seem like the company can miss. These days, it seems like major mergers and acquisitions are hardly newsworthy. In 2015, they happened so regularly – especially in healthcare – that many investors likely stopped taking notice. Since we added the cellphone tower real estate investment trust in November of last year, the company’s shares have gone up 10%. The company raised the dividend 8%, so shareholders now get quarterly payouts of $0.885 per share. AbbVie Inc. (NYSE: ABBV), a member of our Compound and Instant Income portfolios, recently acquired Pharmacyclics, a one-drug company whose success was the envy of the industry (as readers of January’s issue will remember). In early February, Forbes called Crown Castle and Digital Realty Trust (NYSE: DLR) – another of our positions – two REITs “to buy and hold forever.” Now it looks like AbbVie is close to forming a cancer treatment partnership with Boehringer Ingelheim, a German-based pharmaceutical company that specializes in treatments for lung cancer patients. Boehringer also happens to be one of the 20 leading pharma companies in the world. Still need more signs of a hot hand? How about the fact that Crown Castle can serve the same product to multiple customers at once? In other words, the company can book a cellphone tower for a second or third customer (think Verizon, AT&T or T-Mobile) and not have to worry about additional infrastructure or operating costs. Few other businesses can boast the same sort of opportunity. Imagine if a carmaker could sell the same car to two customers. The deal is not yet final, but I will be sure to keep you informed of any major developments and how they may affect our position. ■ Balancing the Quantity... continued from Page 5 4. Choose the withdrawal rate that will give you a success rate that lets you sleep at night. Spending 25 or 30 years lying awake at night worrying about money is not living. Not to me, anyway. the risk of that happening. As an aside, I lost the last of my father’s family in 2015. She was 94, a smoker all her life, and she loved beer, chocolate and Texas wieners from the Green Ridge Lunch. The possibility of being broke in our 80s is a very scary thought. Make the right calls now to minimize I wonder if Fidelity has a 40-year scenario for me... ■ 10 PORTFOLIOS The Compound Income Portfolio Dividend reinvestment for tomorrow. Company/Ticker Avg. Yield on Rec. Price: 5.0% Projected Annual Dividend Growth: 9.2% Avg. Yield on Curr. Price: 5.8% Dividends Raised Annually for an Avg. of 10.0 Years Rec Date Rec Price Current Price Current Yield Rating Trailing Stop Total Gains Suggested Account Type* AbbVie (NYSE: ABBV) Jan-2016 $57.21 $54.61 4.2% Buy None -3.5% Tax-deferred AT&T (NYSE: T) Feb-2014 $32.08 $36.95 5.2% Buy None 28.2% Tax-deferred BCE Inc. (NYSE: BCE) Nov-2013 $43.66 $43.12 4.6% Buy None 11.7% Taxable Brookfield Infrastructure Partners (NYSE: BIP) MLP Apr-2013 $37.80 $37.65 6.1% Buy None 13.8% Taxable Chevron (NYSE: CVX) Nov-2014 $117.87 $83.44 5.1% Buy None -25.1% Tax-deferred Covanta (NYSE: CVA) Aug-2014 $20.65 $13.93 7.2% Hold None -27.2% Tax-deferred Darden Restaurants (NYSE: DRI) Aug-2013 $49.05 $63.88 3.1% Buy None 43.5% Tax-deferred Digital Realty Trust (NYSE: DLR) REIT Jan-2014 $49.47 $79.07 4.5% Buy None 77.3% Tax-deferred Eaton Corp. (NYSE: ETN) Oct-2015 $51.40 $56.71 4.0% Buy None 11.4% Taxable Four Corners Property Trust (NYSE: FCPT)# Nov-2015 - $16.41 4.9% Hold None - Tax-deferred Mattel Inc. (Nasdaq: MAT) Jul-2014 $39.56 $32.52 4.7% Buy None -10.7% Tax-deferred Meredith Corp. (NYSE: MDP) Feb-2016 $43.27 $43.49 4.6% Buy None 0.5% Tax-deferred Northwest Bancshares (Nasdaq: NWBI) Jul-2015 $12.73 $12.59 4.8% Buy None 2.3% Tax-deferred Omega Healthcare Investors (NYSE: OHI) REIT Sep-2013 $28.37 $32.06 7.1% Buy None 31.3% Tax-deferred Raytheon Co. (NYSE: RTN) May-2013 $61.66 $123.85 2.2% Hold None 113.6% Tax-deferred STAG Industrial Inc. (NYSE: STAG) REIT May-2015 $21.66 $17.56 7.9% Buy None -14.3% Taxable Texas Instruments (Nasdaq: TXN) Apr-2013 $34.15 $53.02 2.9% Buy None 68.5% Tax-deferred The GEO Group (NYSE: GEO) REIT Mar-2015 $43.52 $29.04 9.0% Buy None -27.7% Tax-deferred Tupperware Brands Corp. (NYSE: TUP) Feb-2015 $71.42 $48.65 5.4% Sell None -28.5% Tax-deferred Williams Partners L.P. (NYSE: WPZ) MLP Apr-2013 $59.15 $19.72 17.2% Buy None -58.9% Taxable W.P. Carey (NYSE: WPC) REIT May-2014 $61.89 $56.69 6.8% Buy None 1.6% Tax-deferred 11 Avg. Yield on Rec. Price: 4.8% Projected Annual Dividend Growth: 11.0% Avg. Avg. Yield on Curr. Price: 4.6% Dividends Raised Annually for an Avg. of 12.5 Years The Instant Income Portfolio Income for today. Company/Ticker Rec Date Rec Price Current Price Dividends Collected Current Yield Rating Trailing Stop Total Gains Suggested Account Type* AbbVie (NYSE: ABBV) Jan-2016 $57.21 $54.61 $0.57 4.2% Buy $44.12 -3.5% Tax-deferred Digital Realty Trust (NYSE: DLR) REIT Jan-2014 $49.47 $79.07 $6.72 4.5% Buy $61.39 73.4% Tax-deferred 2016 $43.27 $43.49 $0.50 4.6% Buy $32.92 1.7% Tax-deferred Nippon Telegraph and Telephone Corp. (NYSE: NTT) ADR Apr-2013 $21.59 $42.71 $2.38 1.8% Hold $33.79 108.9% Taxable Raytheon Co. (NYSE: RTN) May-2013 $61.66 $123.85 $6.08 2.2% Hold $96.18 110.7% Tax-deferred STAG Industrial Inc. (NYSE: STAG) REIT May-2015 $21.66 $15.57 $1.03 7.9% Sell $15.66 -23.4% Taxable W.P. Carey (NYSE: WPC) REIT May-2014 $61.89 $56.69 $6.62 6.8% Buy $51.84 2.3% Tax-deferred Meredith Corp. (NYSE: MDP) The Retirement Catch-Up/High Yield Portfolio Emphasis on current high yields. Company/Ticker Avg. Yield on Rec. Price: 8.7% Avg. Yield on Curr. Price: 9.0% Rec Date Rec Price Current Price Dividends Collected Current Yield Rating Trailing Stop Total Gains Suggested Account Type* Crown Castle International (NYSE: CCI) Sep-2015 $80.80 $86.50 $1.71 4.1% Buy $66.00 9.2% Tax-deferred Eaton Vance Tax-Managed Global Diversified Equity Income Fund (NYSE: EXG) Oct-2013 $9.56 $8.13 $2.36 12.0% Buy $7.01 9.7% Taxable Ferrellgas (NYSE: FGP) Feb-2016 $15.16 $18.54 $0.00 11.1% Buy $13.99 22.3% Taxable National General Holdings Corp. 7.5% Preferred Series B (Nasdaq: NGHCO) Jun-2015 $25.04 $25.13 $1.50 7.5% Buy $19.20 6.4% Tax-deferred New Media Investment Group (NYSE: NEWM) Nov-2015 $17.10 $14.82 $0.33 8.5% Sell $14.98 -11.4% Tax-deferred New Mountain Finance Corp. (NYSE: NMFC) Jun-2014 $14.46 $12.48 $2.50 10.9% Buy $10.67 3.6% Tax-deferred Prices as of 2/29/2016. Trailing stops are adjusted to reflect dividends collected. # Spinoff from Darden Resturants † Prices adjusted for stock split. ADR – American Depositary Receipt. MLP – Master Limited Partnership. REIT – Real Estate Investment Trust. mREIT – Mortgage Real Estate Investment Trust. *We created the “Suggested Account Type” column in the spirit of The Oxford Club’s fourth Pillar of Wealth – to cut expenses and stiff-arm the taxman. This column denotes the suggested account type in which to hold each position for tax purposes. Please note, stocks that are suggested for tax-deferred accounts may go into taxable accounts if necessary. Stocks suggested for taxable accounts should generally not be put in tax-deferred accounts. Everyone’s situation varies, so please consult your tax professional or financial advisor before you invest. The Oxford Club LLC provides its Members with unique opportunities to build and protect wealth globally, under all market conditions. We believe the advice presented to Members in our published resources and at our seminars is the best and most useful to global investors today. The recommendations and analysis presented is for the exclusive use of subscribers. Subscribers should be aware that investment markets have inherent risks and there can be no guarantee of future profits. Likewise, past performance does not secure future results. Recommendations are subject to change at any time, so subscribers are encouraged to make regular use of our website, www.oxfordclub.com. © 2016, The Oxford Club LLC | 105 W. Monument St., Baltimore, MD 21201 | 855.837.7115 Chief Income Strategist Publisher Bond Strategist Editorial Director Managing Editor Assistant Editorial Director Marc Lichtenfeld Julia Guth Steve McDonald Andrew Snyder Patrick Little Amanda Heckman Assistant Editor Event Director Director of Research Senior Graphic Designer Graphic Designer Anne Mathews Steven King Chris Matthai Alison Kassimir Chelsea Centineo Protected by copyright laws of the United States and international treaties. 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