Investments

Master limited partnerships (MLPs) can offer the investor an attractive income stream plus tax benefits. Tax on 80% of distributed income is deferred (until partnership shares are sold); the investor pays ordinary income taxes on the remaining income. Each year, partnership investors must fill out Form 1065 (Schedule K-1) to declare partnership income. MLPs pay out 5–6% a year and are projected to also enjoy 5–6% annual appreciation (source: Morningstar).

Master limited partnerships (MLPs) are popular because of their high payouts that qualify for favorable tax treatment. The Alerian MLP Index (symbol AMZ) cannot be invested in directly, but the JPMorgan Alerian MLP ETN tracks this index (symbol AMJ). As of March 2013, AMJ had a 4.7% dividend vs. 2.0% for the S&P.

At the end of WWII, while most of the world lay in ruin, the U.S. accounted for 25.6% of the planet’s industrial output. By 1970, America’s global manufacturing share stood at 22%—where it has remained for the past four decades. The 22% figure also means that the U.S. still represents the world’s largest manufacturer. 

Global exports make up ~ 13% of the $15 trillion U.S. economy. Of the $400 billion of U.S. affiliate income earned abroad (U.S. co. income earned from business operations), half comes from Europe and half comes from the rest of the world. The two largest contributors to U.S. affiliate income in Europe are the Netherlands (27% of Europe) and Ireland (16% of Europe). The European Union (EU) is China’s biggest export market, buying close to $300 billion in Chinese products in 2012.

The division of foreign markets into developed and emerging segments dates back to 1981, when Antoine van Agtmael, an economist at the World Bank, referred to third-world countries as emerging markets. In a 2011 performance study, the Aperio Group looked at 10 years of return data (12/31/2000 to 12/31/2010) from all active emerging markets mutual funds.