Why Invest in Master Limiter Partnerships?

A Master Limited Partnership (MLP) company is one that operates on the periphery of the industry. MLPs do not own any commodities. They are the suppliers, the transporters, the storage facilities, and the processing or refining companies. In the oil and energy industry, for example, an MLP company is one that provides oil storage facilities. The reasons these companies are a smart investment is that they involve reduced risk while still having the potential to provide high yields. Think about it for a minute. Regardless of the price of oil, it has to be stored somewhere. The returns are not drastically affected by the performance of the commodity.

That is not to say there is no risk, because investments will always carry risk, but the stocks are not as volatile as they are for the specific commodity. Another benefit to MLP investing is a tax loophole that allows people to permanently avoid paying taxes on eighty to ninety percent of the return. That keeps more money in the pockets of investors or gives them more profit to re-invest if they desire. As with all companies, there are some MLPs that are more successful than others. Knowing which ones are high yielding will result in higher returns. A stock broker could provide recommendations based on in-depth reports, the history of the company, and recent trends in the industry. That service can be costly, especially if the broker handles all the investments.

Online trading sites provide reports, articles on developing an investment strategy, and up-to-date pricing. The information is valuable but not as specific as some would prefer. Another option is websites that focus on specific industries. A membership to a reputable site is cost-effective, convenient, and can result in investors getting an early start on purchasing stocks for a particular company. Alerts via Email or texts, explanations of how the company fits into the big picture, and additional hints are provided by experts in the field. Research a few sites before paying for a membership. Compare the quality of the information, the credentials and experience of contributors, and the success rate of companies recommended in the past.