hey we are live the Sunday as we are every week here on let’s talk money at 1:00 p.m. Eastern 10:00 a.m. Pacific I want to thank everybody for joining us it just gives us a chance to talk about a topic of the week and then reach out to the community to answer some community comments and you know just have a have that back and forth that we don’t get to have in those regular videos thank you for being here I see some some people joining in go ahead and you know let us know where you’re coming at in the chats where you’re coming in from and I love to get started here like I said we do these every every Sunday 1:00 p.m. Eastern 10:00 a.m. Pacific and this week it’s going to be a something a little bit different from what we’ve been doing lately we’re gonna be talking about some of the easiest ways to get those high yields and and to minimize your risks in dividend funds you know so lately we’ve been talking a lot about you know individual stock picking picking stocks and this week this weekend we’re going to talk about you know kind of how to how to reduce some of your risks and still get those high yields with some of these funds got some great dividend funds lined up for you talking about you know what to look for some of the risks in them and then even if you’re not interested in you know dividend funds even if you’re you just want to pick stock still stick around because I’ve got a strategy that you’re going to be able to use to to use dividend funds and individual stock picking together to to really get the best of both worlds you’re gonna lower risk you can get market returns and less stress from those dividend funds but you’re still gonna be able to make those higher incremental returns from picking stocks so great strategy I use it myself and we’re gonna be getting to that right after we talk about these four these four dividend ETF funds that I that I like and that most of my invest in my portfolio as well see some some people coming in all good from Sealy Gregg from California Thank You Gregg for being here Greg’s a great member of the community always commenting and adding his a feedback into the videos love that darn ena how are you I saw you last week here ex-dividend Nina thank you everybody thank you for being here I want to get started because because like I said I’m really excited about this this talk about the dividend funds we love talking about stocks but but there’s a lot to be said for just you know getting a big portion of your portfolio in these funds to diversify your risk a little bit more stress-free investing strategy so we’re going to do I like we do on on every every livestream every week we’re going to start off with some community shout outs love the comments I get every week appreciate everybody everybody out there in the community with your feedback your advice even I mean this is a two-way street so I learned from you all the time then we’re gonna be highlighting a few of the videos we did last week and some preview of some of the videos coming up and then we’re gonna get into that dividend funds and that strategy to use funds and individual stocks and of course will always leave a leave time for individual Q&A at the end see some more well from Ireland I’ve got some Canon Canadians Queens New York thank you for being here and so so let’s start with those of those comments because because I again I love all the comments I receive I try to respond to each and every one and and got some great ones this week this first one is from badass which loved the love the screen name there and this was on our portfolio update last week we did talking about you know some strategies to avoid or strategies to survive the next stock market crash not saying it’s going to be yet this week this year but a stock market crash will come you know it’s just the nature of the markets and that human element in the market to get you know over exuberant and then you know obviously on the other on the other way down seeing the crash coming so just some strategies to talk about and why I think you know a stock market not necessarily a crash but you know weakness is coming over the next next year or so and in banos had to say you know the well there’s no crash well there hasn’t been a crash there has been a big difference in you know ratings and prices between sectors and geographic locations it makes the point that you know China and European financials like I talked about in the video we’re quite cheap you know and again I think you know this is a once in a lifetime where once in a generation opportunity to get into some of these domestic Chinese companies these companies that are going to benefit from that long term rise of China and European financial I mean they’ve been beaten down for so long they’ve got extremely low price to book value as compared to their US counterparts some of that is structural to Europe you know Europe has negative interest rates on a lot of their 10-year bonds so you know people are paying the government’s to hold their money you know in these in these ten-year Treasuries and obviously with financial companies with banks and insurance companies if they’re you know lending out on that short-term rate and getting their assets are in those long-term rights those long-term rates are near negative percentages then they’re not making any money but but some still some upside in European financials and you know madness makes the he makes the the comment that you know usually crash this happen when when the market is as expensive and nobody is expecting a downturn and the market doesn’t have this feel and I agree with some of that obviously you know that yeah it’s always great to it’s always best to look for value where you can find it so so some of those some of those sectors and some of those geographic areas like China like European financials even in the states like you know like maybe real estate and and some of the other sectors that aren’t very expensive you can look for value in there to help protect yourself from a you know stock market weakness or even a full-blown crash what I would say is that you know if you look at the history of stock market crashes typically there have been people that have been you know calling a bubble or calling a those over valuations the only problem is they’re wrong on timing you know you get you get all these guys coming on CNBC saying I called the the 2008 crash you know except they kind of leave out that they were calling in in 2003 because you know that’s when we started to see a lot of these these this asset bubble from the mortgages and those those collateral collateral debt obligations and and other derivatives start really giving out a hand of course you know they were five years too early so so you know I mean there there are people that expect a downturn that are calling for it it’s just the problem with time in there and I would agree though also that right now there aren’t there doesn’t look to be any huge forces that are pointing to a crash you know not there’s there’s no huge asset bubbles other than I will say the corporate bond market is is if you hear one thing most about asset bubbles and and how are how the market is overpriced right now it’s it’s in these in this corporate bond market you’ve had ten years of near zero rates through most of the developed world and especially here in the United States and corporations have just used that rightfully so you know to to borrow billions hundreds of billions even trillions in debt and then a lot of that is just going towards you know financial engineering so so buying back their own stock you know increasing their dividends and and those kind of programs so not necessarily things that they can use to to grow the company with that debt but just you know to make the balance sheet look better not necessarily to make the income statement look better earnings per share obviously when you buy back billions of your own stock then you’ve got less shares to spread those earnings over so earnings per share goes up so that’s you know a lot of what we’ve seen over the last ten years is that revenue so sales has been really flat I mean it’s been a really sluggish overall top-line economic growth but that earnings per share has continued to increase for for corporates because they’ve been buying back so much their own stock by issuing this debt and using that cash that earnings per share has gone up and of course you know then the stock market has gone up so corporate corporate debt is really a problem but you know with with rates where they are and likely to be lower for for quite a while you know the Fed is even talking about cutting rates now even further there doesn’t really seem to be that impetus to send that corporate bond market into a you know into a full-blown crisis and that kind of thing that doesn’t mean that we can’t get a 20% correction or a bear market technical bear market like we saw in last December just if you know earnings corporate earnings come down we were expecting to corporate earnings recession this year which is two quarters of negative corporate earnings growth and and a lot of those a lot of those things you know from the the trade wars and just a you know lower profitability among corporations that could easily send us into it you know a ten percent a twenty percent correction so not necessarily a crash maybe but there is some cost to be concerned and you know things you can do to a position for that so thank you badass love the screen name and I love the comment I appreciate that this is actually something we’re gonna look at in a little bit but I want to get to arson I could come in here from G Stroud great member of the community a fellow marine so awesome four five there but he’s a he’s asking here is a little confused about the taxation the taxation on REITs and MLPs how’s that different how do you use that in different portfolios and that kind of thing now I think what what kind of confused him here is in the 2019 stock market portfolio that we have the dividend portfolio and it’s group you know been doing excellent so far this year check it out if you haven’t seen that yet I think I leave a link in the video description below I have to check that out but but look for that because that’s you know 18 percent so far this year over the market by about 8 percent which is the S&P 500 is right around that 10 percent as of you know last week so I’ll perform in the market but what I’m doing in there is I’m holding an MLP fund so the al-arian MLP ETF the a MLP actually one of the funds will talk about later on in the in the livestream today and that is not a traditional MLP it holds MLP MLPs in the fund but it’s treated on a tax basis as a as a fund so that is taxed a little bit differently from MLP so generally with MLPs what you get and mo peas are an excellent investment I highly recommend I’ve got quite a few videos on the you know on the vid on the channel about it it’s basically there’s these midstream usually midstream assets so these companies buying up energy pipelines storage facilities processing that kind of thing and then they charge the the other energy companies fees to use those those assets and then they end up sending the majority of the profits off to investors that set up as a partnership so the MLP itself doesn’t get taxed on corporate earnings you don’t get that same double taxation that you get with other stocks right the corporations paying taxes and then you’re paying taxes on any money you receive from that so it might be a very efficient way to hold these assets and what I love about them is most of that dividend that you receive from MLPs is actually actually counted as a return of your investment so you get maybe a $2 dividend and I on it on a certain MLP each year right a dollar 60 of that it’s usually around 80% dollar 60 that is is going to be counted as a return of your what you invested in the company so it’s going to reduce the cost that you paid on the shares by a buck 60 no tax effects right there immediately now when you go to sell the shares then you’ll have higher capital gains tax because you know you bought the shares for lower and then sold them for higher there so and then the rest of your the rest of your dividends are counted as income so what you want to do with them Opie’s you want to hold those in a regular taxable account so you can take advantage of that capital gains tax and that special tax benefit now REITs on the other hand these a real estate investment trusts that hold real estate assets and their rent amount and send a huge dividend check to investors REITs a lot of that a lot of that dividend that you receive is often going to be counted as income okay it’s not necessarily qualified dividends like with a lot of your other dividend stocks that are that are lower tax rate so what you want to do with REITs is hold those in an IRA or a Roth some kind of a retirement account so you not paying taxes on those dividends until you withdraw those in in retirement so you know it’s a tax taxes are always a fun interesting subject I know but you know just some some things to understand things to remember to get the most out of your you know out of your dividends pay save a little bit on taxes and let me tell you you know working with private wealth clients when I when I used to do that with with high net worth individuals taxes is where it’s at taxes is where you save where you make the most money you know all the rest of us swaps out here paying our paying our taxes the rich they get rich by finding out these tax breaks finding out these tax strategies and using those to their advantage so so understand the difference between REITs and MLPs here and how to use them our next comment so thank you GE appreciate that and our next comment here is from Sean really talking more about the business side of things would you recommend setting up a business so so any kind of a business you start setting it up as like a sole proprietorship starting out or you know he’s cause a DBA or doing business as basically it’s it’s just everything from your business goes on your own taxes personal income taxes or would you set it up as an LLC S corporation right so so an LLC is a limited liability corporation it’s a pass-through part kind of a partnership kind of deal with this S corporation designation now I won’t don’t want to get too far into the the accounting and all that about it but but it is something to think about if you’re thinking about starting your own business and and I think everybody should everybody should have that that income insurance that comes from starting a side us will start in a business there’s a lot of great tax tax loopholes tax benefits you can get from having your own business and you know you can pay your kids some of that you know put that money into their retirement accounts and you take that off of your off of your sales or off of your income so you don’t have to pay taxes on it a great way to shield some of those some of that money on there you know also through that last 2018 tax reform that we got a lot of great benefits for business or owners in there you can actually deduct I think it’s like $20,000 off of your offer your partnership or off of your small business and not pay taxes on it you know it’s just free money it’s it’s not– not taxed as as income so so definitely i recommend everybody you know checking out some of the videos we have on channel here about side hustles about starting your own your own business some of these online strategies that I use and doing that now to Sean this question you know there are when you set up an LLC and an S Corp to to take advantage of some of these tax benefits because with an LLC and again I don’t want to go for too far that’s into the India accounting because I want to get to our our dividend funds here real quick but but you pay less taxes you you can shield some of your money from the payroll taxes that most companies have to pay but there are fees to setting up and maintaining a limited liability corporation and escort that kind of thing so normally I’ve heard you know you don’t think about it usually until you reach about a hundred thousand in in sales or income and that’s just because the the fees and the set up behind you know formally incorporating your business outweigh those tax benefits so I just you know just this last year early last year I started a you know for my own LLC because I kind of reached that high-water mark where I could start shielding more income from taxes by using that LLC rather than just having it under my name so we’ve got exams tomorrow I just saw somebody have exams tomorrow but oh okay for some reason I thought you were talking about the the the cfa exams which had just struck me I think that was yesterday so if anybody’s here just got done with the CFA exams I give me a shout-out it’s been a man it’s been a long time since I’ve thought about that but yeah so so now and again I love all the comments thank you everybody I appreciate it I appreciate that community that we have and and all the comments I get the feedback and the advice and I just want to go over a real quick you know recap of some of the last week’s videos and then a preview of the week’s videos we’ve got coming up cuz we’ve got some really really neat ones coming up I think I think that are going to help you not only on you know dividend stocks that topic that we cover here but on some passive income investments that I’m that I’m going with Wednesday and Friday so last week completely dividends week we had two dividend to dividend videos on Monday and Wednesday about kind of strategies around the payout the payout ratio and the ex-dividend date some really interesting strategies that most investors usually don’t think about usually think about dividends it’s kind of buy and hold and that but I shared some strategies with you to you know really take advantage of certain dates around dividends so that was fun Friday’s poll for all the portfolio update is there always the highlight of my month I love looking into our dividend stock challenge portfolio and seeing how that’s done compared to the market and and some of our picks in there like I said 18 percent year-to-date return against about a 10 percent year-to-date return on the S&P 500 so so happy with that it we actually you know shielded a lot of our portfolio from that may sell off in stocks by by repositioning into real estate and bonds and some other stuff next week’s videos like I said Monday tomorrow I’ve got a really interesting one to high-yield stocks ranked ok this is a very highly requested video everybody asks me you know especially with that that portfolio that we’ve got you know why I started the linen why I only look for stocks with a 3% dividend yield or higher and most of them have that 3 to 6 percent dividend yield why didn’t I just go for dividend stocks of 1215 percent some of those very high yield investments with very high yield stocks and and it’s something I’m going to talk about tomorrow and I’ve got actually I’ve got a portfolio of 5 high yield dividend stocks 6 percent dividend yields or higher and you know I’m gonna rank those I’m gonna share why I picked those and what are the risks in picking those high-yield stocks because what’s really interesting and you’ll see this in the video tomorrow what is very interesting is of those 5 dividend stocks from 6% yield all the way up to I think one is paying a 15% yield on that investment the 6% yield the the two that are right around six percent yield were actually the best performers over the last three years you know one of them is a 30 percent annualized return over the last three years so so basically doubling in the last three years but it only pays a six percent yield so definitely I you just can’t look that high-yield you can’t just look at that yield to when you’re looking for that highest total return but I’m going to talk about that tomorrow in tomorrow’s video how to find those high-yield stocks and that high total return and and kind of some of the risks to watch out for Wednesday and Friday we’re going to switch into some passive income ideas so so Wednesday I’m ranking 18 passive income ideas you know most of which I use myself on a monthly basis you know which are the most passive which is the most or the easiest to set up and make money and then some of them that it might take a little bit longer to actually make pass it to setup but they’re gonna make you thousands a month so a very very important video coming up Wednesday and then Friday we’ve got passive income investments which are going to be gonna be a fun one you know kind of a mix of investing and passive income so now I you know I want to get to these dividend funds ranked because I think this is a really interesting strategy of using these funds not only is as an exclusive part of your portfolio so just investing in funds but actually using it in a strategy that I’m going to share with you after we look at these four funds that I that I’ve picked out and talked about so you know there there are some factors that that lead to dividend outperformance okay everyone on the the channel knows I’m a huge believer in dividends because they just they just outperform the market you know you paid to invest that dividend is it always every year that dividend is going to be a positive cash return whether stock prices go up or down you’re always gonna make a positive return from those dividends and then on a total return basis dividends just outperform you know I looked at some Morningstar research just this last week kind of researching for this for this this live stream and there’s really two factors that lead to that dividend outperformance you know you’ve got typically dividends are in you know higher dividends of course are are in sectors with a lower valuation you know you’ve got utilities you guys consumer staples a lot of these sectors that you know might have a little bit slower growth than tech than biotech than a lot of those other sectors but it’s you know so so investors aren’t paying for that growth they’re paying for the actual cash flows and that kind of thing so you get valuations that are a lot lower you got that value of okay typically value stocks just outperform growth stocks okay because you know generally people jump into growth stocks they bid the price so high and then you know that growth doesn’t materialize or we get some kind of a stock market correction or a crash and and those stocks just gets slammed they just get hammered while the the value stocks tend to you know tend to tend to do a little bit better they don’t necessarily miss the miss the market crash completely but they don’t fall quite as bad as grow stocks the other side of that or the other the other factor that leads to dividend outperformance corn in this resource whistling you know more stable cash flows right and this kind of feeds into that that whole idea that we just talked about really it’s just that you know dividend stocks and high dividend stocks generally these companies have more stable cash flows of course that’s why they can offer these dividends because they know that they’re gonna have money coming in you know regularly to to grow the company and pay this dividend and of course you know that’s just rewarded by Wall Street that’s we rewarded by investors when you have a company with stable stable cash flows so you know now I want to share three factors before we get to those four funds I’m going to show you four funds rank them for high-yield funds that I think you can add to your portfolio in great pics but I want to share three factors that you want to look for when you’re trying to pick dividend funds okay everybody on the community knows I’m not just about just putting out a list of stocks to invest in or funds to investment I want to give you the tools here to do your own research to pick your own funds you know if you don’t like these funds or maybe you know in the future if you want to change funds I want to give you the tools to be able to pick these yourself so whenever you’re looking at an ETF an exchange-traded fund or any fund in which you want to invest the first thing you want to do is look at expense ratios right and and this is just how much the company is charging you each month to to invest in that fund for the portfolio demand manager to manage those assets or those stocks within that fund you know how much are they charging you and we’ve seen a massive drop in expense ratios over the past decade over the past five years you know really a race to the bottom firm you know Vanguard Charles Schwab shares all the may fun companies have really been lowering their ratios their expenses quite a bit so that’s that’s great you know but you always want to look and make sure that the expense ratio is is lower than maybe some of the ones compared to it and you always want to look just like in stocks where you compare stocks within the industry against each other you don’t compare you know a tech stock against a consumer staples stock right you compare a tech stock where the tech stock in funds you always want to compare that expense ratio in you know other alternatives within that that theme okay so if you’re looking at dividend funds you want to compare the expense ratio with in dividend funds okay you don’t you don’t compare the expense ratio in a dividend fund with one that’s in there like an active management you know leveraged fund or something of course that one that’s gonna have a higher expense ratio just because it’s more actively managed it’s you know maybe a leveraged fund something like that so you really can’t compare the two but you compare the the expense ratio you also want to look for diversification across sectors and this is hugely important one that something I think most people kind of miss when they’re looking at funds especially dividend funds is you know how much do that does that fund have in each sector maybe even each country or region wherever the fund invests in and a great example of this is the SP Y the spyder S&P 500 fund it’s that that main and really them the most popular ETF out there just because it covers shares of the SP 500 the broad market the SP why people love to invest in that and think you know I’ve got all the investor I’ve got all the the investment all the diversification I need because it holds the entire market well the problem here is that if you look into that SP Y that fund the the the SP and you look into the SP 500 index the market itself you’ll see that just like three sectors are about 50 percent of the fund you know you’ve got tech you’ve got I want to say and I should bring up the add the page but I’m not going to you’ve got teka and you’ve got like two other sectors that are about 50% of the SP 500 and their their growth stocks their their growth sectors their sectors that have grown so much over the last ten years that the market cap of those sectors is so high that they just dominate the sp500 well what happens is of course if you invest in that SP Y if you invest broadly into just the SP 500 then you know you are highly exposed to any kind of market weakness any kind of economic weakness because you’re in just these three sectors that are highly cyclical okay so when that market correction does come or the crash or what have you then that fund is going to fall quite a bit more than maybe another fund that might have a little bit more diversification in other sectors okay there’s nine sectors of the economy there’s there’s tech there’s health care consumer staples utility utilities you know industrials materials so these nine major sectors you want that diversification across those or very least you want to understand yourself as an investor whether you’re a high risk investor or maybe somebody wants a little bit lower risk and be able to be diversified you know in those sectors that that kind of align with your with your personality right if you’re a high risk investor then yeah maybe you want a lot of your money in tech in industrials and those cyclical sectors that are gonna swing back and forth pretty wildly with the economy but if you are a you know buy and hold a less risk investor risk averse investor then you know you’re going to want to have more money in those those safer sectors like utilities telecom consumer staples health care things like that so you really have to watch for this diversification in these sectors in these funds okay and the third factor is just just kind of looking at the fund itself the returns to date you know you can’t just look at hi the highest yield in these funds and I get this so much and this is actually something we’re gonna cover tomorrow in that in Monday’s a video about high-yield stocks is that so many people they just they look for the highest yield and you know one you get so many companies that you know have those those very high yields the high single digits low double-digit yields and it’s just because the dividends haven’t been haven’t been changed yet you know maybe the company’s in trouble stock prices coming down so much that that dividend yield increases okay because dividend yield is just the dividend divided by the stock price so if the stock price comes down and the dividend stays the same that yield is gonna skyrocket okay but what happens when you know when when the company looks at its cash flows during the next during the next quarter and the board says hey we can’t support this dividend they cut the dividend and you know it’s it’s just a bad news all around you know this it usually isn’t quite as bad for a fund that holds hundreds of companies together but it can be the same thing for a fun so you can’t just look at the high the highest yield fund for the stocks you want to invest in a good example is is the Oppenheimer ultra dividend fund which actually targets like the 60 highest yielding stocks from the SP 900 I think it is and it has historically underperformed the Russell 1000 index you know just by just just by blanket targeting those 60 highest yielding stocks its underperformed to the index because yeah in in those highest yielding stocks there are some problems that you need to be aware of and you need to watch for so so now we’re going to get on to those for dividend funds that that I want to talk about for funds I think that that you can you know that you can you can count on you can look to for for some of the best funds for not only high dividend yields but total return as well a very important idea that you get into that you look at Total Return the first one we’re going to look at here is the spider portfolio SP 500 high dividend ETF that’s ticker SP yd it’s got a four point one seven percent dividend yield and the expense ratio is just point zero seven percent so one of the lowest expense ratios you’ll get you’ll find and it’s a great just kind of low cost core fund right you’re looking at a broad market exposure here and at a low cost it’s return to 12 percent annualized since its inception now this one hasn’t been around for that long so that 12 percent is a little bit skewed because it didn’t have to you know it doesn’t have returns from the like the 2008 stock market crash so a little bit skewed there but you know it’s it’s it’s a good overall fund look at the holdings here it’s a very heavily it stood in real estate you know consumer consumer discretionary utilities which you know consumer discretionary is a little odd here because you wouldn’t generally think of that as as high-yield but some of these others these other larger sectors like real estate utilities financials are those high-yield sectors so fairly well well balanced it’s I you know it still does have it could used a little bit better a little bit better diversification and for that I want to look at the the vanguard of Vanguard high did high dividend index ticker vym now this one has a little bit lower dividend yield three point two six percent a little bit lower expense ratio as well not by Macchio point zero six percent expense ratio so another low-cost core fund and this one is actually a little bit better diversified that’s why you know given the to I think I might go with the Vanguard fund here because you know you do have a little bit better diversification and you see that here you know basic materials you see you know industrials eight point three percent whereas I think on the the spider fund it was it was much lower so you don’t have that overweight exposure in in some of these you know some of these some of these cyclical sectors like oil and gas I think was much higher exposure in the spider fund you know this one the Vanguard high dividend index b ym has provided fifteen point five percent over ten-year annualized returns so a little bit higher total return on that even though it’s a little bit lower dividend yield so so definitely you know look for a little bit more a little bit more diversification and in that total total return next is probably my favorite fund and anyone in the community knows this because I point this fund out constantly you’re probably tired of me talking about the Vanguard real estate ETF the V&Q three point nine six percent dividend yield 0.12 percent expense ratio so a little bit higher than those core funds but but still very low compared to a lot of other funds you’re gonna find and and not bad considering that this is a little bit more actively managed you know fun this this fund holds I want to say eighty let’s go to the the holdings here this fund holds a hundred and eighty eight REITs you know 188 real estate investment trusts so great companies for dividend yields and it’s fairly well diversified across different regions of the country different property types you know you don’t have a huge exposure to to retail real estate investment trusts are just thirteen point six percent in in in retail REITs which I like because you know they’ve had a big problem with with you know they’ve got a big problem with that ecommerce trend and a lot of these traditional retail spaces are having a hard hard go of it so it’s it’s very well diversified and you know when we’re talking about these these dividend funds you know everybody wants to go dividend stocks and dividend funds but you you have to be diversified in that real estate portion as well so so a great way to and you know add real estate exposure to your portfolio get use out of some of that risk in in dividend stocks and like you saw in yesterday’s or a Friday’s video on our portfolio update this B&Q was eighteen percent throughout the whole month of May okay so I started May with an 80 percent tone return for the year or return for the year ended May with that same eighteen percent didn’t suffer that seven percent you know sell-off that we saw in the rest of the market so a great way to a diversify your risk in your portfolio and protect the money that you’ve earned there our last dividend fund that we’re going to look at before we get to you know I’m gonna I’m going to show you a ranking or rank these four funds so I show you a graphic there and then I’m going to talk about that set that strategy that you can use with funds and stock picking to get kind of the best of both worlds and this one is the AML P this is another one that I talk constantly about it’s also in our twenty nineteen portfolio challenge because you know it’s it’s got lots of the same benefits as the real estate fund as the B&Q so the Alerian MLP ETF ticker a it’s a fund of like we talked about before a fund of those energy assets okay so so these are pipelines storage facilities things like that pays an eight point two percent dividend yield okay so one of the highest dividend yields you’ll find from a fund it has a little bit higher expense ratio of 0.85 percent expense ratio it’s a little bit more actively managed some than some of these but but it’s really hard to beat that that dividend yield and and again why I like this is you know this is going to this is going to diversify your portfolio you see here that most of these assets most of them are midstream energy assets with pipelines gathering and processing you’ve got some storage assets in there but it’s you know it’s just a different sector of the economy than a lot of these other dividend stocks so it’s going to it’s going to protect your portfolio it’s going to give you a lot of the tax break advantages that the MLPs get and and with this you get no k1 form I know so so a lot of you love you want to invest in MLPs but you’re kind of hesitant you’re kind of scared of that k1 tax form that you get every year with with an MLP investment well with the fund you don’t get that k1 form so it’s taxed just like a you know just like any other fund and and you can hold it in a in a retirement account and you know pass those taxes pass those taxes each year tax deferred each year in those retirement accounts so now looking back at the return on this it’s been tough you know you had that that huge sell-off in in energy in oil prices in 2014 that really hurt a lot of energy companies and they haven’t fully rebounded yet so you know the longer-term return on this one is skewed a little bit from that but it’s it’s a great return you know over the little bit shorter term over the last couple years and then before that big sell-off as well I actually did some research for a corporate client once comparing the the dividend yield that the yield on the 10-year Treasury and the return on the am LP or the dividend yield on the MLP and when you get what happens is if you look historically over where that dividend yield on this fund has been versus the 10-year Treasury note so 8.2% on the on the fund right now two points so seven percent two point one percent on the 10-year Treasury right now if you look historically at when the spread has been that much when there’s been that much of a difference then the forward return on this fund has just been excellent you know we’re talking 20 30 40 percent returned forward returns on this fund so you know of course past past history is no no guarantee of future results but but some very convincing evidence that that there were total returns will be there for this for this fund now I’ve got one more graphic here on you know ranking these funds kind of comparing the over the last well this is a year-to-date graph on these funds so you’ll see the the V&Q has just outperformed and a lot of that is that interest rate exposure you know obviously the real estate is very highly leveraged in debt so anytime you’ve got rates coming down interest rates coming down then then interest rate or the real estate tends to outperform right because because you know their their funding costs get lower so so there’s being q this Bangor real estate fund has done 20% year-to-date outperformed all the others outperformed the market by about double then you’ve got the looks like the a MLP is next with eleven point seven percent return year-to-date the vym so that Vanguard core kind of core broad market has done ten point seven percent and then the SP yd has come in at a flat 10% yield to year today which right around where the the market has been so far so now I want to talk about that a strategy to use both of these to get really the best of both worlds I know a lot of you want to you know pick individual stocks you want maybe a little bit higher return than the market if you can and then some people just want those those funds but I’m gonna tell you a strategy that I use that is really you know the best of both worlds is going to help you get that stress-free fund strategy it’s going to help you get those Margaret and those high dividends but it’s also going to help you juice your portfolio return just a little bit with with maybe some individual stocks and this is called the core satellite strategy okay and some of you might have heard me talk about this before and basically because it’s it’s the strategy I use the strategy I used with private wealth clients when I was working in that industry because it is so effective and effective and is such a great strategy and what happens here is with the core satellite strategy you want to put you take your whole portfolio and maybe 70% of that you know 65 to 75 percent of that of your strategy so you have a hundred thousand dollars to invest seventy five thousand you should put into these dip into these funds okay not necessarily just the dividend funds right you’ve got a diversified broad you know broad exposure into different types of funds so your bond exposure your bond funds that can go in there your stock funds your real estate funds that Vanguard real estate ETF the a MLP to get that exposure so it’s just broad market exposure in these funds and what that’s going to do is you know it’s going to give you those those dividends from that it’s going to give that market return it’s just going to be a stress free way to invest your money that buy and hold hold these great low-cost funds for for 20 or 30 years and and you’ll never have to worry about them right then what you do is you take that rest of your money or the rest of your money in your portfolio 20 25 30 percent and you invest in that group of individual stocks that you really love now we’re talking you know no more than 10 or 15 individual stocks if there’s one thing I want you to get from the channel when the investing videos on the channel is that you can’t just watch a youtube channel you can’t watch CNBC and just get a list of stocks and pick you know and invest in 30 or 40 individual stocks just from that you have to do your own analysis and you got to keep up with that analysis every re checking those stocks to make sure that you know they’ve got the competitive advantages they’re the best debride stocks that you really want to own so you know what limiting your part of your portfolio into those stocks is going to be is going to do it’s you’ve only got 20 to 25 percent so you’ve only got enough money to maybe put into 10 or 15 stocks right so that limits the number of stocks that you’re probably going to invest in anyway that’s just going to you know help help you save some time be able to only focus on those very high quality stocks that you truly believe in right but of course you know because you’re because you’re doing the end analysis you’ve got that individual like that handful of really great companies then it’s going to give you the chance to do a little bit better than the market return you get from the funds okay so so maybe you get another 4 or 5% total return on those stocks compared to what you would if you had a hundred percent in funds so just a great way to to make your portfolio make your investing strategy stress-free with with the majority of your of your portfolio but still get those extra returns so now I want to open it up to Q&A I’ve seen a lot of good comments come across and I’m going to scroll up and and try to catch a lot of those comments that came across but if I don’t get your question or if I don’t say just go ahead and ask it again in the chat there so I can uh so I can make sure that I see it again thank you everyone for joining us here and this is my favorite part of the of the livestream each week it’s just kind of you know talking back and forth with you looking at your your comments and your in the chat window here ok hello from England Wow England we got Ireland Tallahassee another one at the SP HD fairly safe and not very volatile and actually a good point that I wanted to want to bring up talking about these these dividend funds and especially the core the low-cost core funds like that spider portfolio the Vanguard high dividend yield there are going to be there are other Podesta’s good really and you could probably go into I think this SP HD is is probably another good pick very low cost very low expense ratio well diversified more or less I think I picked the the spider the the SP why D here just because it was a little bit more diversified I’d have to check that again but but yeah you know a lot of these funds are going to be very similar just basically just different investment companies offer it’ll use those three factors that I talked about you know expense ratio diversification across sector Total Return instead of just the highest yield to really pick you know between funds what else whatever variable to evaluate an etf product so so definitely you go through those those those factors you know look at the expense ratio look at the diversification because most of these you know mostly is especially dividend funds they’re going to be passively managed more or less the manager is going to have a set criteria of what he or she can can invest in as far as stocks or you know they just have to follow a pretty passive index so you know the manager isn’t gonna really have a whole lot to do they’re just they’re just following this index and these rules to invest in so a lot of these these different funds especially the dividend funds like I said be very similar across Vanguard iShares Blackrock you know so so so they’re they’re gonna be very similar don’t feel like you have to get the absolute absolute best one because you know you’re a total return difference is probably going to be maybe a percent or two over the over the long term so so and we’ve got can you please adjust stocks to buy like you did with Campbell Soup I’d like to I mean not really a not really stock picking live stream we’ve got I will do another stock pick and live stream maybe a not next week but the the next week and I’ve got some some videos coming up on how I pick stocks I’ve got one video that’s gonna be very exciting coming up on how I pick IPO stocks and whether you should invest in an IPO I had a lot of people ask for the S for the video so I put it together kind of how I looked at IPOs when I worked for venture capital firms so so private investments IPO investments working for those venture capital those early investors how I looked for stocks and I’m so I’m going to share that so so not necessarily not going to talk about how to pick individual stocks right now I want to keep it a little bit broader but I will I will definitely get to that thank you for suggestion of investing is you’re welcome dart Nita always always love to see the the people that come back you know every week for the live stream and have this conversation it’s it’s it’s really nice I really appreciate it you know if you have a hundred shares of stock with portfolio buy a thousand if I sold a weekly covered calls a fifty dollar premium how come my balance not a thousand fifty when can I withdraw that fifty well you know with you or with your with your covered call strategy so actually a great great option strategy one that I use and it really helps to protect your your risk on a lot of stuff is it’s basically selling someone else the right to buy that stock away from you and you know and they pay you a premium for doing that so what they’re talking about here is that okay if you’ve got a thousand dollars in the stock you collect fifty dollars from selling these calls to someone you know when can I win kind can I use that $50 one kind of invest it and the thing is you know a lot of a lot of these investing sites the platforms they want to account for that there’s still risk in that you know you’ve still you still got basically it’s an unlimited risk because if that stock goes yeah you know through the roof then you still got you still got to sell it for for that for that amount so that fifty dollars isn’t necessarily yours yet they want to they want to keep that in reserve so when those calls expire that’s when you’ll have that that fifty dollars you know that basically the the value of that call will you know to window all the way down to the intrinsic value by the time the stock that the call expires and you know so gradually you’ll be able to use that extra money but when you first saw the other call option and that your account shows that extra fifty dollars then you know you still got that’s still like a liability right that fifty dollar premium that’s still a liability so as that you know you have to wait till that comes down to zero or it comes down to the intrinsic value anyway of the of the call to be able to actually use that money what else I can use so just more strategy using on Morningstar not not quite sure what you what you mean there what the question is there I mean I use your mornings they really it’s kind of data research they’ve got great financial information there you know so you get all the all the company’s finances stuff like they’re not necessarily strategies that I use but just you know information that I get from home what else took a bunch of short positions on retail who’s doing good then then recovered should I sweat the dividends and and hold on okay so so that’s a good question because you know when you short a stock then you have to pay all the dividends that those that those companies pay retail has been having a tough year tough many years actually and I haven’t really looked at kind of the the ebb and the flow of the stock prices with that kind of trading idea then obviously you really need to look at to investor sentiment I know I wrote a book a couple of years ago can’t remember what it’s called but but basically it was saying and it’s very true that stock prices you know within a year are all about investor sentiment okay you know you’ve got fundamentals that exert themselves financials you know earnings growth that exerts itself over the longer term so you can find companies that have those strong fundamentals those strong financials that are going to grow find those for long term picks but you know a year to year within a year it’s all about investor sentiment what investors are paying for those earnings so so so for any trading strategy it’s all about investor sentiment you got to look at okay you know I have investors beating these stocks down enough to where any news is going to be good news and I think you know I think a lot of the retail companies have have been hurting especially bad lately so you know it might be it might be time they come up temporarily a temporary rebound I don’t think they fixed their problems so I think the the overall trend is probably going to be lower than downward especially for a lot of these department store larger department store retail companies but you know if you’re shorting if you’re you’re doing that trading strategy then and yeah you really have to make sure that you’re in and out at a good time Greg asked could you explain how expenses are taking from an ETF and how to effect NAV liquidity not a whole lot of effect on on the liquidity expense ratios expenses generally taking taken and you know I’d have to check actually it’s been so long since since I’ve actually looked into it but expense ratios are quoted on an annual basis so that point zero seven percent annual annual expense ratio is an annual basis but I think they take it out on more on like a monthly basis I’d have to check to see you know when exactly they’re taking out it might be different for eg ETF the thing is especially with a lot of these funds that we’ve talked about it and and a lot of the funds out there the expense ratio is so low that it’s really almost negligible I mean we’re talking point zero seven percent so that’s not even a percent it’s not even a tenth of a percent an expense ratio on that so you know whether it’s ten comes out monthly or whether it comes out in the entire year at once you’re probably not even going to notice a whole lot of it unless you’ve got a huge position in one fund and you just notice you know 10 20 bucks comes out all at once what’s your opinion on LMT you know I haven’t I haven’t looked at it I’ll mt4 for a couple of couple of weeks or months even but like we talked about I think in our trade war livestream I think was I don’t know if it was last week or the week before you know it’s it’s not a trade war with China it is a cold war it is a developing evolving cold war and that is going to you know that’s going to mean longer-term longer term profits sales and and support for these aerospace and defense funds you know so not only are we seeing an increase in defense spending and likely very strong long-term support for the defense spending spending but these are these other aerospace so so you know going to the moon going to Mars these these these aerospace companies are doing well as as well of course you know with the exception being Boeing because it’s got its own its own problems so you know you will you definitely want to do more more analysis in LMT itself make sure that it hasn’t gotten too far ahead of itself look at the debt look the you know the the earnings and that kind of thing but but long-term I really do like those those defense names LMT Raytheon actually just announced they’re close to a merger with the aerospace division of United tech so so that might create a pretty strong competitive advantage in that company and I think it’s gonna all be going to Raytheon’s name so Raytheon LMT some of those other defense defense names should I still be buying Keo stock even though it’s hitting 52-year 52-week highs I mean it’s hard it’s hard to justify paying some of these stock prices I will say that coca-cola is actually in a you know in a video that I’m doing that I just finished and it’ll be up it within the next few weeks that you know talking about investing in the stock as a part of a passive income dividend investing strategy because you know it’s hard to beat the sale the scale and the distribution of coca-cola they are diversified across different drinks you know not only soft drinks but juice milk pretty much everything everything you drink into your body so some great competitive advantage they’ve asked actually been going into asset light model over this last year which is why it’s been hitting that 52-week high you know they’ve been selling off franchising reef ranch eyes in a lot of their bottle bottling partnerships so you know taking those assets off the book and really becoming more efficient and higher profitability so so yeah it’s been reaching those highs but it could still be a you know good good good good investment to come and long long-term it’s you know you can’t be beat can’t be beat for dividend and and safety there what else do we have in the via ym is real estate included in the financial I think it might be I’d have to check and look at the prospectus but you know it’s it probably would be but it’s something you definitely want to check if you’re balancing it with that banker to real estate fund maybe not to get too much exposure in that what else do we have here too still hurting the Biddy banger yeah energy has been tough over the last few years but but you know sometimes the best the best times to buy not quite sure what you mean on the 2575 rule as it applies to MLP MLP funds so all the so like the so like the core satellite strategy I guess and what I mean with the core satellite strategy is you’re taking your entire portfolio with that 7525 split so so within that I mean you know you can do that by asset classes as well so you know how much you want to invest in stocks how much you want to invest in bonds and how much in real estate you know whether you include MLPs within that stock portion or have its own section you know maybe I think I have about 10% in my total net worth in MLP so maybe a little bit lower so whether you want to separate it out from stocks or not but what you can do is in these each of these asset classes have a core satellite strategy in there as well you know so within stocks within the portion of the sixty seventy percent of your money total money you have in stocks then okay seventy-five percent of that is in funds and twenty five percent is individual companies within bonds as well you can have individual bonds and funds within real estate you can have maybe real estate investment trusts or the well maybe the broader V&Q fund or or maybe an international fund I think that’s the rwo is the is the Vanguard international reach fund you can have that as your core part of your portfolio and then individual reads as the satellite so again with it with MLP funds if you have your MLP assets that you want separated from everything else then you take maybe 75% of that you put that in the a MLP and then with the other 25% maybe you pick out a few individual MLP funds that you can invest in and of course you know like we said you want to you want to separate that the a MLP the fund goes into a into a tax-free or tax deferred retirement account the individual MLPs go into a into a taxable a regular taxable account okay div yeah I haven’t looked at the div as far as the the as far as the the price action on that the thing I will say about funds it’s very hard for a fund to be a dividend trap in itself because it just holds so many companies you know individual companies like we talked about individual companies within that fund can be a dividend trap but it’s very hard for the fund itself unless you know the manager has been kind of going rogue and investing in more of these these very high high-yield investments that that might be dividend traps themselves so what happens if you hold the a MLP in a taxable account it’s just gonna be just like just text like like any other fund okay then I’d have to check see how much of the the a MLP dividends are qualified dividends if they are but but my general I think the a MLP that the dividends you received from there are pretty much the same as any other ETF so it’s going to be you know you’re gonna have qualified dividends in there the the prospectus will break it out or the the annual tax form will break it out for you but you know it’s a it’s basically just going to be your you’re gonna be paying income taxes or taxes every year on those on those dividends you receive so it definitely definitely hold that in a in a in a retirement account is there a commodities fund there is I don’t you know I haven’t I didn’t really look at a whole lot of the commodities funds I’m not big on direct investment in the commodities unless it’s with a with a professional you know commodities broker or you know a commodities account because you know commodities paint nothing and tell you until you sell them so so I’m much more interested in you know buying the miners so like maybe a miners fund the gold miners fund I want to say GDX is on is the ticker for that the GDX gold miners fund that way you at least get those dividends you know gold miners can be profitable even as you know gold the price of gold is a little bit lower they can be profitable they can be creating those earnings creating that that positive stock price appreciation even though you know even while if you were investing directly in the metals themselves you wouldn’t be making money or maybe you’d even be losing money because the price would be going down so so there’s that what else we have do you think it’s a good time to buy Cheney stocks so Muhammad s if it’s a good time to buy Chinese stocks Alibaba other China stocks is US market crash cause falling Chinese stocks too well and I think it’s a great time to buy Chinese stocks haven’t looked at Alibaba in a couple weeks but you know it’s a very strong company it’s basically the Amazon of everywhere else except America ok Amazon’s got a pretty good lock on on the US but but Alibaba is really expanding its influence outside of China and really globally so so Alibaba is generally for a longer term I think a great pick some of these other Chinese stocks as well we own the LFC so China life in our in our portfolio we own the the FX I which is a China China fund and and ok so your second question there does the US stock market crash cost falling Chinese stocks too there is going to be some some you know contagion effects is what they call them contagion being that you know if investor sentiment crashes in one country especially a country as large as the United States then then obviously that’s gonna that’s gonna affect stocks in other countries it’s not a one-for-one relationship though and that’s that’s a big reason why you want to diversify into not just American stocks American companies with Chinese sales you want to diversify into Chinese domestic companies okay so Alibaba so 10 cents so you know China life that kind of thing because that that relationship isn’t one-to-one you know China China’s economy could be growing at five six percent even if the US economy goes into a recession so so you’re still gonna have some good upside potential over there and if nothing else you know it’s gonna it’s going to smooth out your your your your your overall portfolio what else think you really didn’t understand the expense ratio with ETF so the expense ratio is so with with an ETF and exchange-traded fund just like you know the old me no funds somebody is running that a company is over managing that fund and and like I said most of them are just buying the index or buying the sp500 or buying a portion of that or they’ve got rules about which stocks they invest in but there’s still a lot of expenses that they have to pay they have to make the portfolio managers the analysts you know everybody within that company so there’s an expense ratio an expense that you pay to own those shares those shares of that fund okay so whereas if you buy shares of coca-cola you can hold those forever your they don’t cost you anything to hold on because you know you just don’t shares of coca-cola if you hold a fund there’s people that are you know people that are managing that fund incurring expenses on their side and you have to pay them to be able to to be able to own that fund so so the expense ratio is just a percentage of its basically the the assets of that fund you know but it comes down to you know per share you can look you can think of it as a per share expenses as well you know that percentage of the stock price that you have to pay okay because the stock price is related to the the asset value of that of that company so just know that it’s it’s an expense you pay that comes out of your invest in account for the the the total investment value that you have in that fund each year and and look for the lowest ones obviously okay what other questions do we have can you please share a link to your m1 PI for the investment challenge it’s kind of hard to share links while I’m doing this I will put a link in the in the video description below to the investment challenge if you want you can just go to a go to the home page for let’s talk money go to playlist and it’s the 2019 stock market challenge playlist there and then that’ll have all seven videos in that stock market challenge it shows the fund or the the portfolio how its developed I think I started with 10 stocks but now we’re up to maybe 14 so it’s like 7 stocks and some dividend or some some other funds and and that kind of thing but I will share that in the you know in the video description by div because the monthly pay dividend the dividend trap because it seems like the price continues to fall faster than dividend can make up for it yeah and that’s that’s the kind of thing with with dividends is is you really have to look at the you know the the the diversification to make sure that it’s not overly exposed to one specific sector so if the sector Falls and comes into trouble a economic trouble or cyclical trouble then then that that helps for it but but yeah you know I haven’t looked at the DI B lately so I don’t know exactly what sectors it’s in or why maybe it’s losing value faster than some of these other dividend funds you got to understand that during may you know almost all dividend funds are gonna are going to have lost value other than that Vanguard REIT that we looked at just because they’re their general market funds for the most part so we are coming on in a little over an hour for this livestream want to wrap it up a little bit again thank you so much forever everybody for being here I appreciate it I enjoy these this back and forth that we get every week for the for the live stream please you know if you if you ever have a comment or feedback or advice you know I love learning from you as well just you know ask it in the comments or put it in the comments to a video I always I read every single comment we get and and look for those look for those videos coming out this week gonna be some great videos tomorrow that high-yield investments ranked video the five the five highest yield stocks that I like one of them a thirty percent annualized return over the last three years so huge return plus that Plus that high dividend yield and then those passive income investments passive income idea videos that we got Wednesday and Friday but I will with that I will close it up and I appreciate it thank you for all bit for being here and I will see you again next week