At times, MLPs have been revered as a holy grail of investment products for the general belief that they benefit from the energy market without being vulnerable to price swings in the energy market. That’s true except for the times that it isn’t which is to say any market segment can do the unexpected at any time and it is important remember that both in terms of position sizing as well as not succumbing to emotion when a segment, like MLPs, hits a rough patch.
From the post;
We often see articles published in numerous places suggesting very large weightings to various income vehicles including MLPs and BDCs. Someone who put 15% in each increased their chances of being put in a position where they panic sell. It is much easier to be rational now after the worst of it (or maybe now is just a respite) than during the heat of the decline.
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A panoramic shot of Bernabeu Stadium, home of the Real Madrid Futbol Club.