Are MLP stocks worth the headache.?

hi, Dan

there is a lot of hype surrounding master limited partnerships. stocks like EPD have a great yeild and, according to many they have great balanced sheets along with sound leadership. unfortunetly, there are tax implications. whats your thoughts on this and should they be avoided?

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Asked on January 3, 2025 8:17 am

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I wouldn't say they should be outright "avoided", however you need to understand as to whether or not these investments fit within your overall objectives and risk tolerance. For someone who is still in the accumulation stage of their portfolios and still working, I'm not really sure of the benefit overall as these funds are primarily structured to provide tax-advantaged distributions.

Typically (but not always) MLP distributions are mostly tax-deferred. They reduce the cost basis of your investment and are taxed only when you sell.

For someone looking to maximize total returns in a portfolio and not prioritize income, I don't see much added value. They simply increase complexity.

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Posted by Dan Kent

Answered on January 6, 2025 8:34 am

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