The Path to Cash for Income Investors

While on vacation recently I had a chance to spend time with an old friend, Jeff Rollert, a managing director of ALM Advisors, a firm dedicated to providing what they call sustainable income. Rollert is fond of saying that if it produces cash, he is interested in it. Over the years, I have had many informative discussions with him about income markets and he has a great grasp of the finer points of income investing and a unique perspective that finds value in unlikely places.

One of my obvious questions was where to invest now. Rollert pointed out that many of the traditional sources of income have been bid up as yield-chasing investors have flocked into the market. He expressed real concerns about the high-yield market because of exchange-traded fund distortions. Given that the two largest ETFs for high yield bonds, SPDR Barclays High Yield Bond Fund (JNK) and iShares iBoxx $ High Yield Corporate Bond Fund (HYG), between them control something like $27 billion of junk bonds, there is a real danger if investors begin to liquidate. Should investor selling reduce the share count of these large funds, billions of dollars' worth of bonds could be dumped on the market in a short time. He pointed out that the high-yield market is exhibiting classic signs of a top, with covenant lite bonds being the order of the day and inexperienced buyers flooding the market....523 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

Read the full story and get access to the Real Money Pro trading floor.

There’s no substitute for a trading floor to get great ideas, so Jim Cramer created a better one at Real Money and blogs there exclusively. We then added legendary hedge fund manager, Doug Kass, with his exclusive Daily Diary and best investing ideas. Staffed with more than 4 dozen investing pros, money managers, journalists and analysts, Real Money Pro gives you a flood of opinions, analysis and actionable trading advice found nowhere else, and allows you to interact directly with each expert.

Already a Subscriber? Please login.

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.