Canadian Oil Trust article from Carla Pasternak

This is a very interesting article from the Carla Pasternaks High Yeild International newsletter. Usually she charges for these articles, so thanks Carla for giving this one away for free.

 
 
 
 
One of the trust she mentions used to be in the Daily Income for Life Portfolio. I sold out with a healthy capital gain profit when they cut their dividend. Carla remarks:

"For example, Advantage Oil & Gas (NYSE: AAV) converted to a "growth-oriented corporation" in July 2009 and paid its last monthly distribution of $0.04 per unit in March, down from $0.08 per unit the month before. Going forward, management said it "does not anticipate paying dividends in the immediate future." Instead, it will use the cash flow to reduce debt and focus on developing its natural gas assets. "


Another trust Harvest Energy, was taken over by Korean company. That one made around 25% profit.
The point here is that high income opportunities don't always last forever. If you can make more in short term profit than you are likely to make in the next 2-3 years from dividend income, then take the profit and reinvest it somewhere else.