Also, if you've bought MLPs, selling them can trigger hefty taxes, which we'll discuss further.
Since last year, there have been additional shale-gas discoveries in the United States, in particular the Utica basin, according to the Penn State Marcellus Center for Outreach and Research. Shale gas as a share of the U.S. total natural gas has increased from 2 percent in 2000 to 16 percent in 2009, says a new study by the consulting firm McKinsey & Co. Natural gas prices domestically have fallen to under $4 per thousand cubic feet in 2011 from $8 in 2008, according to the International Energy Agency's recent report "Are we entering a golden age of gas?"
MLPs are concentrated in natural-resource industries such as oil, natural gas, and minerals extraction, and they are attractive to yield hunters for their usually robust quarterly dividend payouts. Industry benchmark Alerian MLP Index continued its climb last year. The composite of 50 energy Master Limited Partnerships rose more than 7 percent in 2011, and its dividend yield was higher than that of the S&P 500.
Despite MLPs' underlying run-up in price, fund managers such as Dave DeWitt of DeWitt Capital Management in Wayne is holding on. He argues that energy-pipeline companies are only going to continue increasing payments to shareholders.
"We feel that despite the alarm that prices have come up so much in MLPs, the fees they're going to be paid are going to accelerate over the next four to five years." He owns roughly 35 MLPs, and "we don't care about the price of oil or natural gas - we are owning the toll takers," or the midstream operators that maintain pipelines transporting energy, storing, processing, or "doing anything between the drill site and the consumer."
