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Do You Want Fries With That? Dear Mr. Berko: My 16-year-old son has saved up over $6,000 in the past two years from part-time jobs and wants to invest this money. He has done some research on the computer, and his investment of choice is McDonald's. I also looked it up and read …Read more. Avon Lady Dear Mr. Berko: I've been using Avon's soaps, skin care lotions and fragrances almost forever, and my neighbors and I believe that the company's products are just as good or better than those of Revlon, L'Oreal and others. So I bought 200 shares in …Read more. Foreign ETFs Dear Mr. Berko: My new broker recommended Finnish, Norwegian and Swedish exchange-traded funds for me, which I have listed here. What can you tell me about investing in those countries? I know what an ETF is but hope you can explain the terms "…Read more. A Smokin' Stock Dear Mr. Berko: Several places in New York and New Jersey have increased the minimum age to buy tobacco products to 21, which is expected to sharply reduce smoking by our young people. Our 17- and 19-year-old boys smoke, and such a law here would …Read more.
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Investing Qualms

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Dear Mr. Berko: I am 78, my wife is 81, and like many investors today, we want income. So what do you think of investing in Alerian MLP, which is an Exchange Trading Fund paying 6%? I'm angry, disgusted and disappointed that the government keeps interest rates so low. I've worked all my life and so has my wife. We raised 4 children, paid for their education and managed to keep a little over $500,000 in our 45 years of working. We got hurt twice by brokers in 1987 and 1998 and are afraid of being taken advantage of once again. So we planned a worry free, non-stock market retirement, certain we could always get a minimum of 4 percent or $20,000 from this money in CDs. Now it looks like we have to go back into the market because we are coming up short every quarter and we do not want to reduce our standard of living. Each of us have good pensions and good social security checks, and we have a part-time business from home that earns us between $10,000 and $14,000 annually. So we're not hurting, but we miss that extra $15,000 to $20,000 we thought we could depend on from our CDs and the many little things it afforded us. I didn't write to complain but to tell you our circumstances and ask for your advice on Alerian. It's recommended by a broker who is a customer of our home business, and he said not to buy it from him (his firm charges too much) but to buy it from a discount broker. At least he is honest about this. Please tell us if it is OK to buy? Is it safe? Can we invest $100,000 in it? — WS in Vancouver, Wash.

Dear WS: Low interest rates are strangling the resources of most retired folks, frightening them into desperate decisions. And in the process, colonies of snake oil salesmen ooze from the woodwork like Formosan termites sucking the marrow from their tired bones. It's a war zone out there, and many trusting retirees have been savaged by hucksters, banksters and brokesters. However, Alerian MLP (AMLP-$16.30), an Exchange Traded Fund (ETF), while not the safest stock on the planet, is certainly a lot less volatile than many, and the 6 percent dividend appears dependable. And yes, you can purchase $100,000, but I think that's overload and overboard.

The share price has been moderately stable since its IPO at $15 in September of 2010, while the dividend has been flat as a pancake. Because you can afford the risk, I have no objection to a 1,000 share purchase as a long term investment. And as most readers know, I have been a big fan of dividend paying stocks for over 30 years, especially dividend stocks that grow their distributions frequently. I believe that growing dividends are infinitely more important to most investors than growing principal. And inarguably, dividend growth is much more dependable than principal growth. So one can, with a much greater degree of certainty, predict the potential dividend payout of a stock five years hence than its potential share growth. In a falling market, investors who depend upon principal growth to maintain their living standard are often hurt, and must liquidate even more principal to pay growing bills. But those who invest for dividends and dividend growth continue to receive their incomes and are much less affected. Simple common sense.

However, I'm not an AMLP aficionado. It does provide lower risk via diversification, but an informed investor could do significantly better owning some of the issues in the AMLP portfolio, earning much higher yields and excellent tax benefits. Exterran Partners (EXLP-$21) at 9 percent, Boardwalk (BWP-$26) at 8 percent, Energy Transfer (ETP-$45) at 8 percent and Regency Partners (RGP-$24) at 8 percent may be some good choices, all of which have grown their dividends frequently since inception. These companies and other MLPs I've recommended in the past own enormous assets that are subject to huge depreciation charges. This depreciation reduces the MLP's earnings but have zero effect on the MLP's cash flow. This depreciation is also passed on the shareholder, creating a significant tax advantage and in most instances, 80 percent to 90 percent of an MLP's dividends are not taxable. It does, though, reduce your cost basis on the stock. However, AMLP shareholders are unable to benefit from this advantage. So you may also consider owning a few individual MLP equities for their tax advantage as well as the higher yield and growing income.

Please address your financial questions to Malcolm Berko, P.O. Box 8303, Largo, FL 33775, or email him at mjberko@yahoo.com. To find out more about Malcolm Berko and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.

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