Considering how difficult recent months proved, I would have bet the under before tallying  the 2014 returns on our recommendations.

Investments suggested by MLP Profits for any part of last year averaged a gain of 5.0% while in our portfolios, just edging the 4.8% total return delivered by the benchmark Alerian MLP Index.

As might be expected in a generally lackluster year that went south in a hurry late, our Conservative Portfolio selections did best and Aggressive recommendations worst. Both the Conservative and Growth portfolios beat the Alerian, and by a lot in the case of the former.

Our overall performance was dragged down by the 17 new recommendations made over the final five months of the year, mostly while oil prices were crashing and MLPs performing very badly. Those picks accounted for nearly a third of the overall portfolio, and even those that dodged heavy losses ended up watering down the returns delivered by older recommendations during the first half of 2014.

On the other hand, our Best Buys lived up to their name and then some. The nine recommendations featured on the first such list we published last year, on March 12, delivered an average annual return of 27.5% for the MLP Profits portfolios. Each one produced a positive return for the year, and the 13.3% delivered by our top choice at the time, Enterprise Products Partners (NYSE: EPD), ranked eighth among the nine.  

The returns for two of the nine were aided by the halving of those positions near the highs in late June. That move paid off in another way too, because the updated  Best Buys list published on July 15 filled two of the three vacancies thereby created with Kinder Morgan (NYSE: KMI) and Energy Transfer Partners (NYSE: ETP), both overachievers in the second half of the year as the market was melting down.

NO CONTEST: Returns from July 15 through Dec. 31

Almost as gratifying as the hefty gains by our most forceful recommendations last year were the losses we helped subscribers to avoid. When Boardwalk Pipeline Partners (BYSE: BWP) plunged after cutting its distribution in February, readers who sold it on our recommendation three months earlier were unhurt. We then got back into Boardwalk when it was still on sale at 50% off in early April.

We also cautioned against buying into drilling partnerships, recommending the sale of two in March and April and two more in mid-October.

There were also misses, of course, like the decision to prematurely hunt bargains in this troubled space in early December.

But we nailed the big picture in July when we warned that “unless some of this trend-following bullishness is dissipated over time, a peak and then the unwind of the reflexive buying could some sooner than later. At that point, the conviction of the recent buyers … could be tested like it hasn’t been since 2008.”

Soon enough, it would be. But our Conservative Portfolio proved up to the challenge with an annual return of nearly 19%.

The two top gainers benefited from buyout offers, Kinder Morgan Energy Partners (NYSE: KMP) merging with sponsor Kinder Morgan in November, and Oiltanking Partners (NYSE: OILT) agreeing to merge with Enterprise Products Partners the same month.

Within the Growth Portfolio, two of the top four performers were those two Best Buys we opted to take profits in back in June. 


Energy Transfer Equity (NYSE: ETE) and UGI (NYSE: UGI) also outperformed for most of the year, as did UGI affiliate AmeriGas (NYSE: APU), ETE teammate ETP, Williams (NYSE: WMB) and Kinder Morgan.

On the other hand, the three recommendations from Nov. 17 have backfired badly so far, though we have every confidence they’ll work out over time.

While giving Boardwalk a second chance paid off for the Aggressive Portfolio, another go-around with Vanguard Natural Resources (NASDAQ: VNR) has so far backfired.

Meanwhile, Navios Maritime Partners (NYSE: NMM) has been victimized by a downturn in spot dry bulk shipping rates as China’s growth slows.

Although our riskiest picks didn’t pay off last year, we have higher hopes for 2015. In particular, the crude and fuel tanker trade we initiated last month is working great in the early going.

Variable distribution MLP CVR Refining (NYSE: CVRR) has been the biggest drag on recent portfolio performance amid shrinking crack spreads. But we’re sticking with it while adding three new Aggressive holdings. With sentiment down and yields up, controlled aggression should pay off this year.