We’re living in highly politicized times, so let’s get this out of the way: I have no interest in my professional capacity in getting you to like or dislike President-elect Donald Trump, or in fact to support any particular political position.

My only purpose here is helping you make money by analyzing the energy sector and MLPs. But right now that means analyzing the likely extent of the policy sea change triggered by Trump’s election, and of course my conclusions — and the priors on which they’re based — may be different from yours. In fact, I hope so. Because if we’re all making the same assumptions and reaching the same conclusions they’re that much  less likely to pay off in a market that tends to punish consensus opinions.

I happen to believe the market is wildly overestimating the long-term effect of the Trump presidency on the domestic economy and its various sectors, while underestimating the risk of a geopolitical shock like military action in the Persian Gulf.

That’s hardly surprising given the news flow right now. It’s all about the Trump policy agenda, with none of the inevitable delays and unintended consequences that are sure to crop up. Meanwhile, Trump’s stated intent to confront Iran and tear up the multinational nuclear accord it negotiated with the Obama Administration is getting relatively little ink.

Investors are tend to overestimate the effect of politics on their investment performance; in the long run and with a few notable exceptions, the swings in fortunes of the parties and their candidates hardly matter.

But Trump is no ordinary politician and the Republican majority in Congress is likely to prove much more accommodating than it did with Obama. So it’s important to distinguish between the realistic and even likely policy changes and merely overheated campaign rhetoric.

That’s just what I tried to do this month in my analysis of the president-elect’s energy agenda. Please see In Focus.

The MLP sector as a whole received a relatively modest boost from Trump’s election victory and, more recently, somewhat firmer energy prices. And that means there are still plenty of solid yields on sale. We’re adding one that’s almost up to 8%, from a distribution set to rise 12-15% next year. Please see New Buys.

This month’s Portfolio Update focuses on the big intramural merger just announced by the Energy Transfer family, which like recent precedents in this space really amounts to a distribution cut. Investors haven’t greeted this one as nonchalantly as they have several comparable maneuvers. I’ll chalk that up to rising expectations. My confidence in the value of our top pick Energy Transfer Equity (NYSE: ETE) remains unshaken by this action or by its big rebound since the election. And its Sunoco Logistics (NYSE: SXL) affiliate is likely to bounce back before long from the 10% decline it’s suffered in the last two days on the merger news.

MLP preferred stocks don’t garner much attention, which is probably a good thing considering how many issuers from the upstream and maritime sectors have gone bust or suspended payments. But I dug into the two public preferred offerings from prominent midstream operators and found one an attractive proposition and the other one egregiously overpriced. Please see Sector Spotlight.

Now that the market has taken several months to digest the springtime midstream gains, and with broad equity indexes at record highs, I expect a strong finish to the year. Low energy prices remain a big drag on sector fundamentals, but if and when they finally lift we could make up some lost ground in a hurry.  

Portfolio Update

• Tesoro Logistics (NYSE: TLLP) added to Growth Portfolio; buy below $55

• Sunoco Logistics (NYSE: SXL) buy limit lowered to $28 in Growth Portfolio