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Leigh Baldwin & Co.

112 Albany Street, Cazenovia, NY 13035 | Phone: (315) 655-2964 Toll Free: 1-800-659-8044

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Stock of the Week

Franklin Income Fund

June 5th 2016

June 3rd 2016
Franklin Income Fund
Ticker Symbol: FKINX
Industry: Income Mutual Fund
Price as of 6/2: 2.16

 

We are changing it up this week and doing a mutual fund instead of a specific stock. The market has seen recent positive momentum slow down over the past five days. On a bright note, utilities continue to go higher this year, even as the market seems to be unable to break out to historic highs, last seen over a year ago.  Last year the S&P 500 was positive, but only by a little bit, and the gain was driven by the "FANG" stocks (Facebook, Amazon, Netflix, and Google) which contributed about all of the gain. You take out two of those companies and the S&P would have been negative for last year. The Feds just released their beige book which covers current economic conditions throughout the country. The book is released only 8 times a year and the most recent release was on Wednesday the 1st. They mentioned that most districts saw "tight labor markets" and growth was described as modest, which seems to be the theme of the book.  With the uncertainty of the market,  we are featuring a reliable investment idea with an almost 70 year track record.

 

Franklin Templeton Income Fund (FKINX) has had 68 continuous years of dividends. The fund has a main goal of income with a secondary goal of capital appreciation. The fund has recorded positive returns 81% of the time since its inception date in 1948.  The fund's combination of high yields with value and blue chip stocks has been its attraction over all of these years. For example, General Electric (GE) and Chevron (CVX) are held within the fund, two stocks that offer strong dividend yields with the opportunity for growth. With the current 10-year T-bond yield at 1.78%, and the Franklin Templeton Income Fund yielding of 5.56% (at NAV), we feel this fund is worth a look at current prices.  While past performance is not indicative of future success, the power of compounding is illustrated by the fact that $10,000 invested into the fund when the fund was created in 1948, today would be worth $7,056,546 today.