SELLING BTI, BUYING CHIMERA

I decided to sell my stake in British American Tobacco and take the profit of 34.75%.  While I believe BTI would make a good long term holding, I also own shares of PM and MO and decided to reduce my investment in the tobacco industry. 

I'm taking the money from the sale of BTI and reinvesting it in a Chimera Investment Corp. (CIM:NYSE).  CIM is a REIT with a dividend yield of 13.83% on their recent price of $4.05.  While I am aware of the risks of investing in REIT's in a market with increasing interest rates, I'm primarily seeking extra income from the higher yield on dividends (dividend income from CIM is more than twice the yield of BTI).  With CIM being much lower in price and having great financials, I'm also looking for some upside potential here.  If I do make a decent gain on share price, I would most likely pull out my initial investment and keep the remaining shares as one of my "free stocks" for the dividend payout.  Otherwise, I'll draw the dividends, monitor it closely for any ill effects from interest rates and if the price should start to decline, I'll move the money elsewhere. 

IN WITH FOREIGN INVESTMENTS AND OUT WITH THE LIMITED PARTNERSHIPS

In a further move to reduce my exposure to limited partnerships, I put in sell orders for Calumet Specialty Products (CLMT) with a 23% gain, Markwest Energy (MWE) with a 42% gain and utility company Pinnacle West Capital Corp (PNW) for a gain of 29%. While all three have been great investments up to this point, I didn't like their prospects going forward, so decided to lock in gains and reinvest profits elsewhere.

To add more diversity to my portfolio and seek profits outside the U.S., I've decided to invest the money equally in British American Tobacco (BTI) and Unilever (UN). BTI has a ROE of 28.8% with a dividend yield of 6.70% and $3.32 per share in cash. Unilever, with leading brands like Lipton Tea and Dove soap, has a ROE of 38.70%, a dividend yield of 3.20% and $1.20 per share in cash. Both companies have very little debt.

I see several benefits to making these changes in my portfolio and am looking forward to adding BTI and UN to my long term holdings. While the U.S. seems to be leaning toward a shaky recovery, it doesn't hurt to broaden your investment perspective to include quality companies who make more of their money from global sales. I also see this as part of my move away from speculative issues towards better quality investments.