Typically we’re almost exclusively interested in yield in the Conservative Portfolio of Global Income Edge, but when a stock jumps in price significantly, particularly when that pushes down the yield, it can be time to sell.

Of course, we always evaluate a company’s cash generating ability, and model its future dividend growth to figure out whether the firm is overvalued or undervalued. We also employ an analysis of the firm’s earnings using a DuPont hybrid model, which evaluates return on equity.

As someone that has followed income investments for years, I can tell you that the ups and downs in the last 12 to 16 months have been unusual. One of the surprises: Many income investments that you wouldn’t expect would do more than pay a steady dividend have had double-digit stock price growth. And the volatility has also caused some big losses in companies thought to be steady performers.

We’ve had stark examples of both cases recently in our picks: A big rise in Duke’s Brazilian venture, and a big drop in an oil drilling company. We like to be buy-and-hold investors, but we took profits in the former and cut our losses in the latter.

And that takes us to the reason we didn’t sell one of our other high performers, French telecom Orange (NYSE: ORAN), which gained 20% in the Aggressive Portfolio. While I wouldn’t dissuade investors from taking some profits now, the recent upsurge in European telecom stock prices is as a result of what many predict in 2015 will be a massive consolidation, which could make these firms much more valuable, and better income investments.

In sum, while our goal is to deliver global investments that pay steady dividends and can be held for years, when that unique opportunity arises or there is a change in the long-term prospects in a company or industry, we won’t hesitate to pull the trigger.

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Portfolio Update

I wanted to provide a review of our last three sell recommendations, and also give the heads up to subscribers that we will be identifying new investment opportunities in early 2015.

In early December, Global Income Edge removed all of its oil and gas holdings to further reduce risk in both the Conservative and Aggressive portfolios caused by the recent volatility in oil prices. I don’t think it’s prudent now to depend on the oil and gas industry for income.

In our Conservative Portfolio, we sold Kinder Morgan (NYSE: KMI) which had a solid gain of about 6% since we put it in our portfolio. And we sold Seadrill (NYSE: SDRL), which lost a little more than half its value, in the Aggressive Portfolio as the company suspended its dividend in reaction to the fall in oil prices and increased weakness in the oil platform market.

The bright stars of 2014 in the Conservative and Aggressive Portfolios were Duke’s Brazilian utility (DEIPY) and French telecom Orange (NYSE: ORAN), respectively, which each appreciated more than 20%.

Duke Energy International Geracao Paranapanema stock skyrocketed 54.5% on Dec. 11, closing at $33.17.This represented a gain of 20.62% on the holding since we put it in the portfolio in August, and it’s been a hard-won gain. We issued a sell alert on that day.

The stock was down by that much in October as a result of the sell-off in reaction to the Brazilian presidential election, where the winner’s policies are clearly not business friendly.

Further, Brazil has been suffering a drought over the last few years, which has been a concern for its majority shareholder, Duke Energy. Duke Energy had put the company under a “strategic review.”

The stock’s increase could be because of a recent forecast that the outlook for rainfall looks favorable in the short term. An official of the electric grid operator ONS said on Dec. 4 that Brazilian rainfall may exceed the monthly average in December, alleviating a drought that has curtailed hydroelectric supplies and had been hurting DEIPY’s earnings, according to a Bloomberg news report.

This is clearly good news for DEIPY. But for investors there is still too much uncertainty on too many fronts: Rainfall, Duke Energy’s intentions and the political situation.

Meanwhile, we still think French telecom Orange has great prospects in Europe as many predict there will be a significant consolidation among telecoms there in 2015. Orange is a Buy up to $19.