I know it goes without saying that we’ve all loved watching our dividend stocks skyrocket this year. But October—as always, it seems—has amped-up the volatility.

The end of the year looks choppy, with a widening war in the Middle East and a contentious (to say the least!) election on tap here at home.

That makes now the time to sell any flawed dividends you may hold “on the rip.” We’ll break down one of these losers below. It’s the kind of stock that’s gone nowhere for so long that you may even have forgotten you own it!

But we’re not just going into a defensive crouch here, because despite the market run-up, there are still some cheap dividend growers on the board.… Read more

When I show you a chart like the one below, your first thought might be that we’re looking at, say, the recent stock performance of NVIDIA (NVDA)—or maybe a biopharma firm that just dropped a breakthrough treatment:

Not a Tech Stock—Just a “Boring” Index Fund

But you’d be wrong. What we’re looking at here is the iShares MSCI China ETF (MCHI), an index fund tracking the Chinese stock market, up to its peak early last week.

That jump is the direct result of the Chinese Communist Party’s recently announced stimulus package.

The gains have attracted the attention of Chinese day traders and speculators, as well as those in the West.… Read more

“Buy bonds!” – Contrarian Outlook, 2H 2022

Two years later, the herd finally hopped on our fixed-income bandwagon…

“Buy bonds!” – Wall Street, 2H 2024

Yes, it is satisfying to be right. But it also makes me nervous that mainstream (“vanilla”) investors now agree with us.

If you bought with us, you are sitting pretty. On the other hand, if you are trying to put new money to work today, this is a challenging time. I don’t like buying high and I especially avoid purchasing popular names.

Case in point, my favorite PIMCO products in the closed-end fund (CEF) space.… Read more

Normally when interest rates fall, we closed-end fund (CEF) investors are tempted to pick up a fund like the 7.3%-paying Royce Small-Cap Trust (RVT).

It seems like a particularly savvy move today, with this small cap–focused CEF trading at a 10.3% discount to net asset value (NAV, or the value of its underlying portfolio). Cheap!

But is that really a good value, or could RVT get cheaper still?

Let’s take a look, starting with small caps generally. Like large caps, they benefit as lower rates boost consumer spending. But there are two other factors that make falling-rate periods particularly advantageous for smaller firms:

1. They mean lower borrowing costs for investors, allowing them to invest on margin more than they would otherwise.

If you’re reading this, I assume you are already bullish on oil. Or at least intrigued by the upside possibility. And why not? There are three reasons crude may continue to crescendo.

First, we have the Middle East situation… ‘nuff said.

Second, it is increasingly looking like the Federal Reserve is cutting rates sans the usual impending recession. Rather than a hard or soft landing, it looks like we will see “no landing” at all in which the economy continues to grow.

We contrarians called this no-landing scenario five weeks ago. Since then, it has gained traction on Wall Street as employment numbers have stayed strong.… Read more

Another day, another sign the economy is heading straight for that “no-landing” scenario I’ve been talking about for weeks now …

… and yet another sign the two dividends we’re going to discuss today are better buys than they’ve been in months.

(One of these staunch payers kicks out a rich 8% divvie. The other has grown its dividend a ridiculous 425% in the last five years. A buy back then would be kicking out a sweet 6.2% dividend today, thanks to that breakneck growth!)

Inside the Economy’s “Touch and Go” Landing

When you hear “no landing,” your first impression might be that it sounds like a good thing, right?… Read more

Having a diversified portfolio is pretty much Investing 101, right?

I mean, it’s one of the first things we all learn as investors. But there’s a problem here: Going for balance in “regular” stocks, bonds or ETFs can mean leaving income on the table.

To see what I’m getting at here, check out the average yields on two ETFs many people buy for stock and bond exposure. For stocks, I likely don’t have to tell you about the SPDR S&P 500 ETF Trust (SPY). It’s the popular S&P 500 tracker. And it yields a microscopic 1.2%.

There are plenty of options on the bond side, but let’s go with a fairly high-yielding ETF, the SPDR Bloomberg High-Yield Bond ETF (JNK).… Read more

Let’s talk about companies that are serious about dividend hikes. I’m talking about recent payout raises of 25%, 67% and even 120%.

Know what happens to a stock that raises its dividend like this? Its shares skyrocket.

Consider Graco (GGG), a company that specializes in fluid-handling systems, serving everyone from homeowners and contractors to industrial and manufacturing businesses. Graco.com delivers one of the most beautifully boring boasts we’ll ever read, showing us the many mundane ways GGG has become a fixture in our lives:

“We pump peanut butter into your jar, and the oil in your car. We glue the soles of your shoes, the glass in your windows and pump the ink onto your bills.

Here’s an idea that might sound just a little bit odd at first: You can actually get retirement-investing advice that’s too conservative.

That may not sound like a bad thing, right? After all, who doesn’t want to be extra sure they have enough to clock out?

The problem with this, however, is that being overly conservative has the very real consequence of keeping us in the workforce much longer than we need to be.

I bring this up because I was thinking of the “4% rule”—which points to 4% as the amount of your portfolio you can safely withdraw in retirement—the other day.… Read more

Now that Federal Reserve Chairman Jay Powell has pivoted towards his “other mandate,” we should take a cue from my six-year-old, who yells from the back seat:

“FedEx!”

For years she has been enamored with the FedEx Corp (FDX) logo. Neither her sister nor her parents are sure why, but the affinity is real. See a truck on the road, yell “FedEx!” loudly to score the point.

I didn’t have the heart to tell her that FedEx disappointed investors with a sanguine outlook a couple of weeks ago. The stock corrected lower, as usually does after earnings.

(Seriously, the best time to buy FedEx lately has been right after the company talks to Wall Street and the suits sell their shares.… Read more