Social Security recipient? You’re set to receive a 3.6% raise in January.

How about your dividend portfolio? Well, it depends on your positions! So let’s talk about the stocks and funds that will give us that magical COLA (cost-of-living adjustment) we love to sip versus the static divvies that can become a bit stale year after year.

We’re all about the 7% to 8% yields here at Contrarian Outlook. Generous dividends are good! But often these come with fixed paychecks that are, well, fixed.

Year after year we collect the same check. In January, we’ll have some COLA FOMO. Inflation is our hidden nemesis.… Read more

Investors are dumping top dividend growers. And they’re doing it at the worst possible time.

This is the kind of moment we contrarians live for: When investors look at short-term worries and panic—and forget the longer-term (and much rosier!) setup before them.

This is the basis of the old market adage that “Stocks climb a wall of worry.”

They do—and we’re here for it.

I’ve got two dividends for you below: one that’s taken too heavy a beating, and another that’s overlooked but just starting to get on the crowd’s radar. Its surging dividend (up 358% in the last decade) sure helps.… Read more

We’ve got a very nice buy setup in 7%-paying closed-end funds (CEFs) in front of us. Few people realize it.

It stems from the fact that, while stocks have taken a breather after booking strong gains so far this year, many CEFs are lagging more than they should be. The cause? Overdone investor fear around, you guessed it, AI.

That dour mood has set up a particularly interesting dynamic in CEFs holding US stocks:

The chart above, from my CEF Insider service, shows that these funds’ average return based on their market prices (in green) is up about 7.2% so far this year.… Read more

Getting antsy about the midterms? Wondering whether oil will ever come back down? Afraid the AI bubble is going to pop, blowing a dotcom-sized hole into your retirement portfolio?

I’m not. Because I’ve found the best cure for headline risk is a fat income check—preferably one that arrives every month.

The headline risks I mentioned are really starting to eat away at investors big and small. The VIX volatility index just spiked to multimonth highs. Hedge funds have been unloading their tech holdings at the fastest rate in a decade. Even though the major indices are just a percent or two off their highs, breadth has been terrible and small caps are actually in a correction.… Read more

There are hundreds of closed-end funds (CEFs) out there, and almost all of them have an investor they’re perfect for.

I say “almost” because there are a few that are, in my view, not appropriate for any investor. These CEFs are highly speculative and, for the most part, don’t provide a dividend. That flies in the face of a key reason to own CEFs in the first place: high payouts! These funds typically yield around 8%.

We also generally want to be wary of new CEFs with little performance history. When you combine that with a lack of payout focus, you can find yourself taking on some very significant risk.… Read more

The nervous types are being chased out of Bondland. Fear! Higher rates forever!

Well, no, not likely. Bonds have a “killer feature” for income investors. When their prices drop, their yields rise. We can then snag better deals and secure more dividends for our dollar. That is, if we have the smarts and guts to buy low.

Not everyone does, by the way! Few vanilla investors are taking advantage of the bond bargains right now. They are applying a different approach—panicking.

This is reflected in the MOVE index, which is the VIX (stock market volatility index) equivalent for bonds.… Read more

We love it when a stock “pays us back” in dividends. The faster, the better!

Most people don’t get this luxury. They’re stuck “grinding it out” with the S&P 500’s 1% payers.

Not us. We’re hunting for dividends big enough to let us retire on our payouts alone. We’re talking 7%, 8% and larger divvies.

Two high-payers leap to mind here—and not only because of their rich payouts: the JPMorgan Equity Premium Income ETF (JEPI) and the Global X S&P 500 Covered Call ETF (XYLD).

We like both because they let us create a “synthetic” yield on our paltry S&P 500 dividends: 7.2% from JEPI, and 8.5% for XYLD.… Read more

The market has served us up a tidy opportunity on a closed-end fund (CEF) yielding an eye-popping 13.1%.

What’s more, this fund is oversold, at a 12.1% discount to net asset value (NAV).

Before I name this CEF, let me explain why this opportunity is in front of us. And since the fund in question holds corporate bonds, we need to start with interest rates.

It’s not news that since the end of the pandemic, the Federal Reserve has focused on fighting inflation. Whether or not it’s brought enough firepower to that fight is something we can debate, but the end result is that borrowing costs have been going up.… Read more

For a while, utilities were that sneaky play on AI. A picks-and-shovels provider, if you will.

Here’s why: AI usage is booming. What does AI use? It uses energy. AI is a notable energy hog, so the local utility company was the sneaky early beneficiary. Power prices would go up with more demand from that new data center down the street, and it was another customer for this utility’s captive audience.

Now things have changed a bit. Everyone publicly hates data centers:

Source: Economist/YouGov

What does it mean when poll numbers like this happen? It means everyone who’s left to sell utilities has already sold.… Read more

Let’s break down this cloud of pessimism hanging over the economy. As far as I can tell, it’s mainly coming from two sources:

1. The bond market.
2. The labor market.

Concerns around both are overblown, and that’s been a plus for us at my CEF Insider service. It’s pushed out the discounts to net asset value (NAV) on these funds, setting up some nice buying opportunities over the last few months.

It’s increased the dividend yields on some of these funds, too. In some cases near double digits.

General American Investors (GAM), one of the more popular equity CEFs, tells the tale here.… Read more