Weekly Market Summary: Stocks Approach Overbought Levels as U.S. Government Shutdown Averted

David Peltier, Senior Investment Analyst
Updated: February 16, 2019

Investors celebrated a compromise in Washington D.C. that allowed the U.S. government to avoid another shutdown ahead of a long weekend. As a reminder, the U.S. markets will be closed next Monday, for the President’s Day holiday.

This week, traders also took solace that trade talks with China appeared to improve. President Trump discussed delaying an upcoming decision on March 1 to increase tariffs and China’s own January trade data showed a surprise 9.1% increase of exports.

Earnings Guidance Trending Lower

On the earnings front, Coca-Cola (KO) turned flat and lost 8% a day after cutting its annual profit outlook. According to Bespoke Investment Group, the beverage producer’s lower guidance is part of a larger trend.… Read more

Rally Got You Nervous? 3 Mutual Funds Paying Up to 8.6%

Brett Owens, Chief Investment Strategist
Updated: February 15, 2019

If you’re worried that stocks are expensive again, well, they are. The current bull market is making a run at history. But it’s also costly to stay in cash (and lock in zero income). Fortunately, it’s possible to buy some downside protection with yield.

I understand the “I’m worried so I’m sitting in cash” concern. And I know many investors who continue to sit on their money and hope for a big pullback. But wouldn’t it be nicer to bank 32% total returns with 8%, 9% or even 10% or more of it coming as dividends?

Our Contrarian Income Report subscribers who smartly stayed with Omega Healthcare Investors (OHI) – a big paying REIT – have done much better than their scared cash hoarder friends, as well as the broader market in general.… Read more

These 3 Funds Are Headed for a Crash. Do You Own Them?

Michael Foster, Investment Strategist
Updated: February 14, 2019

The 2019 rebound has done a lot to revive most people’s portfolios. But there’s a new trap you need to dodge as the market ticks up: the risk you’ll stumble into an overbought stock (or fund).

But don’t take that to mean stocks are pricey—far from it! The S&P 500 is barely up from the start of 2018 and still far from its all-time highs, which is ridiculous when you consider last year’s near-20% earnings growth.

So it’s pretty easy to see that stocks are still ripe for buying.

But there is one sector I am worried about—and it brings me to the first of 3 closed-end funds (CEFs) I want to warn you about today.… Read more

Should We Sell This 5.6% Payer or Let a 105% Winner Run?

Brett Owens, Chief Investment Strategist
Updated: February 13, 2019

“Hey Brett – is it time for us to sell MPW?”

Nothing makes subscribers more anxious to bank gains like a 105% winner! That’s what Medical Properties Trust (MPW) has delivered to us since we bought it in November 2015. Funny thing is, I’ve been getting questions about selling the stock since it was a mere double-digit gain for us. It’s a good thing we let this winner run!

Why We Let Our Winners Run

It’s especially important to let winners run when they are growing their dividend consistently. There’s rarely any reason to actually sell a stock if the company is consistently growing its profits and dishing them to shareholders.… Read more

My Personal 5-Step Plan for 6%+ Dividends in REITs

Brett Owens, Chief Investment Strategist
Updated: February 12, 2019

If you’re hunting for income, your job just got a lot tougher, and it’s all the Federal Reserve’s fault! Fed Chair Jerome Powell’s recent cave-in on rate hikes means the central bank is out of action for the rest of 2019—and its next move could even be a cut.

Sure, this has been great for stock prices, which surged 8% since the new year. But it’s crushed dividend yields, leaving you with far fewer buys to get the 6%+ yields you need to retire on dividends alone.

Look at how this past month’s price gain has compressed the average S&P 500 stock’s yield from a pathetic 2.1% to a very pathetic 1.9%!… Read more

1 Click for 35% Gains and 7.2% Dividends in 2019

Michael Foster, Investment Strategist
Updated: February 13, 2019

If you’re like most people, you’re wondering one thing right now: can stocks keep soaring following December’s nosedive—even after spiking 8% in January?

The answer? Absolutely.

To get at why I’m so sure, we’ll first go a couple steps further than headline-driven “first-level” investors do. Then I’ll give you a way you could double (or more) your rebound gains thanks to a terrific closed-end fund (CEF) yielding 7.2%—and “spring loaded” for 35% returns this year.

The Ignored Connection Between Jobs and Stocks

To get at what’s in store for the markets in 2019, we have to go back to 2009 and zero in on one thing: jobs.… Read more

Weekly Market Summary: U.S. Dollar Rallies, As Foreign Growth Outlook Becomes Murky

David Peltier, Senior Investment Analyst
Updated: February 9, 2019

Macro headlines drove the trading action this week. On Wednesday, the Bank of England lowered its 2019 growth forecast to 1.2%, which would represent the worst performance in a decade. The European Commission also cut its target for 2019 growth in the Eurozone on Thursday, to 1.3%.

Elsewhere, reports circulated this week that President Trump would meet with North Korea’s Kim Jong Un later this month. However, volatile trade talks with China took a turn for the worse and Trump said on Thursday he will not speak with President Xi before a looming deadline on March 1, for increased tariffs on Chinese imports.… Read more

This 14.2% Yield is Too Good to Be True (But This 9.5% Payout Isn’t!)

Brett Owens, Chief Investment Strategist
Updated: February 8, 2019

Most dividend investors understandably love the idea of an 8% No Withdrawal Portfolio. It’s a simple yet “game changing” idea that you don’t hear much from mainstream pundits and advisors.

Find stocks that pay safe 7%, 8% or more and you can retire comfortably, living off dividend checks while your initial capital stays intact (or even appreciates).

Now this strategy is a bit more complicated than simply finding 8% yields and buying them. Granted the recent stock market pullback has benefited investors like us because we can snag more dividends for our dollar. Yields are higher overall, and that’s a good thing.… Read more

Quiet Shift Reveals Huge 8.8% Cash Payout (and big gains too)

Michael Foster, Investment Strategist
Updated: February 7, 2019

It happened so quietly, you may not have even noticed. But the script has flipped on interest rates—and today I’m going to give you my favorite way to profit. (hint: this buy pays an 8.8% dividend—enough to hand you $8,800 a year in cash on every $100k invested—and is poised for quick 10% price upside, too!).

Let’s start at the beginning.

A Low-Key 180

I’m sure I don’t have to tell you that the big story of the last three years has been the Fed’s aggressive rate hikes. But the big story of the next three years will likely be a lack of aggressive rate hikes.… Read more

You’ll Never Guess: These 6%+ Yields Could Return 20%, Fast

Brett Owens, Chief Investment Strategist
Updated: February 6, 2019

The last time we had this Fed setup, these safe 6%+ paying bonds jumped 20% in the year ahead!

The setup? The likelihood that short-term interest rates (as set by the Federal Reserve) will go nowhere over the next 12 months. To see this we’ll turn to the Fed funds futures, which are contracts that reflect real money being bet on the Fed’s upcoming action (or lack thereof). Collectively they comprise the smartest crystal ball available this side of Jay Powell.

Right now, the smart money is giving “no hike” a 75% probability between now and January 2020. And when we add in the bets on a rate cut or two, we’re looking at a 92% chance that rates will either be unchanged or lower this time next year:

Smart Money Bets 75% “No Hike” for 12 Months

This is bullish for – you’ll never guess – floating rate bond funds.… Read more