Author Archive: Brett Owens

Half of individual investors think the stock market will be lower six months from now. That’s a level of bearishness that intrigues contrarians like us!

The weekly AAII Sentiment Survey reports 49.8% bears. The historical average is just 31%:

Most investors, at any given time, think the stock market is heading higher. And at any given time, they are likely to be right! We all know that over long time periods the path for the market is up.

However, it does so in fits and starts. Bull markets stroll the stairs on the way up but bear moves take the elevator lower.… Read more

Fear is up, markets are down—and we contrarians know that times like these are when we go shopping.

Yes, stocks are wobbling. And yes, those hoped-for rate cuts have dried up. Even one may be a stretch this year. But as worrisome as the situation in the Middle East is, as investors, we need to look beyond it.

Truth is, in the long run, AI will cap wage growth (it already is). That will take a bite out of inflation, and rates, while boosting profits—and our dividends along with them.

Fading Short-Term Fears

At times like this, we come back to our “Dividend Magnet” plays: Stocks growing payouts fast—and pulling up their share prices as they do.… Read more

Oil is up, and everything else is down. Stocks. Bonds. Even gold, the traditional safe haven!

Real estate stocks are on sale as well. Which means we contrarians need to go shopping. Today we’ll look at four real estate investment trusts (REITs) yielding between 6% and 15%.

Right before the conflict started, I mentioned that we were looking at an attractive setup for price appreciation in REITworld.

As the Fed cuts rates, the dividends that REITs pay become increasingly attractive to income investors. Money markets don’t pay 5% any longer. Neither do many bond funds. But REITs pay … 

 

And rates are likely to continue lower due to the rollout of AI across the economy.

“Two Pacificos, please?” I asked the bartender.

(When in doubt, hit the lager button. The other option was Lagunitas IPA, a 6%+ refreshment. A bit heavy for our school fundraiser.)

I handed the second Pacifico to my buddy—responsible dad rule two, keep school event double fisting to a minimum—who kindly came to support the cause. I asked my friend how his Saturday was. Interior design work, he explained.

“Tell me more,” I fished…knowing that he was most definitely not an interior designer.

He’d taken a picture of his new house, uploaded it to AI, and asked for a new layout.… Read more

Even Jay Powell seemed lost.

“The thing I want to emphasize is that nobody knows,” the beleaguered Fed chair sighed at last week’s presser, when asked about the effects of the latest flare-up in the Middle East.

It’s easy to see why. The poor man is in a jam not of his making. Futures markets see fewer and fewer rate cuts on the horizon. And more forecasts see a bounce in inflation—maybe even stagflation.

To be sure, no one at the Fed (or anywhere else) had $100 oil on their bingo card in January!

The mainstream crowd, of course, is just as shocked as the experts at that development.… Read more

Healthcare stocks are selling off with the turbulence in the Middle East.

But, why? The best plays here are geopolitical-proof. They print money regardless of what’s going on in the world.

So this is a good time to check in on healthcare. In a moment we’ll review five dividends between 6.0% and, get this, 14.1%!

First, though, let’s unpack the reasons for the recent pullback. Back in August, I flagged how Medicaid cuts, health research funding, pharmaceutical tariffs and a cocktail of other headwinds had kept the sector pinned down for months. However these resilient companies have a habit of getting back up—and sure enough, healthcare went on a new tear, returning about 25% through late February.… Read more

Be careful how you buy your bonds. The most popular tickers have four “fatal flaws” that’ll doom you to underperformance at best, or at worst leave you hanging in the event of a market meltdown!

Let’s pick on the widely followed and owned iShares iBoxx High Yield Corporate Bond ETF (HYG) as an example. It has attracted over $15 billion in assets because:

1. It’s convenient and as easy to buy as a stock.
2. It’s diversified (for better or worse, as we’ll see shortly) with 1,327 individual holdings.
3. It pays well, at nearly 6% today.

The accessibility of funds like HYG appears cute and comfortable enough.… Read more

The bombs continue to fall in the Middle East. But we contrarians know something the crowd always forgets at times like this:

The world is always burning somewhere.

At times like these, our Contrarian Income Report dividend strategy shines. Our portfolio yields 8.2% on average, and those dividends roll in no matter what the world throws at us.

The result? No need to sell into a downturn to get the cash we need. And we get the chance to go on offense, too, snagging dividends on the dips and boosting our income stream (and upside potential) as we do.

Rinse and repeat.… Read more

This high-yield sector is being taken to the woodshed by the Wall Street spreadsheet jockeys this year.

The contrarian opportunity? Big yields up to 15.6% in BDC Land. Some of these deals are trading for as little as 72 cents on the dollar.

Which means opportunists like us have been handed something rare: wild yields of 11% to 15.6% for as little as 72 cents on the dollar.

Business development companies (BDCs) are “Main Street bankers” because they do what Wall Street won’t: provide capital to small and midsized businesses that the big banks either ignore entirely, or won’t touch without demanding a firstborn as collateral.… Read more

$500K can be enough money to retire on. Even as early as age 50!

The trick is to convert the pile of cash into cash flow that can pay the bills. I’m talking about $40,574.93 per year in dividend income on that nest egg, thanks to 8%+ average yields.

These are passive payouts that show up every quarter or, in many cases, every month.

Meanwhile, we keep that $500K nest egg intact. Or, better yet, grind that principal higher steadily and safely.

Got more in your retirement account? Cool—more monthly dividend income for you!

We’ll talk specific stocks, funds and yields in a moment.… Read more