Author Archive: Brett Owens

Dividend stocks are different animals. If you practiced “buy and hope” in your previous investing life, there are some habits you should leave behind.

Using a “stop loss” is one of them. In theory, stop losses limit downside while letting winners run higher. If a stock closes below a certain price, or drops a certain percentage, the “stop” will make you sell before things get worse. Instead of holding a stock all the way to zero, you’re forced to book gains (or at least cut losses) early.

It sounds like a no brainer. Why wouldn’t we want downside protection on all of our positions?… Read more

One question I field all the time is, “Should I own preferred stocks?” and my answer is always the same: “Yes, yes and yes.”

But after that, things get tricky.

When most investors think of investing in preferred stocks, they think about popular funds like the iShares U.S. Preferred Stock ETF (PFF) or the PowerShares Preferred Portfolio (PGX). But despite yields near 6%, these mainstream preferred stock funds are the wrong way to go. Instead, I suggest you take my lead and look at outside-the-box preferred-stock options like the three high-yield picks I have in store for you today.… Read more

Most investors still don’t understand dividend stocks.

Why?

Because they spend way too much time obsessing over one figure—the dividend yield—and ignore stocks with payouts below some arbitrary number, say 2%, which is about what the SPDR S&P 500 ETF (SPY) pays.

Consider Visa (V), a stock that gets zero love from the dividend crowd, no thanks to its 0.69% trailing-twelve-month yield, which has gone nowhere for five years:

Visa’s Dividend Downer

But if you’ve ignored Visa because of its low yield, you’ve missed out big time—this “boring” chart is actually a sign of powerful growth.

Because what it’s really showing us is that investors have been bidding up V’s share price in lockstep with its payout hikes (because you calculate yield by dividing the annual dividend by the current share price).… Read more

Healthcare real estate investment trusts (REITs) are at the crossroads of some very powerful investing themes that make them a one-two punch of potential growth and extremely generous yield. Today, I want to show you a trio of these double-threat dynamos that pay secure dividends up to 7.6%.

I love healthcare because it’s broadly unbeatable as a recession-proof investment. Plus the aging of the baby boomers is driving spending through the roof. Consider this: 10,000 baby boomers are reaching full retirement age every single day. No wonder, then, that the Centers for Medicare and Medicaid Services projecting that annual healthcare spend will grow 5.8% every year through 2025!… Read more

There are, literally, a billion reasons to avoid the energy sector right now.

Hedge funds now own a billion barrels worth of bets that crude oil prices are heading higher. Problem is, these guys are usually wrong – especially when they wager with such conviction!

In April 2014, I warned that then-$103 crude oil was due for a drop. U.S. crude oil inventories were at 5-year highs, yet money managers were “net long” 336,000 contracts on crude oil future. They were doubling down on the goo at the worst possible time.

When oil prices began to roll over, hedgies were forced to liquidate their bad bets in unison.… Read more

With the Trump bump squeezing stocks higher, retirees (and near-retirees) are asking me two questions a lot these days:

Is it still a good time to buy? And if so, what the heck should I buy?

The answer to the first is, undoubtedly, yes.

And it’s no secret what’s behind the second: according to FactSet, this market is trading at a forward price-to-earnings (P/E) ratio that hasn’t been seen in 13 years.

Investors Double Down

Source: FactSet

No wonder folks are struggling with what to buy!

One thing I recommend avoiding now is an index fund like the SPDR S&P 500 ETF (SPY).… Read more

Tax season can be a cringe-inducing affair for most investors, who have to fill out their 1040s, 1099s and K-1s with Uncle Sam hovering above, looking for his cut. But for investors who have bought into one of the five high-yielding funds I want to share with you today, this time of year is a friendly reminder of the greatness of municipal bonds and their fat, tax-free yields.

Most investors have money stashed away in bonds of some sort. Often, those bonds will be U.S. Treasury bills (debt issued by the federal government), though frequently, investors will have some exposure to corporate bonds (debt issued by companies).… Read more

Most investors buy stocks and hope they’ll go up in price. They do nothing in the interim to generate cash flow from those stocks while they sit in their portfolio – like writing covered calls.

“Write” what?

I’ll explain. And I’ll also highlight some popular exchange-traded funds (ETFs) and closed-end funds (CEFs) that will help you generate 8% yields or better from this income strategy without actually handling an options contract yourself.

A call option is a contract that gives its buyer the right to purchase a stock from the seller for a certain price within a certain period of time.… Read more

Today we’re going to head out to one of my favorite hunting grounds for cheap high-yield stocks: the midcap space.

“Wait,” you may be thinking. “Haven’t midcap stocks been on a tear? How can there be any bargains left?”

You’d be right about the first part … but not the second.

To get at why, let’s look at how the benchmark S&P MidCap 400 ETF (MDY) has performed vs. its large-cap cousin, the SPDR S&P 500 ETF (SPY) in the past year:

Midcaps Soar…

That rise has had a predictable effect on both funds’ dividend yields (because you calculate yield by dividing the annual dividend into the current share price):

…While Yields Shrink

I know—this still doesn’t make midcaps look like an ideal spot to find bargain high-yielders, but hear me out.… Read more