Author Archive: Brett Owens

Here’s a fact: if you want to clock out of the workforce in any kind of comfort, you’ll need $4,000 a month—$4,074, to be exact.

How do I know?

Because that’s what your average 65- to 74-year-old couple shells out every month, according to the Bureau of Labor Statistics. It comes out to $48,885 a year.

Of course, that figure swings based on where you live, but let’s look at your typical retirement hotbeds: I’m talking about the Carolinas, Florida and Arizona—places you’d like to live if your idea of retirement doesn’t involve pushing a snow blower.

According to a recent CNBC survey, all of these states ranked in the middle of the pack by cost of living.… Read more

Sometimes it’s best to sell in May and just stay away. Especially when a firm’s dividend stream is being eaten alive by Amazon & Co.

The Wall Street Journal’s Mark Hulbert studied the “summer rally myth” last year – and concluded it is indeed a good time to sell:

“Over the past 60 years, the Dow Jones Industrial Average has produced an average monthly return of just 0.1% during these three summer months, compared with a 0.7% average for all other months.”

Worse, even skilled market timers don’t have much to work with. Hulbert found that over the past 60 years, rallies from June’s lows into highs over the next two months averaged 6.9% — the third-lowest such rally potential, behind (you guessed it) July and August.… Read more

Most business development companies (BDCs) have low profiles on Wall Street. Their relative obscurity makes them good vehicles for banking high yields – in fact, today we’ll discuss three that pay between 12% and 16% annually.

BDCs invest in small- and midsize businesses, the building blocks of entrepreneurial America. They were created by the government in the 1980s to help grow up-and-coming companies in a bid to stimulate business and create jobs. They provide debt, equity and other forms of financing to businesses that larger banks and investment firms shy away from.

They’re also income machines by law.

Their regulated structures require them to dole out 90% or more of their taxable income to shareholders in the form of dividends.… Read more

When the “Bond God” Jeffrey Gundlach speaks, yield hounds listen. And earlier this month, the preeminent income investor on the planet shared his favorite stock idea with a private audience.

I’ll share the specifics on his recommendation in a moment, including the exact “pair trade” that Gundlach likes. But first, let’s recap why we care what he says.

His Profitable Contrarian Calls

When Gundlach speaks, he often takes heat from his peers and the media because his calls run contrary to popular belief. But he’s usually right – and profitable:

• In 2007, he warned investors to get out of subprime mortgages just before the credit markets melted down.

Most folks buy closed-end funds for one reason: big yields!

But that’s not the only reason—and depending on your situation, it may not even the best reason for you, as I’ll show you shortly. (I’ll also reveal 3 tricky, but easily avoidable, blunders many folks make with CEFs).

First, there’s no doubt CEF payouts are legendary.

According to BlackRock’s latest quarterly update, dividend yields range from an average of 2.25% in the lowest-paying CEF sector (emerging market equity) to 9.9% in the highest paying (municipal-bond funds). (The muni-bond fund yield is on a tax-equivalent basis and based on a 43.4% tax rate, as munis are exempt from federal income tax):

A Rich Hunting Ground for Yield Fans

Source: BlackRock Closed-End Fund Market Review, March 2017

When you take these sectors and average them out, you get a gaudy 7.8% payout!… Read more

Income investors often ignore the technology sector. That’s a shame, because tech stocks have been one of the best sources of dividend growth over the past few years.

Plus, some familiar names now pay substantial yields. In fact, in just a minute, I’ll introduce you to seven tech stocks that offer payouts into the mid-double digits!

But first, let’s talk about the biggest income mistake that countless investors are making right now.

Most first-level thinkers pile into “defensive” stocks like consumer staples and utilities. Unfortunately, while most of these companies do offer secure dividends, they don’t offer much upside.

And investors who “don’t care because they’re in it for the dividends” end up with payout raises that severely lag those lavished upon tech investors:

Utilities and Staples: Two “Safe” Ways to Underperform

Since this time 2009, the Technology Select Sector SPDR (XLK) has seen its nominal dividend well more than double – a nearly 155% increase that not only dwarfs dividend mainstays like utilities (XLU) and consumer staples (XLP), but trumps the S&P 500 itself by half!… Read more

You won’t see these “hidden yields” quoted on any financial website. But these firms are showering their shareholders with double-digit yields – and making their owners rich in the process.

The key to finding them? Look beyond the stated yields and focus on the more nuanced (and more valuable) “shareholder yields”.

Take Corning (GLW) for example. The maker of Gorilla Glass never pays more than 3% – if you only look at the current dividend, that is:

Always a Modest 2%+ Yield

But Corning’s shareholder yield – which properly includes money the firm spends on share buybacks – has climbed into double-digits in recent years.… Read more

Fact: When interest rates rise, you need to be in dividend-growth stocks.

Proof: They’ve handily beaten the S&P 500 in the 17 months since the Federal Reserve put the zero-interest-rate era on ice.

In just a moment, I’ll show you 2 terrific off-the-radar dividend-growth plays to snap up now—and 2 surprising blue chips you’ll want to keep well away from your nest egg.

First, take a look at how the iShares Core Dividend-Growth ETF (DGRO) has performed vs. the SPDR S&P 500 ETF (SPY) on a total-return basis since December 16, 2015, the day Janet Yellen raised rates for the first time in nine years.… Read more

Dividend growth is one of the keys to a strong retirement portfolio (and 12% annual gains forever). While any stock boasting a big stated yield is sure to grab your attention, if that dividend isn’t growing, it’s actually shrinking (as inflation eats up more and more of that income every year.)

That’s why I regularly keep my eye on dividend increases … and why I’m looking at a bundle of stocks that are very likely to up the ante on their regular payouts over the next few months.

If you’re an income investor, it’s increasingly important to focus on dividend growth because – guess what?… Read more