Author Archive: Brett Owens

Today I want to talk about a corner of the market that has been overlooked for far too long despite offering sustainable high yields of 4% or more—with dividends primed to soar even more.

This sector is a distant cousin to a more familiar group of stocks: utilities. Utility stocks were once Wall Street’s best kept secret: high dividends, cheap valuations, sustainable business models, and steady revenues were all reasons why many big investors quietly bought these small regional companies. Sadly, the cat’s out of the bag. Utility stocks are up nearly 14% year-to-date as investors pile into the sector:

Utilities Gone Haywire

Just look at the performance of the SPDR Utility ETF (XLU), which is up massively even after a recent correction from its shocking 22% year-to-date return earlier this summer.… Read more

So far, 2016 is shaping up to be a great year for just about anyone in the stock market. With the S&P 500 up 7% year-to-date, it’s been pretty tough to lose money in this year’s market.

That’s caused a lot of money to flow into high income yielding stocks, although some aren’t covering their dividends and some have grown wildly overvalued.

For now, income investors are ignoring these developments, since they’ve been getting paid cash dividends while their tickers trend up. This has also encouraged a growing number of investors to pile into business development corporations (BDCs), a group of specialty lending firms that pay dividends of 8% or more—sometimes much more.… Read more

Today I’m going to take you inside an ignored corner of the market where you can still find cheap stocks throwing off quarterly dividends that grow 10%—and more—year in and year out.

Then we’ll zero in on three of these under-the-radar companies, all of which should definitely be on your buy list now. Along the way, we’ll unmask two dividend darlings that are actually “yield traps”—their dividend histories make them look tempting … but buying now could be a recipe for steep losses.

The Best-Kept Secret in Stock Investing

So where is this income investors’ wonderland, you ask?

I’m talking about mid-cap stocks, or companies with market capitalizations between $2 billion and $10 billion.… Read more

When planning for retirement, most investors try to split their assets between stocks (higher risk, higher return) and federal U.S. government bonds (lower risk, and these days, much lower return).

Problem is, stocks are enjoying an overextended winning streak. The S&P 500 is up over 7% year-to-date:

S&P 500 Moves Up and To the Right

That’s quite nice, especially after the 1.4% return that the same index had last year. But when we consider its performance in 2014 (13.5%), 2013 (32.2%), and 2012 (15.9%), investors are right to give pause. Has the market outperformed for too many years in a row?… Read more

S&P’s new REIT index is officially live – but don’t worry, there’s still a way to front run it!

I’ll get to specific bargains in the sector shortly. First, let’s review the stocks that have already been bid up by investors and money managers looking for exposure to this newly celebrated sector.

Barron’s reported that investors have been using ETFs to invest in REITs, because most individual names – even the sector’s blue chips – aren’t well known by the first-level types.

I believe it, and they don’t need the “s” in ETFs, because the only REIT ETF anyone really knows or buys is the Vanguard REIT Index Fund (VNQ).… Read more

With all this talk of rising rates, it’s surprising that bond funds are doing so well. The largest bond ETF, the iShares Core Total US Bond Market (AGG), is up over 4% in 2016 and hasn’t paused its bull run throughout the year:

Investors are Hungry for Bonds

Tax-exempt bonds aren’t doing as well, but they’re still strong. The USAA Tax Exempt Intermediate-Term Bond mutual fund (USATX) is up 2% for 2016, and has not pulled back year-to-date, even during February’s market meltdown:

Tax-Free Bonds Hold Their Value

When we look at the yields of these funds, their steady performance is even more surprising.… Read more

Right now, plenty of investors are quaking in their boots, wondering if they should sell their real estate investment trusts (REITs) this month.

Why? Two reasons. Let’s debunk them one at a time. (Then I’ll reveal two REITs that are screaming buys because of this situation and two you need to avoid—or sell right away if you hold them.)

A Costly Mistake

The first worry has to do with an old adage that just won’t go away. Stop me if you’ve heard it before: “REITs perform poorly when interest rates rise.”

It’s true that the Federal Reserve will probably hike rates at least once before we ring in 2017—likely in December, according to traders betting via the Fed funds futures market.… Read more

We all know the secret to successful investing is buying low and selling high. But what does that mean, exactly – do we simply buy companies growing their top lines aggressively in today’s low-growth world?

There are dangers in this approach, which put you at risk for drastic losses. Take, for example, people who bought Twitter (TWTR) when its revenues were doubling, sure that they were getting a piece of the next big thing:

Big Losses for Twitter Enthusiasts

Smart, cautious investors avoid these dramatic losses by buying high quality, established companies when their earnings are cheap. Even better, they buy stocks that pay dividends – and raise them consistently.… Read more