Author Archive: Brett Owens

By now, I bet you’re sick of “Best Stocks for 2017” articles.

That makes two of us.

So today, we’re going to take the long view, starting with a strategy you can use to steadily bulk up your nest egg—even if you’re 10 years or less out from retiring—and trigger a reliable income stream once you do.

Then I’m going to reveal 5 of my favorite dividend-growth retirement stocks to buy now.

“Wait a minute,” you’re may be thinking. “Aren’t dividend payers going to get crushed as interest rates rise?”

2 Keys to Beating Rising Rates

I have two answers to that.… Read more

Vanguard’s offerings don’t usually attract much attention from income investors. But they should – and I’m going to analyze five of the firm’s highest yield (and low cost) offerings shortly.

Three of them are compelling portfolio conveniences, while two have lagged their competitors in disappointing un-Vanguard-like manners.

While Vanguard provides a few actively managed funds, for the most part, it sticks to basic index funds and straightforward smart-beta funds in both the equity and bond arenas. The firm doesn’t delve much into the kinds of riskier strategies that tend to result in higher yields, nor does it deal in exchange-traded notes or leveraged funds that would allow it to gin up extra income.… Read more

What will 2017 hold for income investors?

Let’s sort through the current hysteria regarding interest rates, Trump and inflation. Thanks to some first-level insanity, there are once again pockets of value that pay meaningful dividends of 6%, 7% or better.

And many have some price upside to boot! Why?

Because Rate Hikes Will Probably Disappoint

This time last year, the Fed was promising four rate hikes over the next twelve months. The “smart money” crowd (via Fed Funds futures prices) was betting on two. And both parties were too aggressive as we saw just one rate hike in 2016.

Today we have Yellen & Co promising three hikes in 2017, while the futures markets say just two:

The Smart Money Bets 2 Hikes in 2017

Given their track records, I’m inclined to take the “under” on both predictions.… Read more

The S&P 500 is near record highs. The pundits see an elderly bull market with more room to run. The Federal Reserve says it will likely hike interest rates multiple times in the next 12 months.

Sound familiar? It should. Because it’s exactly what we were as 2016 dawned.

Here’s what happened in the following six weeks:

I know what you’re thinking: Yes, but the index did go on to recoup those losses and more, with big rallies following the Brexit vote in June and Donald Trump’s surprise win last month. In the end, it wound up the year with a 10.1% rise.… Read more

When you think of emerging markets, what comes to mind? Growth opportunities are likely first on the list … followed ever so closely by stomach-churning volatility.

What you probably don’t think about is income. But even in EMs, investors can dredge up some considerable dividend yield.

We all know the basic emerging market investment thesis: These “emerging” countries typically feature much more robust economic growth and quickly expanding middle classes. As a result, the companies there are expected to rapidly grow as they both feed off that greater economic pie, and as their operations become international in nature, building revenues around the rest of the world.… Read more

Looking for cheap stocks throwing off double-digit dividend hikes in 2017?

Bad news: it’s getting tougher to dig up these hallowed companies—and easier to fall victim to a dividend cut.

Consider the S&P 500, the be-all-and-end-all for most people when it comes to stock picking.

According to FactSet, 44 of the index’s constituents had payout ratios (or the percentage of earnings headed out the door as dividends) that were above 100% in Q3. That’s nearly 9% of the index, the second-highest total in a decade.

Not good.

Meantime, the S&P 500’s average payout ratio hit 40.2% during the quarter, the highest level in seven years.… Read more

The 10-year’s yield up to 2.6%? Big deal – you and I still aren’t retiring off it!

Hence the appeal of closed-end funds (CEFs), which often pay 8% or better. That’s the difference between a paltry minimum-wage income of $26,000 on a million bucks in capital, or a respectable $80,000 annually.

And if you’re smart about your CEF purchases, you can even buy them at discounts and snare some price upside to boot!

Unfortunately this rising rate environment has income seekers scared of CEFs. Many of our Contrarian Income Report subscribers are writing in to ask if they should bail on our high paying vehicles.… Read more

If you’re cutting back on stocks because interest rates are rising, you’re making a mistake.

But don’t just take my word for it (after all, I am a dyed-in-the-wool dividend-stock fan). Ask Ned Davis Research, which released its latest research on the relationship between stocks and rates about a year ago.

The finding? When the Fed moved slowly on rate hikes, stocks dropped immediately after each announcement … but went on to gain 10.8%, on average, in the next 12 months.

And as I’ve mentioned before, when Ned Davis’s researchers took a longer view—from January 1972 through December 2014, a period that saw far faster rate hikes than we’ll likely see this time around—they found that dividend growers outshine any other kind of stock, and not by a little.… Read more