Author Archive: Brett Owens

Are the best things in life actually free? It depends how we handle the hidden costs.

Free coffee is good. At home, I drink one mega-cup per day. At fixed income conferences, I typically scale that “complimentary” consumption up to double-digits per day. (Hey, they’re just hotel cups.)

Free breakfast is usually better than just free caffeine. And open bar, of course, reigns supreme for your income strategist.

No doubt these freebies are baked into ticket costs, but I will gladly accept the bacon and beer challenge to get my money’s worth.

When readers write in to ask my thoughts on “risk free” yields on certain bonds, it’s time for us to talk.… Read more

With stocks grinding along near all-time highs, decent discounts (and decent dividend yields!) are thin on the ground. But if we look close enough, they are there.

The answer to this no-yield problem is simply going one step beyond the blue chips everyone buys. Our big dividends (at discounts) are lying there in a corner of the market that few serious investors pay attention to. That’s too bad for them, but great for contrarians like us.

I’m talking about closed-end funds (CEFs), which, as a group, yield around 7% on average as I write this.

And here’s the truly underappreciated thing about these high-paying funds: many of them own the big names of the S&P 500 anyway!… Read more

Energy prices have rallied furiously, but they likely have further to go. Oil and gas prices last peaked around 2014 and sunk slowly until the black goo hit negative prices in the spring of last year.

A six-year bear market takes more than 13 months to unwind. Which is why energy dividend stocks remain quite attractive.

Oil and gas stocks are 4% yielding on average, which is nearly a full percentage point more than we can get out of real estate investment trusts (REITs) at the moment. And as I’ll show you in a moment, we can squeeze yields of between 5.0% and 9.2% from “Texas tea” if we know just where to look.… Read more

No doubt, there is a lot to be worried about right now in the financial world. Fortunately, there is finally a lot of worrying happening.

We contrarians welcome unease. Broader discomfort means dividend deals.

Investor sentiment is at last falling back to earth after months in the clouds. Sometimes these emotional drops are drawn out. Or the breakup can be short and swift.

Last September and October, too-cheery bulls got splashed with cold water. Their wake-up call, fittingly, came just weeks after we chatted about their “over the top” sentiment. We specifically discussed the likelihood of a 10% pullback given the extreme levels of investor cheer.… Read more

“I have no clue what to do,” said a friend recently over backyard beers. “On the one hand, stocks are still rising. On the other, everything is pricey.”

I know you’re feeling my buddy’s pain—I get similar sentiments from readers of my Contrarian Income Report service all the time.

The last few weeks of wild swings sure don’t help. No doubt your finger has hovered over the buy button but you’ve hesitated, worrying you’re getting in at the top.

That’s understandable: no one wants to be the last buyer in a bull market!

Let the Market’s “Fear Indicator” Guide You to Big Gains (and Dividends)

The solution to this dilemma is a strategy only a contrarian could love—we’re going to navigate by the VIX—the market’s so-called “fear indicator.”… Read more

The Fed has crushed many retirements because bonds simply don’t yield enough. Heck, neither do most stocks thanks to the equity bubble they’ve inflated!

But we dividend-focused retirees have a four-letter secret at our portfolio’s disposal. I’m talking about yield machines that pay up to 8%. And thanks to a slow 2020, these stocks are still reasonably cheap. I’m talking:

R-E-I-T.

Real estate investment trusts (REITs) are a great source of yield. If you’re a regular reader, you’ll probably recall our reasons why REITs hold up well against inflation.

Today we’ll discuss some studies that support this “inflation-proof” position.

In theory, inflation should weigh on REITs much the way it does on many yield-bearing assets.… Read more

Let’s chat about making some real money in stocks. I’m talking about 14.6% returns per year, every single year.

I know, my 14.6% annual number sounds pedestrian in a world where peddlers are hawking virtual (pretend?) coins with pups on the cover. But my returns are real—and spectacular for investors who are patient.

With this method we can double our money every four years and ten months (the wonderful Rule of 72 says so!). And we can achieve these gains safely—without gambling or buying and hoping—because these profits are fueled by dividends.

The only twist from the traditional income investing that we both know and love is that we’re playing the dividend growth plus the current yield.… Read more

Don’t let this inflation panic rattle you. This market is really just shifting gears, and we’re going to shift along with it, riding the waves to some big dividends that are about to switch into growth mode.

But timing is critical here, because we’re not going to be sitting on these dividends forever. Consider them a “swing trade” to bag big payouts now, plus some hefty dividend hikes. Then you’d take your returns on to the next bargain high yielder when the time is right.

More on this week’s hot-potato dividend plan in a sec. First, let’s delve into what this inflation-panicked market is up to, and how we contrarians can catch a tailwind.… Read more

“Don’t you own that, B.O.?”

Go figure. While some people are thought of for their jokes, their hobbies or their families, a reader thought of me when they read about a Vanguard fund underperforming of late.

The poor ol’ Vanguard Dividend Growth Fund (VDIGX). Longtime readers know I’ve yapped about this before. While I rarely mention (let alone endorse!) mutual funds, VDIGX is notable for two reasons:

• I plow 100% of my 401(K) contributions into this fund, and

• It’s a pretty good option as far as retirement plans go.

Why this fund? Because in my “Brett Inc.” company plan, I have a set list of Vanguard funds to choose from.… Read more

Corn Prices Hit 7-Year Highs

What a headline!

Mr. and Ms. Market could handle a spiking M2. They could turn a blind eye to higher 10-year yields. But now, JP has really backed himself into a corner. Fed Chair Jay Powell has lit a fire under corn prices, of all things:

That Ain’t Crypto—That’s Corn

“This is how inflation starts,” the pundits say. Higher commodity prices drive the Producer Price Index (PPI) up. Consumers (you and I) pay more at the grocery store, and this is reflected in a jump in the CPI (Consumer Price Index).

And the CPI, of course, is the inflation calculator used by the government.… Read more