Author Archive: Brett Owens

Stocks or bonds? Why choose when:

1. Stocks pay just 1.5%
2. Bonds pay just 1.3%, yet
3. There are little-known hybrid instruments yielding up to 7.9%!

These vehicles aren’t risky. They just happen to be favorites of Wall Street insiders who don’t want income investors like us crowding their favorite trades.

Unfortunately for them, we are not going to apologize for this article in advance. It’s time for us to discuss how to take the 1.5% yield from the S&P 500, the 1.3% yield from 10-year Treasuries—throw each in the trash—and instead type in the “convertible bond” tickers we’re not supposed to know about.… Read more

The S&P 500 is still levitating, and if you’re like me, you’re starting to feel like this bull run is on borrowed time.

It’s understandable. The economy is just now stumbling to its feet, yet interest rates are already creeping higher. I think you’ll agree that we need higher borrowing costs like we need a hole in the head!

Treasury Rates Bust Through the 1% Barrier

Sure, 1.2% is a historically low number, but bear in mind 1% is an important psychological barrier, and we’re already well beyond that—and once rates broke through it, you can see how quickly they took off.… Read more

High-yield bonds have never paid less. Which is too bad, because let’s be honest—dividends are the reason we income investors wade in “junk bond” waters in the first place.

Fortunately, by being selective rather than lamestream, we can double our existing high-yield bond dividends. Nothing fancy, either. We sell the unselective ETFs and buy the ones with proven bond investors at the helm.

Before starting, let me make one huge point. It is true that almost all actively managed equity mutual funds aren’t worth the management fees investors pay. But some actively-managed bond funds most definitely are worth it.

The ETFs we would be selling are the two most popular high-yield bond ETFs.… Read more

Today we’re going to discuss the secret to double-digit annual returns every year, forever, with secure dividend stocks.

It’s simple but not easy. Here’s the hint. We must seek out hefty recurring payouts from stocks with dependable recurring revenue!

It’s one of the oldest business models there is, and it’s hands-down the best setup for us dividend investors: customers pay every week, month, year or whatever, giving a company predictable—and ideally growing—profits.

They then send those profits our way as predictable—and growing—payouts! Plus, many of these firms buy back their own shares too. Which, in turn, makes each share we own more valuable on a “per share” basis.… Read more

If we learned anything from 2020, it was the value of a few extra rolls of toilet paper. A close second? The reminder about the value of a reliable dividend.

This lesson has been taught over and over. The dot-com bubble. The Great Recession. The “COVID crash.” And sure enough, first-level investors don’t learn a thing—they chase one fat yield after another into the ground.

We next-level income investors know better. It’s important to consider the business engine under the hood. When we find cash flow machines like the eight dividend payers we’re about to discuss, we’re talking about decades of payments.… Read more

Another hand went up. I pointed for the next question.

When you consider dividend investments, Brett, what is more important in your opinion:

• The current yield and value of the stock itself, or

• The “engine” that is driving the business and the profits?

“Great question,” I replied. “The business engine. Always consider where the cash flow is coming from, first.”

In other words, if the business is humming, the dividends will be there. And as the payout keeps chugging along, so will the stock price. A dividend will protect the stock from downside and, with growth, provide a sweet kicker of upside.… Read more

You and I both know there’s a problem with the sugar high the stock market’s been on. Does it mean we should dump some of our beloved dividend stocks and try to buy them back at lower prices?

We’ll talk income strategies and market timing in a minute. First, let’s talk about these concerning behaviors exhibited by America’s odd couple, Mr. and Mrs. Market.

First up, we know a correction is coming. When a group of folks on a Reddit message board can drive one stock—GameStop (GME)—up 1,700%+ in a month, you know the market has become a bit unhinged.… Read more

The markets sure turned against “the little guy” in a hurry.

We chatted about the massive run-up in GameStop (GME) on Wednesday. I had a buddy of mine, who just happens to be a loyal Reddit reader, catch “short squeeze” fever.

If these guys and gals had tried to go anywhere, they’d have been stopped by the temperature check. That’s how hot they were running as Wall Street big shots were being forced to “buy back” their previously shorted GME shares at astronomical prices.

But short squeezes are often short lived, and GME has already plummeted two-thirds below its peak. Why the carnage?… Read more

Can you explain GameStop (GME) stock to me?

My buddy who texted isn’t usually into stocks. They are too quaint for him—heck, bitcoin has become too mainstream for him. Something was up.

Sure enough, I checked the GME chart, and whoa! What a move. And that was before last week’s moonshot, which propelled the stock to insane 1,000%+ month-to-date gains.

GME became famous on a website called Reddit, which lets users banter about common interests. Its financial-focused wallstreetbets board has been given credit for coordinating the GME buying and subsequent moonshot.

Which, as far as I can tell, is true. But it’s important to note that the money managers who lost their fortunes in the trade have only themselves to blame.… Read more

This GameStop madness is a clear and present danger to our dividends.

Let’s stop and look at exactly what it means for our income streams, and what we’re going to buy to protect ourselves (and cash in with monthly payouts up to 8%!)

When the Dumb Money Runs, We Need to Be Careful

The whipsawing shares of GameStop (GME), AMC Entertainment Holdings and others are classic cases of “dumb money” in action: they’re among the many short squeezes breaking out across the market—where short sellers, including hedge funds, betting against a stock lose big as buyers bid the stock up in an effort to “stick it to the suits.”… Read more