Author Archive: Brett Owens

The retirement-income battle never ends! Last summer, we watched cautiously for the next dividend cut. This summer, we’re tracking inflation.

No matter the worry, we can apply my “2-step retirement income plan.” It’s designed to keep inflation, another virus wave or pretty well any other calamity from impacting our dividend streams.

Inflation Sideswipes Retirees

First, though, we can “thank” Jay Powell and his runaway money printer for our sleepless nights. You can’t tell me that goosing the money supply by 30% in a little more than a year doesn’t have something to do with rising prices:

Powell Drains Retirees’ Buying Power

And retirees—the folks with the least amount of wiggle room in their monthly income—are taking the brunt.… Read more

For the past few weeks, I’ve been drawing up a roadmap of how income investors like us can fend off inflation’s impending march.

Utility stocks. Small banks. Heck, small businesses.

But they all center around one central theme you can find in just about any corner of the market: dividend growth. Show me a payout that is heading higher, and I’ll point you to a stock price that is likely to follow.

We’ve got a big summer ahead, with 48 dividend raises on the way! Here’s why these stocks are must-watches for the months ahead.

Why We All Need Bigger Dividends Over Time

It’s simple math.… Read more

Unlike the broader market, REITs (real estate investment trusts) haven’t been messing around this year. The Vanguard Real Estate ETF (VNQ) has convincingly broken out to new highs.

For us dividend stock traders, the choice between the confident VNQ and tip-toeing S&P 500 has been an easy one. With short-term time frames, it’s usually best to ride the hot trend:

Money Cycles Towards REITs

REITs are on fire—the good kind, not 2020 dumpster variety—but they still have upside thanks to last year. Many perfectly good real estate stocks were tossed into the trash. These are high-quality landlords still trading on the cheap side as that 2020 stench slowly fades from their shares.… Read more

When it comes right down to it, we dividend investors really only need three things:

• Bargain stocks with …
• High current yields and ideally …
• Monthly payouts—so we can line up our income with our bills and reinvest our dividend cash without having to wait for three long months.

I know—this list is cute, but it sounds wildly out of step with the times.

After all, the COVID rally has sliced the typical S&P 500 stock’s yield to an unlivable 1.4%. And bargain valuations? Ha! Stocks trade at a helium-powered 37-times their last 12 months of earnings right now.

And we all know that to get monthly payouts, we must look beyond the popular stocks to lesser-known plays like real estate investment trusts (REITs) and closed-end funds (CEFs).… Read more

The Federal Reserve is finally beginning to admit that it’s here and, at the moment, it’s spectacular. Chairman Jay Powell is still sticking with his “it’s only transitory” story, at least for now. Mr. and Ms. Market were spooked for a moment, until they remembered that money printing flows directly into the stock market.

So, we dividend investors continue our hunt for safe, meaningful yields amidst this mania-of-sorts that has enveloped everything from tech to lumber to crypto to big tech again. We’ll discuss five safe utility dividends—paying up to 9.9%!—in a moment.

First, let’s review the agency’s acclaimed “dot plot” which showed not only that the central bank was now expecting rate hikes by 2023, but that we’d get a pair of them.… Read more

Let’s take advantage of this pullback! In a moment, I’m going to outline two generous CEFs (closed-end funds) that pay 6.6%.

Thanks to last week’s market action, each fund trades at a generous 9% discount to its NAV (net asset value). In other words, each CEF trades for just 91 cents on the dollar. Great deals.

Academic “quants” would buy these funds if they could. I can recall this from the time I was scribbling furiously on my “ETF Managers Group”-sponsored notepad at the Inside Fixed Income conference in San Diego, CA. (in-person to boot, how 2019!). Full “dividend geek” mode took over and I wrote faster and faster.… Read more

Our man Jay Powell is talking a little more about raising rates. Right on cue, stocks have dropped, and dividend yields have popped!

Our contrarian buying opportunity is here.

But wait. Even with the latest pullback, the yields on the popular names of the S&P 500 are still only 1.3%. And how can you call the S&P 500 cheap when it still trades at a nosebleed P/E of 37?

You can’t.

But lucky for us, there are always overlooked assets out there. To find them, we’re going to skip the S&P and go with another acronym: “C-E-F,” for closed-end fund.

If you’ve heard of CEFs, you know that they’re famous for huge dividends.… Read more

Healthcare—along with consumer staples (“buying stuff”) and utilities (“keeping the lights on”)—provide portfolio stability. Plus, they usually pay dividends, too!

Of the three safety sectors, healthcare is a steady growth market, too. Consider these stats from the Centers for Medicare & Medicaid Services:

• National health spending is projected to grow at an average annual rate of 5.4% for 2019-28 and to reach $6.2 trillion by 2028.
• National health expenditures are projected to grow 1.1 percentage points faster than gross domestic product per year during that same time period.
• Between 2019 and 2028, healthcare’s share of the economy will rise from 17.7% to 19.7%.

I recently accomplished something that had been on my “to do” list for no fewer than three months.

I figured out how to log into my 401(K)!

You would think a simple “password reset” would not be that difficult, especially for a guy who has started a software company or three in his day. Well, I’m not embarrassed, just glad that my long personal investing nightmare is over.

What is it about 401(K) access? It’s a circus when we try to log into my wife’s retirement plan, too. (Any task that starts with “logging into her company’s VPN” is off to a rough start.)… Read more

In a levitating market like today’s, we dividend investors absolutely must have a portfolio that does three things:

1. Automatically “times” the market for us.
2. Frees up cash for us to grab bargain dividend stocks on pullbacks and, of course …
3. Pays us a growing income stream!

We’ll get to point No. 1 in a second. Let’s start with point No. 2.

Most people panic when the market drops, but we dividend investors know that volatility is our friend. It’s easy to see this just by looking at what the S&P 500 benchmark SPDR S&P 500 ETF Trust (SPY) has done in the last five years.… Read more