Author Archive: Brett Owens

What are we dividend investors to expect in 2021? Let’s look to Washington, DC, where the switch on Jay Powell’s printing press is stuck in “high”:

Money Supply Surges—With No End in Sight

With Powell’s fiat money keeping (what’s left of) the Main Street economy afloat, you can bet that his “instant” cash will keep rolling in. He’ll have a willing partner in incoming Treasury Secretary Janet Yellen, who followed the same strategy when she was Fed chair:

New Boss Same as the Old Boss

This is a recipe for inflation once the economy gets back on its feet. Back in September, we discussed some stocks that make solid inflation hedges by hiking their dividends faster than prices (and inevitably, interest rates) rise.… Read more

Here at Contrarian Outlook, our beat is income, and we’re often asked for analysis on high-yield ETFs. Today, we’ll look at three funds paying up to 11% (yes, that’s no typo).

I appreciate the ETF popularity. They’re cheap. They’re tax-efficient. They’re  well-marketed. They’ve got cutesy tickers.

But income investors who blindly buy into the hype, unfortunately, are not getting the most dividend for their dollar.

The real dividend deals are found in ETFs’ lesser-known cousins, closed-end funds (CEFs), which often dish even bigger payouts (and a monthly cadence, to boot). CEFs can also trade at discounts to their net asset values, because they fly under Wall Street’s radar.… Read more

Thank you to our 1,581 Contrarian Income Report subscribers who attended our webcast last week! My publisher described it as a “firehose of information”—hopefully, that was a good thing!

We have you, our thoughtful reader and income investor, to thank for the inspiration behind the firehose. We fielded 45 questions before the event and another 127 on the call, for a total of 172. Amazing.

As promised, I have read each and every question (as has our excellent customer service team). In the weeks ahead, we’ll discuss as many as I can find white space for. Let’s start with six today.… Read more

Stocks are up, the economy is in shambles and lockdowns are making a comeback. But people are also being vaccinated as I write this, just 12 months after we learned that COVID-19 was even a thing.

How do we invest through this transitional market? I’ve got a three-point plan for you that works in any economy—not just the Twilight Zone one we’re living in now.

Step 1: Start With “Tollbooth Stocks” and Build From There

Tollbooth stocks are the kinds of companies we safety-conscious dividend investors love: they hold the infrastructure—think pipelines, warehouses and data networks—big players like, say, Amazon.com (AMZN) must have to operate.… Read more

Real estate investment trusts (REITs) as a group have been kicked to the curb this year. The sector has returned negative 1.3% including dividends—third-worst among the S&P 500’s 11 sectors, and miserable showing compared to the index’s 16.5%.

But note that I said “as a group.” Some landlords are doing just swell.

The secret to REIT picking, right now, is to identify the companies that are still collecting payments like it’s 2019.

Here’s NAREIT’s most recent rent-collection data, covering rents collected between April and September—all of our newly completed “shutdown” and “re-opening” and “just kidding, we’re closing again” months.

Source: Nareit

You’ll notice that NAREIT didn’t bother calculating some categories.… Read more

Imagine investing a million dollars and getting back… a pathetic $16,000 in income every year.

You don’t have to imagine—because that’s exactly what you’d get if you bought the average S&P 500 stock today, which yields a sad 1.6%. That’s not much and these days, you can lose that in one afternoon!

No wonder dividends get no respect!

But I’ve got good news: that 1.6% doesn’t matter a bit to us. In fact, it’s a distraction from the real opportunity I want to show you: a dead-simple, 3-step shot at a much bigger payout.

I’m talking about 6%+ in cash here.… Read more

The mainstream crowd has gotten way too greedy—which means we could be in the teeth of a stock-market selloff within weeks.

Most folks hear the word “selloff” and gasp. But not us contrarian dividend hounds! We know that volatility is our friend. It’s easy to see this just by looking at what the market’s done in the last five years. You’d have amped up your performance a lot just by buying the dips.

Buy and Hold? Nah. The Timing of Your Buys (and Sells) Matters

This year is a classic example. If you’d bought the typical S&P 500 stock on the first day of February, pretty much at the go-go peak of early 2020, you’d be sitting on a 15% total return now.… Read more

When April 1 rolled around, many mortgage payments were made late. That was no joke—we were in the midst of our first (and most serious) round of lockdowns.

Who knew what bills were going to get paid, if any?

Mortgage REIT (mREIT) stocks, which require mortgages to actually be paid, suffered broadly and badly. Some shares, such as industry bellwether Annaly (NLY), dropped as much as 60% in just more than a month. This plunge crushed many income investors, who rely on the fat dividends paid by the sector (11.2%, on average!) to fund their retirements.

Now, mREITs don’t actually own or operate any real estate (unlike their REIT cousins).… Read more

Is the 60/40 (stock/bond) portfolio now 100/0 in favor of stocks?

That’s been the subject of several financial headlines lately. The authors are suggesting that the traditional mix of 60% large-cap stocks and 40% safe bonds won’t generate enough money for us to retire on unless we’ve got a cool $10 million or so. And, they’ve got a point, with the S&P paying less than 2% and US Treasuries yielding under 1%.

But even a 100/0 portfolio won’t help you too much. Put it all in the popular SPY ETF, and we’re still under 2%! Plus, this “heart attack kid” can fluctuate by 1% or even 2% per day.… Read more

With stocks breaking to all-time highs, we should emphasize security of the dividends we’re purchasing first and foremost. In previous months, it was a good time to be greedy. Now, with other investors in a fervor, let’s be careful.

The main thing we don’t want to do in a pricey market like this? Join the millions of “buy and hopers” out there. I call them that because they “buy” the typical S&P 500 stock and then “hope” for gains.

They’re sure not buying for the dividends: the popular names pay a poverty-level 1.6% income stream, on average.

With a lame yield like that, hoping for a jump in the share price is the only play you’ve got!… Read more