Author Archive: Brett Owens

Last week, on our dividend trading webcast, several readers asked me how I manage my own money. Well, it’s a bit different from the “buy and hold” (or hope!) strategies employed by most income investors. Here’s why…

I don’t like holding full positions during downturns. When the market looks like it’s about to roll over, or when it actually begins to roll over, I (personally) head for the sidelines.

And when the pullback is over, I flip my cash back into the market. It’s that simple.

Following this strategy, there have really only been four “trades” to make all year.… Read more

It’s rare when we get not one but two crashes bigger than 10%+ in a single year—but hey, it’s 2020. Anything goes.

But take just a second and imagine that you dodged both of those disasters, resting easily on the sidelines during the chaos. Then you moved into stocks for the rest of the year. In that case, 2020 just may be your best year yet!

 A “Dream” Strategy (That’s Possible to Achieve!)

Of course, no one can precisely predict the market’s next move. But what I’m about to show you is as close as I’ve ever seen an investing system get.… Read more

Firms increasing their dividends in 2020, of all years, are sending a powerful “payout confidence” signal to Wall Street:

Our dividend is safe—so secure, in fact, that we’re hiking it. Watch our stock price follow.

The bigger the increase, the greater the level of confidence. In a minute, we’ll investigate five of these dividend buy signals.

S&P Dow Jones Indices’ Howard Silverblatt writes that there were 309 dividend increases during the third quarter, versus 102 declines—better than the 244 versus 639 “upside-down” split from Q2. (Though we’re still grading worse than this quarter last year, when 426 firms raised and only 94 cut.)… Read more

Successful dividend investing is simple, though not necessarily easy. There are nuances which trip up many investors (including most professionals!). These twists and turns create “yield alpha” opportunities for contrarian-minded income investors like us.

If everyone else in the market were perfectly grounded and calculated, there would be no chance for us to make above-average returns. Thanks to these inefficiencies, we are able to bank big yields and price gains in Dividend Land. Ready to retire on dividends? Follow these five steps and we’ll do it together. Let’s start with an obvious yet underappreciated rule for income investors.

Step 1: Count Your Dividends

Since we focus on high yield, most of our returns come from the “yield” component of stocks.… Read more

My indicators are pointing to one thing right now: higher stock prices, with new all-time highs next year. So this is a great time to lock in some fresh 8%+ payouts—before their prices race away from us!

But wait a minute. The economy stinks and our political process seems more dysfunctional than ever. So why would stocks climb from here?

Money Printer Goes Brrrrr…

The answer lies with Fed Chair Jay Powell’s printing press monetary policy. Since March, he’s been flooding the economy with liquidity. Other central banks around the world have been generous, too.

Powell Goes All In

We both know that printing buckets of money is a recipe for higher inflation.… Read more

We can’t take every dividend we see at face value. Especially when we’re talking about 8%, 9% and even 10% yields.

Bull markets, government stimulus, money printing and the scent of all-time highs might give the impression that any stock is safe. Unfortunately that isn’t the case. Even in a bull market, there are dividend traps paying 8% to 10% that’ll sink despite the broader rising tide.

The market might have taken a deep breather earlier this spring, but multiple expansion hardly slept a wink. Thanks to battered earnings, the S&P 500 has only gotten more expensive as the year has rolled on.… Read more

Earlier this year, we added Synovus (SNV) to our Contrarian Income Report portfolio. We’ve enjoyed 36% total returns—including a couple of fat dividends—in the six months since. On a yearly basis, these gains annualize to 75%.

“Can we do this every time?” subscribers have asked?

That’s asking a bit much, but it doesn’t hurt to ask. (My young daughters know this well, because they are not shy about asking to eat ice cream at every meal!)

After all, if we reach for 75% yearly gains and have to “settle” for 17.5% profits, we’ll take that. It’s really about the process and stacking the probabilities in our favor on each given dividend purchase.… Read more

Even with the S&P 500 back on the rise, we still have a shot at serious upside. And we’ll double up our dividends in short order, too. We’ll do it by snagging some of the fastest-growing payouts on the planet.

That’s not all—we’ll also buffer our payouts against the next crash by stocking up on companies with “fortress” balance sheets, specifically firms whose cash holdings dwarf their debt. Dividend-payers like these—I’ve got four examples for you below—will (eventually) dole out their cash to us in three ways:

• Investing in the business,through R&D spending and capital expenditures, fueling their earnings per share (EPS) and, by extension, their share prices.

The mortgage. The car payment. The power bill. The cell phone bill. Your regular dividend check.

One of these things, I’m sorry to say, is not like the others.

While almost every one of your obligations comes once a month across all 12 months of the year, most stocks or funds you can invest in will pay you just four times a year.

If you’re still working, you’re probably thinking “no big deal.” That’s true—your job pays you once or twice a month, so who cares when you collect dividends? You’re not touching your 401(k) or IRA now anyway.

But retirees know the struggle.… Read more

It was a simpler time years ago in America when my grandfather shared some nutritional advice with me:

“So, you’ve got the tomato sauce. Tomatoes. They’re good for ya,” as he put out his thumb to indicate the count was now one.

“And the cheese,” he continued. “Dairy. That’s good, too.”

Two fingers on grandpa’s right hand reflected the updated count.

“Plus the bread. That’s another group.”

Three points for pizza being good for you. My 12-year-old self was thrilled! I informed my parents about the good news on our car ride home from grandma and grandpa’s.

“You are not having pizza for every meal,” they quickly dismissed my nutritional news.… Read more