Author Archive: Brett Owens

“Jenny, I can imagine. My wife makes fun of me when I ice my knees after basketball games,” I confided to my friend and favorite bartender.

Her husband, no “young chicken” anymore either she joked, was sore from his own martial arts contest. She bought him a CBD “bath bomb” to help with the aches of being active and middle-aged.

Always the sucker for natural remedies and bartender wisdom, I teed up an Amazon selection for pain and inflammation. Just 26 hours later, I was massaging hemp, turmeric and MSM into my patella tendon (about an hour before tipoff):

BO’s Anti-Inflammatory Pick

“You’re a terrible scientist,” my wife reprimanded me after I bragged about my patella’s comeback in my postgame recap.… Read more

If your mattress is a bit heavy on cash these days, you’re probably grinding your teeth every day as the markets tick higher. Should you be in the market? Shouldn’t the market pull back eventually?

Here’s a solution that’ll get your “buy and hope” friends out of your face: buy some dividend machines that’ll pay you while the markets levitate and hold up just fine if we do see the dip we’re overdue for.

I’m talking specifically about three mighty “pullback-proof” dividends (yields up to 7.5%) perfect for the “cliff-edge” market we’re seeing now. More on those in a moment.… Read more

A stock’s yield is only as good as its cash flow because, after all, a dividend is nothing more than a promise from a company.

CenturyLink (CTL) recently reminded us of this. Its promised $0.54 per share dividend exceeded its ability to pay. The firm’s payout ratio of 130% – the percentage of profits that it was paying as dividends – was an absurd overpromise that couldn’t last forever:

CenturyLink’s Payout Promise Was Always on Borrowed Time

CEO Jeffrey Storey insisted his team remained “committed to and confident in our ability to maintain the dividend.” I understood the commitment, but questioned the confidence–taking on debt to pay dividends is a losing game.… Read more

“Does Brett know of a fund that employs a dividend capture strategy?”

Our customer service guru Jonathan has fielded many questions of this flavor in recent weeks and months. And thanks for asking, because I do! Hat tip Wall Street Journal:

“Alpine Woods Capital Investors LLC has employed dividend-timing strategy quite successfully in its Alpine Dynamic Dividend Fund, but the firm believes its approach will work even better in its first closed-end fund.

“The new closed-end fund combines three strategies —dividend capture, value and growth—to maximize the amount of distributed dividend income that qualifies for the reduced rates and to find companies globally with the potential for dividend growth and capital appreciation.”… Read more

The “yield curve” has inverted—and that could be terrible news for your dividends!

But don’t worry: there’s a “pullback-proof” way to keep your income and your nest egg secure—no matter if there’s stock-market fire behind all this yield-curve smoke.

Below I’ll reveal three stocks perfectly positioned for whatever lies ahead: if the market tanks, they’ll likely trade flat, thanks to their cheap valuations (and sturdy dividends).

And if it all turns out to be hype and the market keeps rolling higher? They’re poised to skyrocket while handing you a 7.1% average payout (with one of these stealth buys even throwing off an amazing 9.3% yield!).… Read more

Sometimes investors forget that dividends are funded by actual cash flows.

Consider General Electric (GE), whose outsized yield tempted investors to mistakenly buy shares in this “blue chip” as disaster was unfolding. The stock losses started well before the actual dividend cut and continued on from there:

(Accounting) Imagination at Work

This focus on yield rather than cash happens too often. It’s what prompted me to warn readers about the sky-high yield of Frontier Communications (FTR) a year ahead of its 2017 cut:

A Broken Telecom (and Broken Dividend)

The “not enough cash” problem also prompted me to sound the alarm on L Brands (LB) several times ahead of its 50% dividend cut in late 2018.… Read more

“Hey Brett… you joined two partnerships last year?”

What? I didn’t. Or I thought I didn’t. In reality, I did–by buying shares in not one but two master limited partnerships (MLPs).

One of them was Enterprise Products Partners (EPD) and while I can’t recall the other, I can vividly the annoyed look on my accountant’s face like it was yesterday.

Master limited partnerships (MLPs) are required to issue you a K-1 package at the end of the tax year. These are generally headaches for the person who does your taxes (whether it’s you, or a professional).

That year my accountant calmly but sternly asked me to stop buying MLPs in my personal portfolio.… Read more

Most dividend investors understandably love the idea of an 8% No Withdrawal Portfolio. It’s a simple yet “game changing” idea that you don’t hear much from mainstream pundits and advisors.

Find stocks that pay 7%, 8% or more and you can retire comfortably, living off dividend checks while your initial capital stays intact (or even appreciates).

Now this strategy is a bit more complicated than simply finding 8% yields and buying them. Granted the recent stock market pullback has benefited investors like us because we can snag more dividends for our dollar. Yields are higher overall, and that’s a good thing.… Read more

Today, the 10-year Treasury pays just 2.4%. Put a million bucks in T-Bills and you’re banking $24,000 per year. Barely above poverty levels!

Hence the appeal of closed-end funds (CEFs), which often pay 8% or better. That’s the difference between a paltry minimum-wage income of $24,000 on a million saved or a respectable $80,000 annually.

And if you’re smart about your CEF purchases, you can even buy these funds at discounts and snare some price upside to boot!

The market’s fast run-up since January 1 has made cheap CEFs just a bit harder to find. And some CEFs have become so pricey that, if you hold them, you should consider selling before their premiums fall to earth.… Read more

The yield curve is now “inverted.” This warning has preceded “seven of four” recent bear markets (more on this in a moment). Time to be safe and sell everything?

Before we stash cash in the mattress, let’s review the actual facts. Fundamental Capital’s Troy Bombardia, one of my favorite historical finance quants, has run the numbers on what happens to the S&P 500 when the 10-year “long” yield dives below the three-month rate:

• In 1966, 1973, 2000 and 2006, an inverted yield curve indeed preceded a big stock market pullback (usually by a year or two).

• Meanwhile in 1978, 1980 and 1989 it didn’t mean much.