Author Archive: Brett Owens

Most income investors find their way to business development companies (BDCs) by screening or searching for big yields. And there’s no doubt these listed payouts do appear impressive! Here are the five largest BDCs (ranked by assets under management):

A first-level look at this table may have you wondering why anyone would buy MAIN when they could nearly double their dividend by choosing another ticker. Well, there’s a good reason that we’ll get to in a minute. First, let’s talk about what BDCs actually do so that we can understand what is driving these big dividends.

It all started in 1940, when Congress passed the Investment Company Act.… Read more

It’s a question I get from investors all the time: “Should I take my dividends in cash or reinvest them through a dividend reinvestment plan (DRIP)?”

My answer: unless you want your cash sitting in your account earning zero, your best bet is to reinvest any dividend money you don’t need to pay your bills.

But we don’t want to practice “buy and hope” investing, either, whether we do it through obsolete DRIPs or the old-fashioned way.

When I say “buy and hope,” I mean putting your cash into household names like the so-called Dividend Aristocrats and “hoping” for higher stock prices when you cash out in retirement.… Read more

If you’re worried that stocks are expensive again, well, they are. The current bull market is making a run at history. But it’s also costly to stay in cash (and lock in zero income). Fortunately, it’s possible to buy some downside protection with yield.

I understand the “I’m worried so I’m sitting in cash” concern. And I know many investors who continue to sit on their money and hope for a big pullback. But wouldn’t it be nicer to bank 32% total returns with 8%, 9% or even 10% or more of it coming as dividends?

Our Contrarian Income Report subscribers who smartly stayed with Omega Healthcare Investors (OHI) – a big paying REIT – have done much better than their scared cash hoarder friends, as well as the broader market in general.… Read more

“Hey Brett – is it time for us to sell MPW?”

Nothing makes subscribers more anxious to bank gains like a 105% winner! That’s what Medical Properties Trust (MPW) has delivered to us since we bought it in November 2015. Funny thing is, I’ve been getting questions about selling the stock since it was a mere double-digit gain for us. It’s a good thing we let this winner run!

Why We Let Our Winners Run

It’s especially important to let winners run when they are growing their dividend consistently. There’s rarely any reason to actually sell a stock if the company is consistently growing its profits and dishing them to shareholders.… Read more

If you’re hunting for income, your job just got a lot tougher, and it’s all the Federal Reserve’s fault! Fed Chair Jerome Powell’s recent cave-in on rate hikes means the central bank is out of action for the rest of 2019—and its next move could even be a cut.

Sure, this has been great for stock prices, which surged 8% since the new year. But it’s crushed dividend yields, leaving you with far fewer buys to get the 6%+ yields you need to retire on dividends alone.

Look at how this past month’s price gain has compressed the average S&P 500 stock’s yield from a pathetic 2.1% to a very pathetic 1.9%!… 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 safe 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

The last time we had this Fed setup, these safe 6%+ paying bonds jumped 20% in the year ahead!

The setup? The likelihood that short-term interest rates (as set by the Federal Reserve) will go nowhere over the next 12 months. To see this we’ll turn to the Fed funds futures, which are contracts that reflect real money being bet on the Fed’s upcoming action (or lack thereof). Collectively they comprise the smartest crystal ball available this side of Jay Powell.

Right now, the smart money is giving “no hike” a 75% probability between now and January 2020. And when we add in the bets on a rate cut or two, we’re looking at a 92% chance that rates will either be unchanged or lower this time next year:

Smart Money Bets 75% “No Hike” for 12 Months

This is bullish for – you’ll never guess – floating rate bond funds.… Read more

Wondering if it’s too late to jump on this market recovery? I have great news: it absolutely is not.

But you won’t reap the biggest gains by, say, putting cash into your typical S&P 500 name—or in a passive index fund like the SPDR S&P 500 ETF (SPY).

Because while rising corporate profits will likely propel the market higher this year, you’ll put yourself in a much better position by hitting out at the two sectors (and two specific buys) I’ll reveal now.

Both sectors will be on my personal list this year, and I’ll be recommending stocks from each one to members of my Contrarian Income Report service, too.… Read more

Money-losing firm India Globalization Capital (IGC) found the magic formula last October. They put two investing buzzwords side-by-side:

1. Cannabis, and
2. Blockchain.

The savvy marketers at IGC then introduced an energy drink infused with hemp, and wow, what a rush!

IGC Jumped 10-Fold on Buzzwords

We rational income investors fortunately avoided this circus. I wrote to you as the blockchain-weed craze was peaking:

We level-headed contrarians should stay away from this circus. In fact, you need to be honest with yourself about the latest weed craze. If you’re tempted at all to buy this junk, it’s better if you change the channel.… Read more

For those of you shaking your head at your portfolio’s low yield, you can actually 2X or 3X your portfolio’s yield and improve your upside potential to boot using this strategy. And it’s actually simpler than traditional stock picking.

Many income investors have mistakenly parked their capital in “safe” consumer staples like General Mills (GIS), Kimberly-Clark (KMB) and Procter & Gamble (PG) in search of yield and security. Their money was safe, all right: their cash went nowhere – straight sideways – for the last five years!

They’d have been better off “outsourcing” their dividend decisions to the great Mario Gabelli.… Read more