Author Archive: Michael Foster

Here at Contrarian Outlook, we’ve been talking a lot about crypto lately—but not in the way you might think.

We’re not buyers—far from it! Instead, we’re using a savvy, dividend-focused strategy to set ourselves up for some nice gains (and dividend payouts!) as gamblers flee crypto and speculative tech stocks. (I’ll spotlight two closed-end funds that are aligned to scoop up our “crypto refugees” while handing us dividends yielding up to 11% in just a moment.)

I’m reminded of crypto right now because many of these “coins” have fallen hard recently—and last week, we got word of one that went essentially to zero!… Read more

With all the panic over the headlines these days, it’s a good time for us contrarians to step back and take stock—because there are high-yield bargains out there that can help us navigate this mess.

(Hint: the best hunting ground for us contrarians today is in a group of roughly 500 funds called closed-end funds, or CEFs, many of which pay 8%+ yields and trade at ridiculous discounts. More on them, and a 9.9%-paying fund that might be a good fit for you if you’re investing for the long term, in a moment.)

First, if you’re feeling nervous about your portfolio, let’s step back a bit.… Read more

This wild economy has set us up with an opportunity to smartly “time” both the real estate and stock markets—and grab ourselves a hefty 9.9% dividend along the way.

I’ll show you a ticker we can use to do it in a moment. But first, let’s talk about the stock/real estate “two step” I’m proposing—starting with the state of play in the housing market, which has changed a lot in the last few weeks.

House Prices Look to Be Peaking

It comes as a surprise to no one that house prices are on a tear these days, hitting an average of $500,000, according to the latest numbers:

When most Americans buy their primary residence, they aren’t primarily focused on the sticker price; their monthly mortgage cost is what they’re really looking at.… Read more

Most investors I speak to have no idea how much they’ll need to retire (and with the uncertainty we’re facing today, that’s totally understandable!).

So let’s talk about that—and focus on closed-end funds (CEF), totally overlooked investments that could let you retire on dividends alone, possibly on as little as $325K. That’s the ultimate way to get peace of mind these days, because you don’t have to worry about selling into a pullback to keep your income stream intact.

The Income Side

When calculating how much you’ll need to clock out of the workforce, you really only need to know three things:

1. How much you’ll spend in your first year of retirement.

Let’s talk about last Friday’s market crash and the wobbly markets we’ve seen since. Because at times like this, our closed-end fund (CEF) dividends are a key tool to help see us through.

As seasoned CEF investors know the standout strength of these 500 or so funds is their high payouts, which yield around 7%, on average today. Payouts like those can tide us over until we get to the other side of a market meltdown.

So what’s our strategy? In CEF Insider, as with all of our Contrarian Outlook premium newsletters, we’re staying light on our feet, ready to sell struggling holdings quickly, and to pick up bargain-priced dividend payers when they appear.… Read more

Today I want to show you how to do the unthinkable and retire in seven years—starting with a $0 nest egg. Our plan hinges on two things: being frugal and investing in closed-end funds (CEFs), which throw off big, steady dividends on the regular.

I know a plan like this sounds impossible. Stocks, after all, are testing 52-week lows; the Fed is quickly raising interest rates; inflation is still on a tear; and a war is raging in eastern Europe.

To be sure, these things are all weighing on the markets now. But there is one great thing about investing these days, and it’s on the income side of things.… Read more

This selloff has gone on seemingly forever, and I’m hearing from more investors who are feeling nervous.

I understand completely. Days of red on the indexes are tough on all of us, myself first and foremost. But the key thing to keep in mind as the world seems to be spinning out of control is that when times like these come along, our CEF strategy proves its worth, for two reasons:

• Our CEF dividends are helping us through the correction, as they have for all the pullbacks we’ve been through since we launched my CEF Insider service in 2017. Our portfolio yields 8.3% today, and 17 of our 23 holdings pay dividends monthly, so those payouts arrive in line with your bills.

When we’re faced with a situation like today’s, with inflation and interest rates on a tear, we want dividends that keep us ahead of rising prices while hedging us against volatility.

Luckily, there’s a selection of high-yield closed-end funds (CEFs) that do just that. We’re going to look at three that yield 9.9% on average today, plus they give us the diversification we need to withstand market shocks.

And with a 9.9% yield, you could use these stout income generators to pay your bills on a modest investment, avoiding the need to sell into a downturn to augment your income. Heck, a retiree with $500K could generate $4,125 a month in dividends!… Read more

Let’s test the common “wisdom” that a double-digit dividend is unsustainable. The closed-end fund (CEF) we’re going to discuss today turns that notion on its head!

I’m talking about the PIMCO Dynamic Income Fund (PDI), which, as it says in the name, is run by boutique CEF house PIMCO.

We all know that investors (and consumers in general) love a brand name, and that holds true with CEFs, too: due to the prestige associated with PIMCO’s moniker, its funds usually trade at huge premiums to net asset value (NAV).

Well, to be fair, it’s not just the company’s name that’s behind these premiums.… Read more

If you’ve sat out oil stocks until now, it’s easy to think you missed the boat. After all, oil’s big run has sent shares of producers (and pipeline operators) soaring. That’s meant lower dividend yields—and higher valuations—for folks who decide to tiptoe in now.

But there’s a way we can “turn back the clock” and squeeze 8.1%, 8.7% and even 8.9% dividends out of energy stocks. (These are the actual yields on three overlooked funds I’ll show you in a moment.)

Those are the kinds of yields you could only get back in April 2020, in the teeth of the COVID crisis, when oil stocks were on their backs, their depressed prices sending their yields soaring.… Read more