Author Archive: Michael Foster

If you’re like most income investors, you stop in your tracks when you spot a massive payout—like 16% or more. A yield like that means you’re doubling the market’s historical annual return in dividends alone.

What’s not to like?

Too bad dividends that big are almost always warning signs. That’s the case with the two stocks we’re going to dive into today. You’ll want to avoid their “siren song” 16%+ payouts now—or sell if they’re taking up space in your portfolio.

When the Market and Reality Part Ways

This story actually starts more than a decade ago—in the middle of the collapse of 2008.… Read more

It’s a tired piece of “wisdom” you hear from personal-finance gurus over and over: you need to invest in low-cost, passive index funds to get the highest return.

Too bad it’s completely false!

Today we’re going to look at how obsessing over fees can actually cost you tens of thousands of dollars. Then I’ll name a fund that could get you big gains and pays a dividend north of 6%. What’s more, this unusual fund, a closed-end fund (CEF), to be specific, gives you that steady cash payout while holding some of the biggest stocks out there—I’m talking about household tech names like Apple (AAPL) and Amazon.com… Read more

You’ve probably heard that less than half of active funds beat their index, and a low-cost index fund is your best bet for long-term investing.

Well, today I want to show you why that is 100% wrong. I’ll also reveal 15 funds paying dividends from 5.6% to 7%, while crushing their index, too.

First, the facts.

When it comes to mutual funds, it’s true that the vast majority of them do not beat their indexes. It’s also true that most funds of all types that invest in common stocks don’t beat their index.

But there’s more to investing than stocks. Much more.… Read more

There’s a dangerous myth going around: that stocks are in a bubble, and if you buy now, you’ll lose money.

This myth is dangerous because it is discouraging people from putting money in one of the most powerful wealth-generating machines on earth. And income-seekers (retirees, in particular) who know how to navigate this market can not only get massive profits but also strong cash flow, like the 6% dividends, paid monthly, on a fund I’ll introduce you to shortly. This fund is worth your while because it’s a play on US stocks at a time when stocks are strong and getting stronger, and because it’ll get you those stocks at an 8.6% discount, too.… Read more

Americans are blessed with a source of high passive income that is entirely tax free. Thanks to long-standing legislation designed to encourage more investment in our communities, municipal bonds give tax-free income to most people, and since you can get these “munis” in a fund that pays out 4.7% dividends, getting a really high income stream without the tax burdens has gotten really easy.

But not everyone is celebrating.

A lot of fears about muni bonds have blanketed the financial press over the last few years, in no small part because muni bonds, with their low volatility and steady income streams, tend to appeal to investors who want to avoid risky assets the most.… Read more

One of the weirdest trends over the last year has gone largely unreported. Despite stocks surging 30% in a year, investors are still selling stocks more than they’re buying.

It’s hard to get your head around this fact, but the data says it’s true. According to data from Refinitiv Lipper, investors actually withdrew $192.3 billion from mutual funds and ETFs—the largest amount of outflows on record for a single year.

Stocks Soar—and Investors Sell?

The concept here is a little complicated, but it’s crucial to understand. An ETF or mutual fund pools together cash from its investors, which it then uses to buy stocks, bonds or whatever its mandate says it needs to buy.… Read more

The latest trade-war hype has served up a terrific opportunity for us to bag 6%+ dividends (and upside) in closed-end funds (CEFs).

Today I’m going to show you exactly where to look (hint: it’s the last place you’d expect) and reveal a CEF with serious upside in 2020. It’s set to ride this unheralded opportunity while dropping its generous 6.5%+ dividends on us.

First off, I hope your nest egg didn’t fall into this “tariff trap”:

First Shot in Trade War Takes Out Investors

That’s what the market did when President Trump announced his first tariffs on China two years ago, on solar panels and washing machines.… Read more

It’s the No. 1 retirement question: how much income do you need to quit the 9 to 5?

Today I’m going to help you find your number.

The best place to start is by asking yourself how your post-retirement lifestyle goal stacks up that of the average working American. Do you want to live lavishly or closer to the middle class?

Once you’ve answered that question, the next step is to look to this number: $33,706.

Average American Incomes

According to the Federal Reserve, that’s the average income an American worker earns, and it gives us a handy jumping-off point. This figure has been rising lately, but has stayed stable over the long haul.… Read more

Today I’m going to show you how one lucky group of investors nailed a once-in-a-lifetime shot at a huge, tax-free dividend stream and a quick 18% gain, too!

Well, not exactly “once-in-a-lifetime.” Because this opportunity is still waiting for you today—you just need to know how to tap it.

In a moment, I’ll give you the goods (including a name and ticker) on a closed-end fund (CEF) to target now. It hands you a 4.2% dividend you likely won’t have to pay a penny of federal tax on (and your payout could be exempt from state taxes, as well). 

To cut to the chase, thanks to its lucrative tax breaks, this fund’s 4.2% payout could be worth 7% or more to you today, depending on your tax bracket.… Read more

Today we’re going to talk about the biggest threat to your portfolio (and dividends!) you face in 2020.

It’s not a recession. It’s a near-irresistible human impulse—purposely amped up by the financial press—that could lock in big losses for you, or cause you to miss out on a huge gain, like the 486%+ some investors left on the table.

Let’s talk about that now. It starts with all the doom-and-gloom stories you’ve likely read about a looming market crash lately. (They’re hard to miss: you can find at least one on most major news sites every day.)

First off, don’t believe the hype: truth is, there’s a lot of data saying we aren’t anywhere near a downtick, let alone a full-blown once-in-a-lifetime collapse.… Read more