Articles

Are These High-Yield CEF Deals Too Good to Be True?

Brett Owens, Chief Investment Strategist
Updated: August 14, 2020

If your dividend portfolio is like that of most investors I know, you’re probably getting paid quarterly. That’s too slow, especially for dividend payments that are most likely too low.

Why not up that frequency to a monthly payout, and increase the total yield while we’re at it?

The secret to monthly payouts that add up to 9.1%, 9.4% and even 10.8% yields per year is a simple three-letter acronym: C-E-F.

For whatever reason, closed-end funds (CEFs) don’t have nearly the following that popular dividend-paying stocks boast. This “secret” is one of the last great efficiencies in an otherwise tough-to-beat market.… Read more

This High-Yield REIT Could Be Amazon’s Next Landlord (yields 7.9%)

Michael Foster, Investment Strategist
Updated: August 13, 2020

We’ve just been handed a unique opportunity to grab 7.9%+ dividends—and price upside, too.

Now it does involve some risk, and you’ll have to be quick to reap the biggest gains (and dividends). But there’s one unsung fund that can help you cancel out that risk—and grab a huge payout, too. More on that at the end of this article.

A Contrarian High-Yield REIT Strategy for Huge Cash Payouts

First up, the opportunity we’re going to dive into today revolves around real estate investment trusts (REITs) that invest in shopping malls and other retail properties.

If you’ve been reading columns written by me and my colleague Brett Owens, you know we’ve been critical of retail REITs, which were being decimated by Amazon.comRead more

The Safest Dividends for a 10% Pullback

Brett Owens, Chief Investment Strategist
Updated: August 12, 2020

It’s August, it’s hot, we’re all still quasi-captives…and the collective love for stocks is getting downright steamy.

Investors have not felt this passionate about equities since January. That was, ominously, the last time the “Dumb Money” confidence level marched down from ebullient levels. Here’s a look at the “Smart/Dumb Money Confidence” chart produced by our friend Jason Goepfert at SentimenTrader (who was kind to let us republish here):

The Dumb Money is named so for a reason—it’s made up of the investors who are always late to the party. They pile in at market tops and bail at bottoms, while their “Smart Money” counterparts (fundamental-focused managers) take their lunch money.… Read more

How to Play the Presidential Election for 10.7% Dividends (and Upside)

Brett Owens, Chief Investment Strategist
Updated: August 11, 2020

What are we dividend investors to make of this presidential election? Are we supposed to buy now or wait to see what happens in November?

Before we get into that—and discuss a 10.7% dividend that’s very appealing preE-Day—there’s one thing we must do: set aside our personal politics and stay laser-focused on the investing angle here.

With that said, there are two things I see as likely no matter who wins this thing:

  • A post-election rally: According to Deutsche Bank global chief strategist Binky Chadha, stocks typically rally 5% from Election Day until the end of the year when an election is close, regardless of the result.
Read more

These 10 “Crisis-Proof” Funds Yield Up to 10% (with 17% upside)

Michael Foster, Investment Strategist
Updated: August 10, 2020

After watching the S&P 500 crash, then levitate, over the past seven months, I’ve come to one conclusion: high-yield closed-end funds (CEFs) are disrespected now—and that makes them a great contrarian buy.

Sure, some CEFs are cheap for a reason (I’m looking at you, energy funds). But there are plenty of undervalued winners, too. And plenty of CEFs have crushed the market this year, including 10 that have returned more than 8%. This top-10 list, which I’ll show you below, includes CEFs that have doubled, tripled—and even quadrupled the S&P 500’s 4% return.

What’s more, these funds all have one thing in common that sets them up for even bigger gains: strong management, proving once again that who manages your money is just as important as what you invest in—especially if you’re looking to boost your portfolio’s income stream with the 7% (or higher) dividends the typical CEF throws off.… Read more

31 Stocks That Could Be Dividend Heroes By October

Brett Owens, Chief Investment Strategist
Updated: August 7, 2020

These 31 dividends are more than just safe. They are likely going up between now and October!

Recently, S&P Dow Jones Indices’ Howard Silverblatt put a hard number on 2020’s tough dividend decay, writing that second-quarter payouts were whittled down by $42.5 billion during the second quarter. The worst might now be over. Here’s a key excerpt from Silverblatt’s latest note about the month of July (emphasis mine):

“There were significantly fewer dividend actions, as 15 issues increased their dividend rates, one issue initiated dividends, two decreased them (including Wells Fargo’s USD 6.8 billion cut, the second-largest in index history), and one suspended them.Read more

8% Dividends, 10%+ Upside and a Tax-Cutting Strategy You Won’t Believe

Michael Foster, Investment Strategist
Updated: August 6, 2020

A lot of closed-end fund (CEF) investors—particularly new ones—wonder how CEFs can sustain huge 8% dividends in a 2% (if we’re lucky!) world.

It’s actually pretty easy. Below we’ll look at three ways CEFs make these retirement-changing payouts happen. And, in response to a question I’m hearing a lot from CEF Insider subscribers these days, we’re going to zero in on one particularly sticky subject: return of capital (ROC).

Contrary to what many people think, ROC isn’t a fund simply handing your cash back to you—and charging a fee for doing so. It’s actually a dividend-investor’s dream! Let’s set up our deep dive into ROC with a snapshot of how easy it can be for CEFs to hand us those rich 8%+ dividends.… Read more

Trade-In Lame 0.5% Bonds for Secure Yields Up to 7.5%

Brett Owens, Chief Investment Strategist
Updated: August 5, 2020

Historically speaking, it’s best to avoid bonds when your central bank is printing money like crazy. More cash can lead to inflation, which can lead to higher interest rates—and put a damper on any fixed-rate holdings.

But not all bonds are bad ideas. Some have their coupons tick higher with rates. Others can even provide you with the upside of a stock! Let’s review US-centric fixed income, starting with the “outhouse” and working our way up to the “penthouse” quality bonds paying as much as 8% today.

US Treasuries: For 0.5%, Why?

Ten-year Treasuries pay just 0.5% or so as I write.… Read more

Swap Your “Dead Money” ETFs for These 7%+ Payouts

Brett Owens, Chief Investment Strategist
Updated: August 4, 2020

I don’t know why you’d try to cobble together an income stream with miserly ETFs when there are plenty of closed-end funds (CEFs) trading at big discounts, even after the huge market rebound we’ve seen since March.

What’s more, many of these CEFs are throwing off life-changing 7%+ payouts!

Why are we seeing some great deals in CEFs now? Because the folks who invest in these funds tend to be slower to react to events than the jumpy crowd holding the typical S&P 500 stock. That lag gives us a nice opportunity to buy while these funds’ prices are still deeply discounted from the value of the assets in their portfolios (a figure known as the net asset value, or NAV).… Read more

5 Funds That Pay $2,375 a Month on a $300K Portfolio (forever)

Michael Foster, Investment Strategist
Updated: August 3, 2020

I’m going to show you a dividend portfolio that gets you an incredible 9.5% payout—and you won’t have to take on stomach-churning risk (which, let’s face it, no one’s keen on doing now) to get it.

Imagine what a 9.5% dividend could mean. Take a $300,000 portfolio and you’ve suddenly got $2,375 in passive monthly income. A million bucks? You’re talking about almost $8,000 a month—miles ahead of the $1,500 a month you’d get if you just put it in an S&P 500 index fund.

Here’s the kicker: the investments in this five-fund portfolio, all closed-end funds (CEFs), invest in the same companies that make up the S&P 500.… Read more