Articles

“Don’t you own that, B.O.?”

Go figure. While some people are thought of for their jokes, their hobbies or their families, a reader thought of me when they read about a Vanguard fund underperforming of late.

The poor ol’ Vanguard Dividend Growth Fund (VDIGX). Longtime readers know I’ve yapped about this before. While I rarely mention (let alone endorse!) mutual funds, VDIGX is notable for two reasons:

• I plow 100% of my 401(K) contributions into this fund, and

• It’s a pretty good option as far as retirement plans go.

Why this fund? Because in my “Brett Inc.” company plan, I have a set list of Vanguard funds to choose from.… Read more

We need to talk about SPACs, the popular kids of the investment world over the last year, because they could play a bigger role in our portfolios—and even our dividend income—in the future.

Few people associate SPACs (or special purpose acquisition companies) with dividends. That’s because these so-called “blank check” firms are all about growth: they’re set up and pushed through an IPO simply as a pile of money that’s been pooled by investors. Then, post-IPO, their managers purchase an existing private company (with many SPACs focusing on the tech space). By doing so, the newly acquired firm immediately becomes public, since the SPAC is already a public entity.… Read more

Corn Prices Hit 7-Year Highs

What a headline!

Mr. and Ms. Market could handle a spiking M2. They could turn a blind eye to higher 10-year yields. But now, JP has really backed himself into a corner. Fed Chair Jay Powell has lit a fire under corn prices, of all things:

That Ain’t Crypto—That’s Corn

“This is how inflation starts,” the pundits say. Higher commodity prices drive the Producer Price Index (PPI) up. Consumers (you and I) pay more at the grocery store, and this is reflected in a jump in the CPI (Consumer Price Index).

And the CPI, of course, is the inflation calculator used by the government.… Read more

Don’t let anyone tell you otherwise: financial stocks are still a hotbed of dividend (and share-price!) growth for contrarian income-seekers like us.

I know what you’re going to say next: “Brett, everyone says finance stocks are overbought.”

I get it, and that sounds logical … on the surface. 

It is true that when the calendar flipped to January, finance stocks surged, more than doubling the price gains of the S&P 500, going by the performance of the benchmark Financial Select Sector SPDR ETF (XLF):

Finance Stocks on a Tear …

But here’s what most folks have missed: even with that gain, finance stocks are only 20% above where they peaked prior to the last financial crisis 14 years ago.… Read more

Don’t listen to the naysayers—tech stocks are set to thrive in the coming months, and the sector is still a great place for us to go hunting for big, and growing, dividends.

Here’s one reason why: despite worries about rising interest rates, the Federal Reserve is likely to keep its key lending rate near zero. That, in turn, means businesses, and especially innovative tech players, will continue to have access to cheap money to invest in new products. 

This low-rate world also means investors starved for income will crowd into any higher-paying investments they can spot (including high-paying tech funds like the one we’ll discuss below).… Read more

Exchange-traded funds (ETFs) sure are easy to buy. There’s an ETF for just about anything we can think of—stocks, bonds, commodities, growth, value, sectors, industries and, of course, high yield.

Dividends are our beat here at Contrarian Outlook. And ETFs keep us busy, because for every income investing angle, there is a popular dividend fund that we can easily improve upon.

I commend you for realizing that ETFs are not the final retirement solution. Convenient, yes. But we contrarians have more effective income tools available than ETFs.

Let’s walk through seven popular dividend ETFs (yielding a mouthwatering 5% to 10%), and tinker with each a bit to improve their future performance and their payouts.… Read more

Three of the most successful closed-end funds (CEFs) in history have done something unprecedented—both for the funds themselves and the company that manages them. They merged.

PIMCO is arguably the most successful CEF manager around, and investors know it: they’ve bid up almost all the company’s funds to premiums to net asset value, or NAV (in other words, their market prices are higher than the per-share value of their portfolios). 

The company has always kept its funds separate, even though they have many similarities, so it came as a surprise when it announced that its PIMCO Dynamic Credit and Mortgage Fund (PCI), PIMCO Dynamic Income Fund (PDI) and PIMCO Income Opportunities Fund (PKO) would be merged into the same fund.… Read more

Everyone wants to be a contrarian investor. But in practice, most people buy more near tops and sell shares low.

Our human nature becomes tricky during times like these. Markets are ticking near all-time highs and many investors fear “missing out” on the next leg higher.

If you’re a premium subscriber of mine, your portfolio should be in good shape. It’s mostly to fully invested and has had a great run over the past twelve months.

But—you may have some spare cash that you’re staring at. Or dividends waiting to be reinvested.

Should we buy now? Or wait (hope) for a pullback?… Read more

Let’s cut the Fed-babble and call things how they really are. Because what happened last week means a lot for our dividends—and whether we’ll be able to count on them in the future.

(In a moment, we’ll hit up three stocks that are perfect buys in today’s “Fed-driven” economy—they pay dividends up to four times bigger than those of the S&P 500.)

Last week we learned that:

• The economy is roaring, with GDP up 6.4% in March from a year ago—that’s the kind of number you expect from a developing country like Vietnam, not the world’s biggest economy, yet …

• The Fed’s money printer will STILL go “Brrrrrrr…” Jay Powell made no bones about it after last Wednesday’s Fed meeting: his massive bond purchases and zero-point-nothing interest rates are here to stay.

There’s a “retirement shortcut” far too many people ignore—and it could let you hang ’em up a lot sooner than you think (and with a lot more income, too).

Retirement Investing: Most People Go Wrong at Step 1

When it comes to retirement investing, most folks lean heavily on dividend-paying S&P 500 stocks, particularly those with above-average dividend yields. And if you don’t want to manage a blue-chip stock portfolio on your own, no problem: Wall Street has you covered with the many ETFs it offers.

But this is the wrong route for a number of reasons—the main one being lame dividends!… Read more