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There’s an opportunity unfolding for us in one corner of the closed-end fund (CEF) market, and we can tap it for 7.5% dividends and price upside, too.

That opportunity is in CEFs that hold preferred shares. And it includes a CEF called the John Hancock Preferred Income Fund II (HPF), which not only pays a 7.5% dividend but is positioned to grow its payout. So every $100,000 you put into HPF gets you $625 a month in income, versus $119 a month you’d get from the typical S&P 500 stock. And that’s just to start.

If you’re unfamiliar with preferreds, they’re like the common stocks most people buy except they pay higher dividends (preferreds typically pay 4% or more, versus the average sub-2% yield on common stocks).… Read more

Thanks to two stock market pullbacks in 2020 and this current pause to begin 2021, equity prices are likely still “catching up” with their pre-2020 trajectories. Big tech is frothy but many lesser-known dividend growers are still cheap. And that’s music to my ears, because the surest, safest way for us to double our money in the stock market is to buy the payouts that are growing the fastest.

Specifically, I’ve got my eye on 8 that are boosting their dividends by 23% per year. Twenty-three percent!

Before I reveal the list, some caveats. First, past dividend growth does not guarantee future payout hikes.… Read more

Don’t listen to the pundits who say you’ve missed your chance to buy the dip in tech stocks. There are still deals on the table—and I’ve got a way for you to grab a slice of the gains to come while pocketing a 5.6% dividend that’s growing.

That way leads straight through a high-yield closed-end fund (CEF) we’ll dive into in a second.

CEFs have long been my go-to for tech investing, mainly because, even in a rising market like this one, you can still get dividends of 5%+ from tech CEFs—payouts you’d be very hard-pressed to get by buying tech stocks “direct.”… Read more

Thank you to our 1,578 Contrarian Income Report subscribers who attended our Q1 webcast last week! We received 114 questions during our one-hour call, plus several dozen more beforehand. Amazing.

Thank you for the thoughtful questions. I’ve read each and every one. Let’s chat about popular closed-end fund (CEF) topics today. (Next week, we’ll circle back with your equity-focused dividend questions.)

Q: Brett, what are your thoughts about Calamos Convertible Funds (such as CCD, CHI and CHY), which are currently yielding about 8%? Thank you.

Convertible bonds are a big beneficiary of Jay Powell’s money printing activity. Convertibles pay regular interest.… Read more

Most people don’t realize it, but there are 500 funds out there paying massive dividends: I’m talking rich 7% payouts on average.

That’s five times more than index funds pay! And many of these 500 criminally overlooked funds clobber their benchmarks, too.

I’m talking about closed-end funds (CEFs), which are run by real human beings, not algorithms. And despite what most advisors will tell you, the stock-pickers running CEFs beat the market on the regular.

To see what I mean, consider two CEFs: the  Duff & Phelps Utility & Infrastructure Fund (DPG), which holds utility stocks  like NextEra Energy (NEE) and Dominion Energy (D), and the Tekla Healthcare Opportunities Fund (THQ), holder of major drug firms like Johnson & Johnson (JNJ) and Abbott Laboratories (ABT).… Read more

If you’re not one to invest through individual stocks, a fund is the way to go. And if you invest in one totally overlooked type of fund, you can get the best of all worlds: diversification, the profit-making power only the stock market can provide—and a 7% dividend, too!

1-Click Diversification

With a fund, you get part ownership in the stocks the fund holds. And if you buy a broad-based fund like the Vanguard S&P 500 ETF (VOO) or the SPDR S&P 500 ETF (SPY), you get ownership of hundreds of companies at once. These funds’ diversity helps protect and grow your wealth, as history shows us.… Read more

As we Americans reemerge from our homes, select “return to normal” dividend payers are poised to deliver big gains. I’m talking about upside of 40% in addition to their 4% to 10% current yields.

But aren’t recovery stocks already expensive? We recently discussed how Americans aren’t exactly sleeping on the American vacation. The Invesco Dynamic Leisure and Entertainment ETF (PEJ), which includes restaurants, hotels, casinos and more, has gone skyward of late—and it’s not alone.

A quick look at some of the best ETFs over the past three months shows where investors believe the reopening money is heading:

Unfortunately for income investors, these industries tend not to pay dividends.… Read more

Let’s talk about inflation for a moment, because worries over rising prices are boiling over, and we contrarians can work them to our advantage.

If you’ve been watching the markets—and I’m guessing you have—you know that the rising 10-year Treasury yield, and the specter of inflation it brings, has weighed on stocks—particularly tech stocks.

Inflation Worries Weigh on Tech

As you can see, the tech-heavy NASDAQ, which outperforms the S&P 500 over just about any timeline, has fallen well behind in 2021 as of this writing. Meantime, Treasury rates continue their climb.

Inflation Pressures Rise

Here’s where the story gets interesting, because normally inflation fears trigger a rush into gold—but that’s just not happening this time.… Read more

What a time to be alive! The stock market is booming, and many of our favorite income investments are ticking higher every day.

Sure, we need to credit all of the money that our intrepid Fed chair Jay Powell has printed in the last year. But with the 10-year rate spiking, we now need to ask ourselves:

Is inflation here already?

Recently, I noted that Fed Chair Jay Powell was doing quite the impression of the infamous 1700s economist John Law, who was the original money printer. (And noted gambler, womanizer, speculator, and creator of multiple manias that included the Mississippi Bubble and South Sea Bubble.… Read more

Tech stocks have finally taken a breather—and we’re going to pounce on this dip—and grab a rare “double discount” while we’re at it.

The strategy we’re going to use also lets us “squeeze” the biggest tech names for payouts that are unheard of in the sector—I’m talking yields up to 6.3%.

Mom’s Coupon-Clipping Goes High-Tech

This approach is an ode to my mom who, to this day, refuses to pay the sticker price. If there’s a coupon to be found, she’ll find it and find another coupon to secure a double discount—even if it requires management approval to apply!

The dividend equivalent of the back-to-back coupon is buying discounted closed-end funds (CEFs) after a pullback, and that’s exactly the setup we’ve got in tech now.… Read more