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Have four months of “dead money” ever caused this much drama?

Let’s put last week’s pullback in perspective. As uncomfortable as it may have been for investors who watch the market daily, it simply served as a public service reminder that most investors are probably better off not watching the market daily.

The result of one of the worst weeks in Wall Street history? A mere return to late October 2019 price levels:

Wall Street’s Tower of Terror

Typically, an erasure of four months’ worth of gains wouldn’t be a big deal. However, this stock market had been unusually bullish, gaining nearly 12% in less than four months.… Read more

During volatile times like these, the best thing to do is this: stay calm and keep collecting your dividends.

Fighting the urge to sell is critical, because doing so could slash your dividend income by 82% or more.

Here’s where I’m getting that number: let’s say you hold the stocks in our Contrarian Income Report portfolio, which yields an average of 7.2% as I write this. (If you bought a while back, you’re likely yielding more on your investment, thanks to our picks’ dividend growth, but let’s use 7.2% as our benchmark here.)

And let’s say you’ve got a reasonable nest egg—about $350K—invested.… Read more

What are we income-seekers to do after this latest pullback? Buy more? Sit on the sidelines?

It’s the question everyone’s asking. And while no one can predict the future, the past gives us some solid hints at what might be ahead, and the moves that make the most sense for our income portfolios (including a certain 7%-paying fund that’s more than worth your attention now).

To see what I’m getting at, let’s rewind to 2002. Then, like now, we were facing the potential of a pandemic: SARS in that case. There was other dreadful news, too: the dot-com bubble had just burst.… Read more

Should we use this dip to load up on dividend stocks?

It is always a good time to put high quality payers in our portfolio. Especially now, when their yields are noticeably higher than they were this time just last week.

However, please do note my emphasis on quality. “Junk dividends” are cheaper, too, but we should continue to steer clear of these. To show you what I mean, let’s pick on three money-losing stocks paying unreal high yields. I’m talking about 8.3% all the way up to 16 (per year, yes, you’re reading correctly.)

These particular yields, believe it or not, are likely to go even higher in the months ahead.… Read more

Flipping through my stock screener earlier this week, I ran across two of the best examples of bubbles-in-the-making I’ve ever seen:

Looking to Lose Money? Invest Here.

Those would be Tesla (TSLA), in blue above, and Virgin Galactic (SPCE), in orange.

Bubbles, of course, are nothing new: Nobel Prize–winning economist Robert Shiller explained them in his 2000 book, aptly titled Irrational Exuberance:

“Errors of human judgment can infect even the smartest people, thanks to overconfidence, lack of attention to details and excessive trust in the judgments of others, stemming from a failure to understand that others are not making independent judgments but are themselves following still others—the blind leading the blind.”… Read more

If you own any real estate investment trusts (REITs), make sure you forward this article along to your tax advisor!

Historically, REIT distributions have been considered nonqualified dividends by the IRS. This means they usually get taxed at your regular income tax rate.

However, REIT investors now benefit from the same tax break that “pass through” businesses receive. As a general rule, REIT investors are now allowed to deduct 20% of their REIT dividend income.

(This tax update is adapted from our new book How to Retire on Dividends: Earn a Safe 8%, Leave Your Principal Intact. You can grab your copy here.)… Read more

At my Contrarian Income Report service, we hunt down huge dividends on the regular. Right now, our portfolio is knocking out a 6.9% average payout from 16 real estate investment trusts (REITs), stocks and closed-end funds (CEFs).

We’ve grabbed serious price gains, too: since launch in 2015, CIR has delivered a 12.5% annualized return. Not bad for a set of “boring” income plays!

Beyond Big Yields

Even though our CIR club is “high yields only,” I get that many folks look to stocks with low (or no) dividends for gains, too: names like Apple (AAPL), whose 1% yield won’t get it within a mile of Contrarian Income Report.… Read more

A proven recession indicator just went off again—only nine months after its last warning. And how have the markets and the media responded?

Crickets.

The funny thing is that this isn’t a bad news story for us. Because there’s a way we can profit from this signal of tougher times to come. I know that sounds counterintuitive, but stick with me for a moment and I’ll introduce you to a fund that protects—and actually grows—its 6.6% income stream when markets panic.

Before we get to that, let’s look at that recession indicator and tease out what it’s telling us.… Read more

If you want to live off dividends in retirement, you can’t depend on “blue-chip stocks.” They simply haven’t paid enough yield for years:

Even High-Yield Savings Accounts Start to Look Good at These Levels

Source: Multpl.com

The S&P 500’s yield recently hit 1.7%. Think about it in “retirement spending” terms. If you took an entire million-dollar nest egg and put it in the S&P 500, you’d be looking at just $17,000 in dividend income per year. If you have even less to invest, like $500,000, that’s just $8,500 a year—several thousands of dollars below the U.S. Department of Health & Human Services’ poverty guideline of $12,760!… Read more

There’s a way you can buy into today’s healthy real estate market without paying full price. In fact, you can get in for a lot less—I’m talking 16% below market value.

This may sound impossible, but it’s easy to do with closed-end funds (CEFs). That’s because there’s a CEF that invests only in real estate, and its market price is actually 16% lower than the value of its portfolio of assets. There’s much more to this fund, too. Not only does it hold a diversified real estate portfolio, but it also pays out a 5.9% dividend that’s risen 73% in the last decade. … Read more