Articles

If you’ve read my articles in the last few weeks, you may have noticed I’ve been writing about inflation more lately. I’m doing so because your income portfolios—especially your bonds!—are at risk as a result of recent money printing.

My recent monetary focus has taken many readers by surprise. After all, we haven’t seen sustained inflation in 40 years. Nothing like a four-decade lull to lure an investor into a false sense of “60/40 retirement portfolio” security!

But even though we’re staring at day-to-day deflation right now, with lockdowns hitting demand for most products beyond the essentials, make no mistake: the ingredients for inflation are there.… Read more

This crisis has hit income-seekers—particularly retirees—hard. After the stomach-churning March selloff came the slashing of “sacred cow” dividends, like those of senior-care providers Ventas (VTR) and Welltower (WELL).

Look to Closed-End Funds for Retirement Income

It’s understandable (and healthy!) if the past few months have made you extra cautious when picking dividend stocks. The good news on the dividend front is that you can still find plenty of high, safe payouts in my favorite corner of the high-yield market: closed-end funds (CEFs).

CEFs are a great pick for retirement income today, for three reasons. First, they still give you access to large-cap stocks you know well: mainstays like Visa (V), Apple (AAPL) and Johnson & Johnson (JNJ) feature in many equity-CEF portfolios.… Read more

Let’s keep our heads and our dividends above water in this crazy year that is 2020. Most income investors know that it’s been brutal for dividends. But do you know how horrific it’s actually been?

Our pal Howard Silverblatt of S&P Dow Jones Indices has slapped an official number on it:

$42.5 billion.

That’s how much cash U.S. stocks cut or suspended their dividends by in the second quarter alone. We haven’t seen pay cuts this steep since Q1 2009, when investors received $43.8 billion less in cash distributions than the year prior.

This wasn’t just a couple of large dividend programs tanking, either.… Read more

With the S&P 500 yielding just 1.8%, and 10-Year Treasuries paying a pathetic 0.7%, many folks are getting desperate for income—and they’re falling for dangerous dividends like exchange-traded notes (ETNs).

Note I said “ETN” here, and not “ETF.” It’s a critical distinction—and overlooking it could cost you a fortune in gains and dividends.

A Crippling 70% Loss

To see how dangerous ETNs can be, consider the (now defunct) UBS Etracs Monthly Pay 2x Leveraged Closed-End ETN (CEFL), which I first warned readers about in October 2017. CEFL went on to be crushed by the S&P 500 from that first warning until the start of 2020.… Read more

Fed chair Jay Powell is our kind of income investor. He’s allocated up to $750 billion to buy individual corporate bonds. Perhaps Jay is sick of being told what to do, because he (like us!) is clearly on a mission to help his central bank retire comfortably on dividends.

He realizes that US Treasuries don’t have the oomph he needs. As I write, the 10-year bond pays less than 0.7%. If Jay had tossed his $750 “billies” into T-Bonds, they wouldn’t even net him a “lame” $5 billion annually.

Instead, our man hired investment firm BlackRock to buy ETFs like the iShares iBoxx High Yield Corporate Bond ETF (HYG).… Read more

It really is possible to find stocks that grow your money 15%+ a year forever—even in the middle of a pandemic.

Better still, these “unicorns” are a cinch to find. We only need to look for one thing: a dividend that’s growing—and ideally accelerating.

I know that sounds like a tall order, with S&P 500 payouts plunging $42.5 billion in the second quarter. But that figure masks the fact that many companies are still hiking their payouts—and will continue to, even if this crisis drags on longer than we expect.

Dividend Growth = Share-Price Growth

Of course, it’s not good enough to simply pick a few stocks with fast payout growth and call it a day.… Read more

The way most folks invest, they’ll need way more than a million bucks to retire—in fact, they’ll need almost double that!

No wonder so many people throw up their hands and commit to working till they’re 100. Maybe you’re one of these frustrated souls. With the world in the state it’s in today, I can’t blame you.

But what if I told you that you could retire on a lot less? Like 75% less.

That’s right: a fully paid-for retirement on just a $437,500 nest egg. Save up that much and you can look forward to a steady $35,000 in dividends (which is right around the average personal income in the US) year in and year out.… Read more

Lockdowns have been tough on real estate investment trusts (REITs). When April 1 hit, the rent stopped getting paid across the world. That’s of course bad for landlords and, in turn, REITs and their investors.

Now it hasn’t been all bad since then. Sure, old school retail and shopping malls are done—but we knew that already.

Check this out—it’s the rent collected by the REIT sector for April, May and June. All of our newly completed “shutdown” and “re-opening” and “just kidding, we’re closing again” months. Would you believe that apartment landlords collected 97.5% of their typical rents in June?

(Source: Nareit)

Yes you read that right.… Read more

It’s no secret why most people buy closed-end funds (CEFs): big dividends!

The 500 or so CEFs out there yield a game-changing 7%, on average. And with CEFs coming from all corners of the economy, you can easily build a nice, diversified CEF portfolio paying enough dividend cash to let you retire on $500,000 (or less!).

If you’re a reader of my CEF Insider service, none of this will surprise you. The service’s portfolio boasts funds yielding all the way up to 12.9%.

CEF Investors an Emotional Group

But there is one thing you should know about the CEF market: investors who buy CEFs are a bit twitchy, meaning they can sometimes oversell in a crisis.… Read more

Almost One-Third of NYC Restaurants Missed June Rent, Survey Finds

Scan the business headlines (and let’s be honest, who actually reads anymore?) and we’ll see ominous headlines like this. Makes us wonder who would want to be a landlord in this economy?

It’s not just NYC. Here in California, most restaurants are, once again, not allowed to offer indoor dining. Epidemiology arguments aside, our beat here is money, and how many restaurants are supposed to make money right now I do not know.

If they’re not making money, who knows if they’re paying the rent. Taking that a step further, we might also question who wants to own any real estate investment trusts (REITs)?… Read more