Articles

Real estate investment trusts (REITs) are on fire—and we need to be very careful not to get burned.

Yellow Light on Some (but not all) REITs

Look above and you’ll see what I mean—the Vanguard Real Estate ETF (VNQ), in blue, has topped the S&P 500 on price returns alone. That’s a monster run for income investments like REITs.

More REIT Gains to Come—But Be Cautious

Here’s the twist: there’s plenty more upside ahead—and you can thank the Fed for that. Its latest rate cuts will keep powering REITs higher, for two reasons:

1. Lower rates cut REITs’ borrowing costs, and these trusts (owners of everything from senior-care centers to cell towers) need lots of borrowed cash to buy new buildings and upgrade current ones.

It’s been a terrific year for one specific group of funds—and that means, if you’re one of many people who own them, you need to be very careful.

I’m talking about senior-loan (also known as floating-rate) funds, which have made big gains in 2019. That’s lulled many folks into a false sense of security, idly thinking these steady returns will roll in for the long term.

That’s a big mistake.

To see what I mean, look at the Invesco Senior Loan ETF (BKLN), which serves as something of an index for senior loans. It yields 5.2% and is up 7.3% in 2019.… Read more

I recently illustrated the dangers of trusting the Dividend Aristocrats to take care of your retirement needs. Their average yield of 2.4% is a fraction of what you’ll need to retire on dividend income alone, and their payout growth—while long-standing—isn’t rapid enough to get you where you need to be when it’s time to call it a career.

Now here’s another problem with even the highest-yielding Dividend Aristocrats. Stick with me as we solve it and tap into $4,424 in dividend cash each and every month.

Here’s a look at the income schedule for an investor who sinks $100,000 evenly into the five highest-yielding Dividend Aristocrats.… Read more

It’s a line you’ve no doubt heard before. It goes like this: “The market is too efficient to beat, so you may as well just park your cash in a low-cost index fund and call it a day.”

Nonsense! The truly ridiculous thing is, this myth is proven wrong every day—but investors just can’t quit it. And it’s costing them triple-digit returns (and 7%+ dividends) that could leave them well short of what they need to retire.

For proof that this market is far from efficient, just look at the one-day 22% drop in shares of Beyond Meat (BYND). That came after the company beat revenue expectations and its profits were twice what the market expected.… Read more

“Brett, give me some bond funds with big yields. And it’d be great if their prices never went down!”

My money manager friend was chasing the holy grail of retirement income. He wanted safe payouts from bonds to balance his clients’ stock exposure.

“How about the Artisan High Income Investor Fund (ARTFX)?” I replied. “It pays a steady 6% or so. And it never goes down.”

Up, Up, Up With Barely a Blip

“The only problem is that it doesn’t quite have double-digit yearly return potential. And that’s prevented me from recommending it to my Contrarian Income Report subscribers.”

Our CIR portfolio has returned 11.7% per year since inception.… Read more

Forget today’s pathetic Treasury rates. And forget the lousy payout on your typical S&P 500 name, too.

Put your nest egg in either and you’re locking in an income stream that’s actually less than zero for years to come!

I know that sounds crazy—I’ll get into precisely what I mean, and how it could jeopardize your golden years—shortly. Then I’ll show you my two-step dividend strategy (and four specific stocks and funds you can buy now).

Put all four of these picks together and you’ve got a perfect setup for these days of miserly yields, giving you gaudy 6.1%+ payouts today and an incredible 20%+ cash stream in short order!… Read more

I run across “buy and hope” investors all the time. You know the type: they latch on to a big-name stock, like Visa (V) or Berkshire Hathaway (BRK) and “hope” for big price gains.

Truth is, that’s their only option. With most big-cap stocks paying less than 2%, they’re sure not getting much in dividends!

Sad thing is, most people think this is the only way to invest. But there’s a better, safer approach. That’s what I’ll show you today.

It’s a simple investment that lets you buy the big-cap stocks you know well, but with two key differences: you’ll get a 9.2% dividend, so you’re getting much of your return in steady cash payouts …

… and you’ll be able to buy them for less than folks who pick them up individually, or through an index fund.… Read more

Dividend yields are so low today that dividend growth is actually becoming cool. Income investors are combing over “Dividend Aristocrats”–stocks that have raised their payouts for 25 straight years–in desperation to find any meaningful yield.

Problem is, these stocks are so popular and richly valued that they don’t pay much today. Nor will they yield much more tomorrow, even with yearly raises. Our princely picks pay less than 2% today, which is going to net you less than $20,000 on a million bucks.

Dividend Aristocrat Yields Head Towards Zero

The Dividend Aristocrats are the well-worn, oft-recommended dividend growers of the S&P 500.… Read more

It’s a statement we hear from readers a lot: “I’m worried about another 2008.”

I get it. After all, we’re all 11 years older and have that much less time to recover from a crash. So today we’re going to cut through the noise and look at whether there really is something to worry about here.

We’ll do it by comparing, point for point, what’s happening now to the run-up to the 2008 crash. I think you’ll be surprised by the results.

Let’s dive in.

This Happened in 2006—and Again Last March

We started hearing about the inverted yield curve—when yields on short-term Treasuries move higher than those on longer-term ones—seven months ago.… Read more

Our healthcare landlord Omega Healthcare Investors (OHI) is officially back. This 6% dividend has upside once again. We are about to receive our first payout raise since early 2018, which ends our seven-quarter drought in which the big dividend was paid but not raised.

I say “drought” partially in jest because OHI yielded a fat 10% when it froze its payout. The stock slipped on the news, but we discussed that a freeze isn’t the same as a cut, and OHI’s payout was well covered by its funds from operations (FFO).

Congratulations to you calculated contrarians who stuck with the pick.… Read more