Articles

Look, rate cuts are only weeks away now—likely starting in September. And there’s one terrific way to tap them: high-yielding municipal bonds!

I know most folks think “munis”—issued by state and local governments to fund infrastructure projects—are boring.

It is, frankly, a ridiculous opinion. Tell me what’s “boring” about an investment that kicks out a 7.7% tax-free dividend!

To be sure, there are a couple quibbles you might have with munis.

For one, they’re tough to buy individually. But that’s really not a problem: ETFs offer one way in, but a much better way—and the only road to 7.7%+ dividends—is through closed-end funds (CEFs) like the three we’ll break down in just a second.… Read more

In last Thursday’s article, we talked about one of my favorite “low-drama,” high-paying investments—I’m talking 7%+ payouts here.

Those would be covered-call funds, which we look to in times of higher market volatility, which we’ve seen recently and I see as more likely as we move toward year end. At times like these, covered-call funds are a good option, as their option strategy cuts their volatility and boosts their income. Check out that article for our full breakdown of how this works.

Today we’re going to go one step further and delve into how these funds fit into your portfolio. We’ll also talk tickers.… Read more

Worried about a serious pullback in the S&P 500?

That something is going to go a bit haywire here in America, or overseas, and send stocks swooning?

If so, this 5-stock portfolio is for you. It yields up to 7.3% and it is built to withstand Armageddon.

No, really. These “low beta” payers can really lower our blood pressure. (Hold my beetroot juice!)

We blunt the bears with big dividends and small betas. Beta is a measure of an investment’s volatility against a benchmark.

If a stock has a beta of 1, it means it’s every bit as volatile as “the market.”… Read more

We’ve seen more choppiness in the markets in the last couple of weeks. That once again highlights why we should—dare I say need to—own one of the lowest-volatility, highest-paying investments I know of.

I’m talking about closed-end funds (CEFs) that sell call options on their portfolios. I know that sounds a bit out there (maybe even risky to some folks!) but it’s anything but. These terrific income plays give us exposure to stocks, like any ETF, but with less volatility and more income!

I mean, really, who doesn’t want that? Let’s dive into our options here.

Covered-Call Funds Give Us Stocks With Less Drama (and High Income)

Imagine a fund that holds all the S&P 500 stocks, but with a twist: This fund gets paid by investors who would love to buy its shares in the future.… Read more

Google is in trouble. The stock market is beginning to sniff that out.

As an income investor, you may think that you don’t care. But you probably should. We all need to take note, because Alphabet (GOOGL) shares are everywhere.

Let’s make sure that Google’s rotting core product—and business model—don’t stink up our perfectly good retirement portfolio. In a moment, I’ll name-check specific ETFs and CEFs (closed-end funds) to avoid.

First, let me give the world’s first postmortem on Google. It was a heck of a run for a technology product, more than 20 years as the “go to” search engine.… Read more

Here’s one thing most folks get wrong about dividend cuts: They can (and often do) set up terrific buying opportunities!

I know, I know. Before our customer-service inbox lights up here at Contrarian Outlook, let me be clear that we dividend investors hate payout cuts. No one wants to see their income stream and their investment take a hit, as scorned investors toss the stock.

But buying a dividend after a cut (or even before, under the right conditions) can be a winning move. It’s a setup that reminds me of the words of Howard Marks, the most successful investor no one has ever heard of (except Warren Buffett, who is a fan).… Read more

We’re a little more than halfway through the year now, so it’s a great time to check the state of play on our favorite high-yield plays: 8%+ paying closed-end funds (CEFs).

And what a half-year it’s been: CEFs have posted returns far bigger than most people expected back in January! And I see more gains ahead.

Source: CEF Insider

Truth is, the hundreds of CEFs tracked by my CEF Insider service are turning up some fascinating data, especially if we zoom into the CEF Insider Equity Sub-Index (in brown above), which has returned 12% year to date, as of this writing.… Read more

Let’s talk about monthly dividend payers today because, well, why waste our valuable time with stocks that only pay quarterly?

I selected five for our review. We’re talking sixty dividend payments per year from this group. The most generous stock dishes an elite 8.6% annually. (The “laggard” yields a respectable 6.5%.)

Why don’t more companies pay monthly? The answer is predictable and disappointing.

Wall Street runs on a quarterly system. US-listed companies are required by the SEC to provide quarterly financial updates. So, most management teams pay their dividends quarterly as part of this process.

Hence, we salute the suits in shining armor who make the extra effort to pay us every single month.… Read more

Few people pay much attention to the management team of a closed-end fund (CEF). But it’s becoming a much more critical factor driving CEF upside (and downside!), as well as these funds’ 8%+ dividend payouts.

I was reminded of this recently by a story that’s unfolding in the UK, where two asset-management firms are struggling a bit to hire CEOs. One is Scotland-based abrdn plc (SLFPF), whose shares have risen just 2.6% annually in the US on average over the last decade.

Compare that to a roughly 10% average year-to-date return enjoyed by the other major asset managers abrdn is competing with, and you get a good idea of what’s happening here: abrdn isn’t doing well enough to attract the best talent.… Read more

Who is paying a 27% premium for Guggenheim Strategic Opportunity Fund (GOF)?

Don’t get me wrong. GOF is a fine fund, delivering 9.8% yearly returns on its net asset value (NAV) since inception. But we are talking nosebleed valuation territory for GOF. It’s a dangerous purchase at these levels.

Bandwagoners buying today are unlikely to see 9.8% returns. Or anything close. Plus, they are exposing themselves to 27% downside risk because, as we’ll discuss in a minute, GOF eventually finds its way back to par.

How can a premium like this exist? GOF is a closed-end fund (CEF) with a fixed pool of shares.… Read more