Articles

There’s no way around it: the S&P 500 now has a P/E ratio of more than 26 going into the first earnings season of 2017, and even the “safest” bets are starting to look scary.

Unless we see massive profit growth all around, there’s a real risk this bull market is going to stutter—or worse.

So where do you go for value? It’s getting harder than ever, but there is one corner of the market that got way ahead of the S&P 500 and has since taken a step back. I’m talking about real estate investment trusts (REITs).

And now, there are three REITs that combined provide over 9% in income with over 200% average dividend coverage.… Read more

The Federal Reserve just dropped the first of three potential interest-rate bombs on Wall Street – a quarter-rate hike that was supposed to send rate-sensitive assets scurrying. Instead, blue-chip dividend stocks, MLPs, REITs – almost everything headed higher, including the trio of heavy-yielding business development companies (BDCs) I want to show you today.

Investors often look at interest rates and dividend-yielding stocks as a water-and-oil relationship. You know the drill. If interest rates go up, and Treasuries and other bonds begin to yield more in response, they’ll look more attractive versus similar (and even slightly higher-yielding) dividend stocks.

After all, as secure as even the bluest, chippiest blue-chip stocks might seem, they pale in comparison to the full faith and credit of the United States government.… Read more

Thinking of avoiding closed-end funds, now that we’ve got another Fed rate hike in the books?

It’s easy to see why, with the “smart money”—traders betting through the Fed funds futures market—expecting another hike just three months from now. In all, the market’s calling for three hikes this year, and so is Janet Yellen.

One Down, Two to Go?

But if you let that scare you away from high-yield sectors like CEFs, real estate investment trusts and preferred shares, you’ll miss out on some serious income.

In a moment, I’ll show you how to pick the CEFs with the most upside, along with the high payouts these funds are known for.… Read more

Vanguard is killing it. They’re now the biggest money manager in the world, with a whopping $4 trillion in assets under management.

It’s a feel-good story for a lot of investors, since the low-fee index fund juggernaut has marketed itself as the humble alternative to the high-rolling Wall Streeters who have become the target of public ire since the global financial crisis.

The feel-good story is simple. Vanguard has low overhead, pays its executives relatively modestly and passes those savings on to investors. Because of lower fees, the investors win; because of economies of scale, Vanguard wins; and because of the efficient-market hypothesis, which says hot-shot analysts can’t consistently outperform the stock market in the long run, the only people who don’t win are those evil banksters.… Read more

There hasn’t been a better time to buy real estate investment trusts (REITs) since July 2009. That was the last time this “simple signal” flashed B-U-Y.

Investors who bought on this signal then have enjoyed 223% returns since. And those gains didn’t require any fancy stock picking – just a one-click purchase of the Vanguard REIT ETF (VNQ).

The signal? VNQ itself paying 5%:

Highest REIT Yields Since the Financial Crisis

Most income hounds get it wrong. They pile into REITs when their yields are low because they are desperate for any positive income stream. That’s a bad idea because there are only two ways REITs can pay you:

1. With today’s dividend, and
2. With tomorrow’s (hopefully higher) payout.

Plenty of investors buy corporate bonds because they think they’re safe investments.

That makes sense. After all, you do get your principal back at maturity. But corporates still have plenty of risks—particularly now, with interest rates arcing higher.

That’s why I’m recommending another asset class that’s set to deliver even higher yields and fatter capital gains—with much less to fear from interest rates. More on that in a moment.

First, let’s unpack these ideas one by one, starting with why so many investors just can’t kick their corporate-bond habit: corporates tend to offer higher yields than stocks while giving you exposure to the same companies.… Read more

In a crazy bull market like this, you may feel like it’s impossible to lose.

That’s a dangerous feeling. Because there are a few loser stocks out there—although admittedly there are far more winners than losers.

Still, if you’re holding on to one of the big loser stocks right now, you can’t be blamed for feeling bad about it. How can you be losing money when the S&P 500 is up a whopping 18% from a year ago?

You might even be thinking about giving up on stocks. You might think the market is rigged and there’s no way for anyone off of Wall Street to compete.… Read more

I know I don’t have to tell you that risk management is one of the keys to successful long-term investing.

But here’s the strange thing: most responsible, risk-conscious investors underperform the market—and not by a little.

Why?

Because the reality of risk management is not the conventional wisdom frequently peddled by financial advisors. They warn that taking on too much risk will threaten your life savings, so you need to choose an extremely conservative fund and invest for the long term.

That’s close enough to the truth to sound convincing—but unfortunately it’s wrong. (I’ll show you two funds that upend the “conventional” wisdom—and deliver consistent market-beating gains—in just a moment.)… Read more