Articles

The Fed has finally cut rates, and if the “dot plot” is any indication, it won’t be the last. This is fuel for real estate investment trusts (REITs)—they thrive when borrowing costs fall and their fat dividends shine next to shrinking bond yields.

Today we can lock in payouts between 6% and 13% from landlords set to surge as Powell’s long-awaited pivot plays out.

Why do REITs rally as rates fall? These stocks act as “bond proxies” that move alongside bonds and opposite rates. Here is a major REIT ETF plotted against the 10-year Treasury yield. As you can see, when the important rate zigs, the REIT benchmark zags:

REITs Zig When Rates Zag

Rate cuts don’t always hit the 10-year overnight.… Read more

Near the end of 2022, a reader wrote in to tell me that my bullish view of the economy at the time was off the mark. From his vantage point, people were struggling, prices were soaring, and wages weren’t keeping up.

This reader wasn’t alone—it was around that time that Bloomberg wrote that the chances of a recession in the next year were 100%. So there was zero chance of avoiding one, in other words.

We all know what happened next: The economy and stock market took off. That translated into real gains (and high income) for the portfolio of my CEF Insider service.… Read more

When DoubleLine CIO Jeffrey Gundlach speaks, we yield hounds listen.

Right now, the “Bond God” has gold on the brain. We’re dialed in, because his latest utterances are pointing the way to a sweet 7.4%-paying “gold-dividend twofer” for us.

I’m talking about a play for price upside in the near term, followed by big monthly dividends (yes, 7.4%, and maybe more) when the “discount trigger” we’ll talk about in a sec kicks in.

The Bond God Calls ’Em Like He Sees ’Em

The Bond God is a dyed-in-the-wool contrarian who holds a special place in our hearts because, well, he’s often right.… Read more

$20 trillion.

That’s how much value has been added to the US housing market in the last five years. It’s a number so big it’s near-impossible to get your head around. And it’s a double-edged sword.

On the one hand, if you own a house, that house is worth more, and you’re richer as a result. But if you don’t, buying is expensive and comes with a higher risk of a price drop. That’s because this $20-trillion gain is a 57% increase since 2020, or 9.5% per year.

That is, simply put, unsustainable.

Which is why, today, we’re going to look at a way to hedge against this risk and collect an 8.4% dividend as you do.… Read more

Artificial intelligence is supposed to be graceful, just code humming in the cloud. Yet it’s anything but lightweight. AI is an energy hog.

Every time a chatbot like ChatGPT spits out an answer, it pulls from enormous racks of servers running in data centers. Those servers draw electricity on the scale of small cities.

Over the past few years, AI has been a tech story. With increasing adoption, however, it is about to evolve into a power story.

AI can’t happen without natural gas. Renewables are growing for sure but most new data centers are still tied to gas-fired plants.… Read more

At CEF Insider, we live for those times when a bad news story turns up a great dividend opportunity. And the headlines just served one up, putting a 12%+ dividend (in a hated sector, no less) on the table.

This special situation is intriguing because no one in America is talking about it. That’s because it comes from across the pond, in the UK. Specifically, I’m talking about one of the UK’s biggest insurers, Phoenix Group, pulling £22 billion (US$30 billion) from asset manager Aberdeen Group plc (SLFPY), reportedly to manage these funds in-house.

Aberdeen’s name might ring a bell if you’re a CEF Insider member, as we’ve held the firm’s funds in the past.… Read more

Most Wall Street “suits” are allergic to dividend cuts. These spreadsheet jockeys sooooo lack imagination. They prefer linear trends—up and to the right.

Dividend growers model nicely. Payout “resets” (cuts!) do not. So, there is often a knee-jerk reaction from analysts to sell every divvie slash they see.

Same goes for most individual income investors. These vanilla beans sold BlackRock Health Sciences Term Trust (BMEZ) late last week when BlackRock sliced the dividends for three of its popular funds.

The weaker hands sold. Big payouts remain. As contrarians, we’re intrigued.

Dividend cuts, ironically, often mark the start of opportunity. Here’s what the knee-jerk sellers miss:

• Even after the trim, BMEZ still yields 9.2%.

While Wall Street chases NVIDIA (NVDA), the real AI dividend story is unfolding in the sleepy insurance sector. These “boring” firms are quietly leveraging AI tools to slash costs, grow premiums, and—best of all—dish us bigger dividends.

AI is spreading across the economy much faster than many expected. That means we need to move even faster to front-run that shift.

We’ve already been hard at it. In July, we talked about our favorite dividend payer to grab as AI reworks farming. Few people realize it, but “ag” has a long history of leveraging tech. It’s a big reason why productivity per farm worker has shot up 16X since 1948.… Read more

We’ve got a frankly, bizarre dynamic setting up in stocks right now.

Global stocks are clobbering their American cousins this year. But here’s the disconnect: This is happening even though US stocks are hitting all-time highs seemingly every day.

On the surface, it sounds like both of these can’t be true. But as we’ll see below, this setup makes total sense. We’ll also look at how we can play it for both offense—price upside, in other words—and defense (in the form of 8%+ dividends), too.

USA, USA, US … Wait a Minute …

Here we’re looking at the S&P 500, as measured by the SPDR S&P 500 ETF (SPY), in purple, compared to the Vanguard FTSE All-World Ex-US Index Fund (VEU), a good benchmark for global stocks (minus the US, as the name says), in orange.… Read more

Wall Street suits tend to avoid business development companies (BDCs). That’s a mistake. For us income seekers, these “Main Street bankers” can be the best dividend machines in the market.

Forget the “penny yields” most stocks pay. BDCs can dish divvies between 10.6% and 12.6%. Unlike vanilla blue chips, BDCs are mandated by Congress to flip us at least 90% of their taxable income.

In other words, the dividends are a “built in” feature.

Of course we don’t just close our eyes and buy any 12% payer. Some BDCs are dividend machines, others are disasters. Our job: separate the stars from the scrubs and only buy the cash cows.… Read more