Articles

This Bond-Buying “Hack” Converts a 5% Dividends to Massive 8.3% Payouts

Michael Foster, Investment Strategist
Updated: July 12, 2021

Let’s break out of today’s zero-rate wasteland and help ourselves to huge, safe payouts yielding all the way up to 8.3%. And these massive payouts are tax-free too!

And, no, we won’t be hiring a team of CPAs to pull this off—nothing so expensive and impractical. Instead, we’re going to set ourselves up with a closed-end fund (CEF) that holds municipal bonds, or “munis.” And thanks to their tax-free nature, if you’re in the top tax bracket, a muni bond paying, say, a 4% dividend could be worth 7% or more to you.

I’ll give you a specific CEF that’s worth putting on your list now in a second (its 5% stated yield could be worth an outsized 8.3% to you, if you’re in the top tax bracket).… Read more

This 5-Stock Dividend Portfolio Yields 12.3% (That’s No Typo)

Brett Owens, Chief Investment Strategist
Updated: July 9, 2021

Believe it or not, in today’s “no yield” world, there are still 845 stocks that boast dividend yields of 3%. And 34 that pay more than 10%!

You Still Have Options


Note: U.S.-listed companies and funds with market capitalizations or AUM greater than $300 million. Source: Standard & Poor’s

Big yields can make a big difference. A 3% payout on a million-dollar portfolio is $30,000 per year in dividends. That’s nice, but we can “supersize” it to $100,000 annually with the 10% payers.

If any of these yields are safe, of course.

In the world of high yield, security is tricky.… Read more

1 Safe 7% Dividend You Could Hold Forever (and 1 Yield Trap About to Spring)

Michael Foster, Investment Strategist
Updated: July 8, 2021

Imagine two closed-end funds (CEFs) that both yield upwards of 7%. Sounds great, right? Buy a bit of both and get $58.33 per month for every $10,000 you invest. Put in $500K and you’ve got a middle-class income dropping into your account without you having to do a thing.

While that’s a great way to achieve financial independence, we CEF investors know it’s not as easy as searching out a couple of 7% yielders and buying them. We need to go deeper.

While there are over a hundred CEFs yielding 7% or more right now, their quality varies widely. Some are yield traps that will drain your capital with lousy price performance over time, more than offsetting any dividend cash they pay you.… Read more

4 “Pick and Shovel” Infrastructure Dividends Up to 6.5%

Brett Owens, Chief Investment Strategist
Updated: July 7, 2021

We individual investors have many edges on the Wall Street suits. Betting on the next government handout, however, is not one of them.

Megatrends, on the other hand, are our wheelhouse. Professionals excel at “looking ahead” three to six months. Fortunately for us, their eyes glaze over beyond a year! This is where you and I can regain our advantage when it comes to infrastructure income investing.

While Wall Street weighs the trees, we will consider dividends from the broader megatrend forest. Let’s highlight some aspects of the potential American Jobs Plan that also happen to be infrastructure trends already in motion.… Read more

My 2-Step Plan for Safe 7.8% Dividends in Retirement

Brett Owens, Chief Investment Strategist
Updated: July 6, 2021

The retirement-income battle never ends! Last summer, we watched cautiously for the next dividend cut. This summer, we’re tracking inflation.

No matter the worry, we can apply my “2-step retirement income plan.” It’s designed to keep inflation, another virus wave or pretty well any other calamity from impacting our dividend streams.

Inflation Sideswipes Retirees

First, though, we can “thank” Jay Powell and his runaway money printer for our sleepless nights. You can’t tell me that goosing the money supply by 30% in a little more than a year doesn’t have something to do with rising prices:

Powell Drains Retirees’ Buying Power

And retirees—the folks with the least amount of wiggle room in their monthly income—are taking the brunt.… Read more

This “12% Dividend Secret” Could Let You Retire Now (on Just $300K)

Michael Foster, Investment Strategist
Updated: July 5, 2021

Imagine getting $100 per month in passive income for every $10,000 you invest. That amounts to a $35,000 annual dividend stream with less than $300,000 saved.

It’s not impossible. In fact, investors do it all the time with my favorite high-yield investments—closed-end funds (CEFs). While the average yield on CEFs is currently 6.2%, a third of these funds yield upwards of 7%, and 17 boast payouts of 10% and higher.


Source: CEF Insider

CEFs’ payouts are particularly impressive considering the SPDR S&P 500 ETF Trust (SPY), an index fund tracking the S&P 500, yields a paltry 1.3% today—the lowest yield for the stock market in 20 years.… Read more

48 Dividend Raisers Yielding Up to 8.8%

Brett Owens, Chief Investment Strategist
Updated: July 2, 2021

For the past few weeks, I’ve been drawing up a roadmap of how income investors like us can fend off inflation’s impending march.

Utility stocks. Small banks. Heck, small businesses.

But they all center around one central theme you can find in just about any corner of the market: dividend growth. Show me a payout that is heading higher, and I’ll point you to a stock price that is likely to follow.

We’ve got a big summer ahead, with 48 dividend raises on the way! Here’s why these stocks are must-watches for the months ahead.

Why We All Need Bigger Dividends Over Time

It’s simple math.… Read more

447% Returns, 5.2% Dividends (Just by Avoiding This 1 Simple Mistake)

Michael Foster, Investment Strategist
Updated: July 1, 2021

Once folks get a taste of closed-end funds (CEFs), they typically rave about one thing: the dividends! Yields of 7% and up are common with CEFs, and they often come your way monthly.

We also love the fact that even though CEFs are a small corner of the market (with only about 500 or so out there), we can build a diversified portfolio with them: there are CEFs that hold US and international stocks, bonds, real estate—even private equity. You name it.

This broad range gets us around a problem most income-seekers face: being forced to stake significant sums in single stocks just to get big payouts.… Read more

REIT Inflation Hedge: 3 Dividends to Buy Now

Brett Owens, Chief Investment Strategist
Updated: June 30, 2021

Unlike the broader market, REITs (real estate investment trusts) haven’t been messing around this year. The Vanguard Real Estate ETF (VNQ) has convincingly broken out to new highs.

For us dividend stock traders, the choice between the confident VNQ and tip-toeing S&P 500 has been an easy one. With short-term time frames, it’s usually best to ride the hot trend:

Money Cycles Towards REITs

REITs are on fire—the good kind, not 2020 dumpster variety—but they still have upside thanks to last year. Many perfectly good real estate stocks were tossed into the trash. These are high-quality landlords still trading on the cheap side as that 2020 stench slowly fades from their shares.… Read more

3 Huge Monthly Dividends Set to Soar (One Yields an Incredible 7.6%)

Brett Owens, Chief Investment Strategist
Updated: June 29, 2021

When it comes right down to it, we dividend investors really only need three things:

  • Bargain stocks with …
  • High current yields and ideally …
  • Monthly payouts—so we can line up our income with our bills and reinvest our dividend cash without having to wait for three long months.

I know—this list is cute, but it sounds wildly out of step with the times.

After all, the COVID rally has sliced the typical S&P 500 stock’s yield to an unlivable 1.4%. And bargain valuations? Ha! Stocks trade at a helium-powered 37-times their last 12 months of earnings right now.

And we all know that to get monthly payouts, we must look beyond the popular stocks to lesser-known plays like real estate investment trusts (REITs) and closed-end funds (CEFs).… Read more