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There is a ton of demand for bonds out there right now, and it’s easy to see why: they’re offering big income streams—especially when you buy your high-yield “corporates” through our favorite income plays: closed-end funds (CEFs).

These days, there are plenty of CEFs kicking out yields of 12% or more. Put just $10,000 in a dividend-payer like that and you’re getting $100 per month. Or you could replace the median American income of $41,261 a year with just $342,842 invested.

These days, thanks to the Fed’s rate hikes, holding bonds—and essentially becoming a lender by doing so—means a lot more cash in your pocket, since you’re essentially “lending” at rates not seen in over two decades.… Read more

Many investors say they buy low and sell high. But how many really do?

Let’s pick on the people buying NVIDIA (NVDA) at atmospheric levels. First, can they even spell NVIDIA? (Hint: Two “I”s).

Second, do they realize it sports a price-to-sales (P/S) ratio of 32? It is usually a really bad idea to pay 10+ times sales for a stock. Let alone thirty-two.

Note that I did not say earnings. I said sales. Revenues. The ol’ top line. Money before everything.

Scott McNealy, the co-founder of Sun Microsystems, famously told investors it was insane to pay 10-times sales for Sun’s stock.… Read more

You know what we’re gonna do about that hot January inflation print that dropped a couple weeks ago?

Ignore it.

Actually, we’re going to go one better and profit from it by grabbing stocks most folks see as “bond proxies”—solid companies whose stocks move up when rates come down.

But wait—isn’t that the opposite of what we should be doing when everyone is panicking that rates are going to stay high—and inflation is going to stick around?

Here’s the thing: Despite the noise, I don’t think that’s going to happen.

Truth be told, the panic we saw following the January CPI release looked like a mini version of last October’s freakout, when 10-year Treasury rates spiked to near 5% and worry was everywhere.… Read more

If you’re like me, you’re starting to collect your tax documents with a certain sense of dread.

It’s understandable as another April draws nearer. But there is a ray of light in the tax-season gloom for us—it comes in the form of municipal bonds, which can boost our income and minimize our future tax burden, too.

“Muni” bonds offer big yields these days, thanks to the Fed’s interest-rate hikes over the last couple years. That’s doubly valuable now because these yields are federally tax-free for almost all American investors.

That means if you’re in the highest tax bracket, you could buy 5%-yielding muni bonds and end up with the equivalent of an 8.3% yield from taxable assets like stocks or corporate bonds.… Read more

Bond bargain alert! Three secure funds yielding 8% to 9% are for sale on the discount rack.

Thanks to a two-year run of rising interest rates, these bond-like investments are cheap. I don’t expect this to be the case for long, with rates ready to relax.

These hybrid vehicles are part-stock, part-bond. They prioritize yield over price gains, which is just fine for us income-focused investors.

These “preferred” stocks share some elements of common stocks (the normal shares of companies that most of us own). We buy preferreds on a stock exchange. They represent ownership in a company. And they can move higher and lower in price.… Read more

Since last week, markets have been hamstrung by the fear that inflation is going to hang around. So we (naturally!) are going to make a contrarian play on this overdone worry.

How? By picking up high-yielding closed-end funds (CEFs) focusing on real estate—particularly real estate investment trusts (REITs). Many of these are discounted now.

I’ll show you why this timely move is our route to locking in a steady (and monthly paid) 8.3% dividend in just a moment

First, let’s break down the so-called “bad” inflation number that came out last week, because there are some quirks about it that are easy to overlook.… Read more

Be careful how you buy your bonds. The most popular tickers have four “fatal flaws” that’ll doom you to underperformance at best, or at worst leave you hanging in the event of a market meltdown!

Let’s pick on the widely followed and owned iShares iBoxx High Yield Corporate Bond ETF (HYG) as an example. It has attracted nearly $17 billion in assets because:

1. It’s convenient and as easy to buy as a stock.
2. It’s diversified (for better or worse, as we’ll see shortly) with 1,188 individual holdings.
3. It pays well, at 6% today.

The accessibility of funds like HYG appears cute and comfortable enough.… Read more

If you’re a dyed-in-the wool dividend investor (like me!), you’ve likely taken a look at the big gains folks are reaping on AI stocks … and resigned yourself to missing out on the whole thing.

After all, most AI stocks, like Alphabet (GOOGL) and NVIDIA (NVDA), yield 0% (or close to it!). And we simply demand a dividend before we buy anything.

The good news is we don’t have to miss out—instead, we’re going to go one floor up from the “first-level” options that most folks buy to the “penthouse” of AI investments: tech-focused closed-end funds (CEFs)!

The beauty of CEFs is that by going with these high-yield funds (8%+ payouts are run-of-the-mill in CEF-land), we don’t have to sell the blue chips we currently own!… Read more

At my CEF Insider service, I regularly write about the most effective ways to get big dividends—often double-digit yields—from closed-end funds (CEFs) holding some of the world’s best stocks.

I’m talking about companies like Microsoft (MSFT), Apple (AAPL) and Visa (V) here—three common holdings among equity CEFs.

But you can’t just dial up any of these high-yielding funds (CEFs typically yield north of 7%) and call it a day. To get the most out of your CEF investments, you need to invest a bit of time and effort.

Well, how about this: I’ll save you the work and show you a simple three fund portfolio you can create today that gets you a 7.7% income stream and the confidence to hold these funds for decades to come.… Read more

These unloved stocks yield between 6.9% and 21.4%. These are big dividends, but not the main reason we are discussing this ignored five today.

Each of these names is so unliked by the Wall Street suits that they have serious upside potential.

How could that be?

These shares are heavily sold short.

Short selling is a way to bet against a stock. To do so, one must borrow the shares and sell them today. In hopes of buying back at a lower price tomorrow.

What happens if the stock goes up tomorrow? And rises the next day? And so on?… Read more