Articles

With great yield comes great risk.

A double-digit yielder is a pretty rare thing. Among the 7,000 or so stocks, exchange-traded funds and closed-end funds on the market, a relative handful (135) dole out 10% or more in annual income. And because sky-high yields are often the product of tanking share prices or excessive risk, many of them are traps – and only a select few are worth considering. Today, I’m going to show you a trio of stocks that yield more than 12% and have earned a closer examination.

But first, let me show you just how rough it is for the big-income club.… Read more

Warren Buffett doesn’t just beat the market – he makes a mockery of it. Since Buffett took control of Berkshire Hathaway back in the middle of 1965, the conglomerate has more than doubled the average annual gain of the S&P 500.

But here’s something you won’t hear anywhere else – Buffett doesn’t love all of his stocks equally. In fact, there are three dividend dogs that I bet he’d sell today if he could get away with it.

Let’s look at six of Buffett’s current income plays to separate his three buys from his three sells.

SELL – Verizon Communications (VZ)
Dividend Yield: 5%

Verizon Communications (VZ) is technically in the Buffett boat, but it’s not exactly a high-conviction pick anymore.… Read more

Mortgage rates reached a new milestone last week, and it’s one of the most important—and underreported—events in economic history.

For the first time ever, 30-year mortgage rates fell below 3.99%, on average. This is stunning for several reasons, but the most important is that the Federal Reserve is actively working to get mortgage rates higher. By increasing its Federal funds interest rate target, the Fed is hoping to make borrowing more expensive for everyone—companies, students and, yes, homebuyers.

But it’s not working.

And perhaps the biggest reason why it’s not working is that bond investors don’t think economic growth is going to strengthen, so they’re effectively daring the Fed to keep raising rates.… Read more

Today we’ll talk about how to value REIT (real estate investment trust) stocks. I’ll show you specifically how to lock in high current yields and leave yourself open to 250%+ price upside as well.

A big thanks to my astute subscribers who have written in asking for this lesson. FFO in particular has been a hot question – what exactly is it, anyway? Let’s start here, because it’s what drives REIT returns.

Funds From Operations (FFO) is the Cash Flow That Matters

FFO represents the amount of cash a REIT actually generates from its operations. It’s where our dividend originates – which makes it the building block for everything else in the REIT world.… Read more

A couple days ago, we showed you how to get $4,000 in monthly income from just 4 stocks.

A bonus? Each of these buys pays dividends every single month—precisely when your bills roll in.

That $4,000 number was no accident; it’s the average amount a 65- to 74-year-old couple in the United States spends every month, according to the Bureau of Labor Statistics. That makes this a great number to shoot for when you’re building your own retirement nest egg.

And today we’re going to go further, with 4 funds that give you an extra margin of safety while you’re pocketing the same amount of income—a nice $4k a month—in your golden years.… Read more

It used to be that finding a decent yield in the stock market was easy.

Just seven years ago, all you had to do was buy an ETF in a sector that got income hounds’ hearts racing, like the Utilities Select SPDR ETF (XLU) and lock in an easy 4.48% payout:

The “Good Old Days” Are Over for Utility Fans

But do the same today, and you’ll get just 3.1% for your trouble, no thanks to the merciless rise in stocks (and shriveling of yields) driven by a decade of near-zero interest rates.

And sure, a 3.1% payout may still sound okay.… Read more

Exchange-traded funds (ETFs) have rapidly earned a favored spot among investors thanks to their dirt-cheap diversification. If you want to quickly build a blended portfolio at a low price, it’s hard to do better than ETFs.

Closed-end funds (CEFs), by contrast, are virtually an afterthought, and that’s too bad. Because in many cases – including the three high-yield dynamos I want to show you today – they’re a superior source of quality and raw total-return performance.

What is a closed-end fund exactly? Funnily, it sounds almost like an ETF – it’s a big, pooled investment in numerous securities (stocks, bonds, preferred shares or other assets) that trades on an exchange.… Read more

Investors looking for the surest path to dividend growth typically look to the S&P 500 Dividend Aristocrats. These are the supposedly “elite” dividend stocks within the S&P 500 that have not just paid but hiked their regular distributions at least once a year for a minimum of 25 consecutive years.

It’s not a crowded clubhouse, with just 52 members at the moment, but don’t be fooled – just like most groups of stocks, there are winners and losers, like the group of five Dividend Aristocrats I’ll be breaking down for you today.

You’d think that decades of dividend growth would be a sure indication of stock quality, and thus outperformance.… Read more

Stocks are going gangbusters, but some closed-end funds—including three I’m going to tell you about below—have gotten way ahead of the market.

That means it’s time to sell. Yesterday.

But don’t let that turn you off the whole CEF space. Truth is, there’s still a treasure trove of hidden gems here, including some that crush the S&P 500 while paying incredible 7%+ dividends. It’s just that investors sometimes go overboard and bid certain CEFs above their actual value.

How is this possible?

Because unlike ETFs and mutual funds, which always trade at or near their net asset value (NAV, or what a fund’s underlying assets are worth), CEFs often trade at big premiums or discounts to NAV.… Read more

We were inching forward on a busy road in suburban Boston. I looked out our window and asked my friend how much of the retail strip to our right he’d short (if he could).

Joey works for a real estate hedge fund in New York, by the way.

“All of it,” he replied without hesitation.

He paused.

“Sell it all.”

I nodded in agreement. Death by Amazon before our very eyes!

Now you and I don’t normally chat about brick and mortar stores because, quite frankly, who cares about retail stocks. They don’t pay big dividends unless they’re in big trouble, like Macy’s (M) (and its 6.5% mirage yield) right now.… Read more