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With the election in the rear-view—and Inauguration Day just a few weeks off—plenty of investors have asked me what they should do with their portfolios now.

I’ll name five bargain dividend growers that should be on your buy list in a moment. But first, here are 2 sectors—and 9 stocks—you need to handle with care.

Let These 4 Growth Rockets Cool Down

On October 3, I pounded the table on defense stocks, namely Raytheon (RTN) and Northrop Grumman (NOC), and infrastructure plays Cummins (CMI) and Parker Hannifin (PH).

I hope you followed that advice, because all four have beaten the SPDR S&P 500 ETF (SPY) since then.… Read more

You can take it to the bank: interest rates are going up.

Everyone from Janet Yellen to Donald Trump says it needs to happen. Traders betting through the Fed futures markets agree, pegging the odds of a quarter-point rate hike at the Fed’s December 14 meeting at 94.9%:

More hikes seem likely next year, if oil prices keep rising, taking inflation along with them.

Since higher rates are bad for high-yield assets, does this mean it’s time to give up and accept that 2% dividends are the only income you can expect in this market?

No way.

Because there’s an easy way we can protect ourselves from higher rates and still collect a nice 6.8% dividend yield.… Read more

If you could earn 5% to 6% in income every year from a stock you don’t have to watch … you’d hold it today, right?

Well, if you don’t already, here’s your wake-up call.

Preferred stocks are a rarely talked about type of corporate equity that packs a one-two punch of high yield and low volatility. But that’s not why they’re called “preferred” – that moniker comes from the fact that preferred dividends take priority over common shares’ dividends, and must be paid out first. If a company wants to cut or suspend its payouts, it must do so to common shares before preferred shares.… Read more

The last time this happened, municipal bonds soared 40% over the next 12 months.

These usually-steady payers are coming off their worst month since September 2008, according to Standard & Poor’s, when its “muni” index dropped 4.8% (and popular funds fared even worse):

The Last Muni Bloodbath in Sept 2008…

October 1, 2008 didn’t mark the bottom for munis. But it turned out to be a pretty good time to buy, with these funds returning up to 38.4% in the ensuing 12 months!

… Gave Way to This 12-Month Muni Boom

Those were scary times. The financial world was melting down, and prominent pundits feared that municipalities would be the next wave of defaults.… Read more

On the lookout for safe dividends? (Who isn’t, right?)

These days, you generally have three options: large-cap stocks with long dividend histories, municipal bonds and US Treasuries.

Treasuries are considered the safest of that group, and large-cap stocks the riskiest, but they’re still much safer than plenty of other investments, such as small caps and junk bonds.

I’ll show you two low-risk investments that are great buys now in a moment. But first, I want to tell you why recent events have called the safety of some of the options I just named into question.

Let’s start by looking at the following chart:

“Safe” Assets Turn Volatile

First, note how the iShares S&P National AMT-Free Municipal Bond Fund (MUB), a good proxy for municipal bonds as a whole, is the least volatile of the three funds shown above.… Read more

Still think the Federal Reserve may not hike rates this month?

It’s time to change that view.

Traders betting through the Fed futures market now see the odds of rates staying where they are at a measly 1.4% after strong employment and consumer confidence numbers last week.

And if you’ve tried to take out a mortgage lately, I don’t have to tell you which way interest rates are headed: no thanks to a spike in 10-year Treasury yields, which hit a 17-month high last week, you’re now paying more than 4.0% on a 30-year mortgage.

Borrowers Get Mauled

So, time to hold off on dividend stocks, then, right?… Read more

There’s no doubt Donald Trump’s election win has been great for stocks.

Municipal bonds? Not so much.

In the last month alone, “munis” have lost over 3% of their value—a huge decline for an asset class that’s supposed to be safe and stable.

So is it time to sell your munis, give up on safe income and try to ride the Trump rally in stocks?

No way. In fact, if you’re just thinking of doing that now, you’re probably too late.

The Trump rally reversed course after Thanksgiving, with a down day that threw a damper on the stock market’s post-election euphoria.… Read more

First-level investors mistakenly think that real estate investment trust (REIT) profits will be hurt if rates rise. In three instances, they’re dead wrong – and missing out on big, secure dividends with upside to boot.

At these REITs, top insiders – who of course know better than armchair observers – are currently buying up their own shares like crazy. While corporate insiders may sell stock for many reasons, they only buy because they believe the payout is safe and price is likely to rise.

In the short run, the “rates up, REITs down” theory puts on quite the show. If you hold REITs in your portfolio, I can tell you how it’s trading (up or down) on any given day by considering only one number: the 10-Year Treasury Rate.… Read more

Today I’m going to share three of my favorite dividend stocks from an ignored corner of the market set to soar in President Trump’s first year.

Which corner? The “little guys”: small and mid-cap stocks.

In many ways, the cat’s already out of the bag. As they’ve done with financial stocks, investors have bid up small- and midcaps since Trump’s win. Look at the how the SPDR S&P 600 and the S&P Midcap 400 have performed vs. the S&P 500:

That’s a huge gap … and it makes sense. With the US dollar soaring and Trump threatening to toss trade deals in the shredder, the market’s small fry (which tend to be more domestically focused) are in the catbird seat.… Read more

It’s a classic death spiral.

I’m talking about the flight to dividend-paying—and dividend-growing—stocks in the past eight years.

It’s easy to see what triggered it: US Treasuries don’t offer pay enough to cover inflation, and despite President-Elect Trump’s inflationary policies—more on those below—that won’t change anytime soon.

That’s prompted income-starved investors to pile into higher-yielding options, like municipal bonds, utility stocks, corporate bonds and dividend-growth stocks. These are all good choices, of course.

But here’s where the death spiral comes in: the rush into these investments has dragged down their dividend yields (because you calculate yield by dividing the annual dividend by the current share price), sending investors into even riskier areas of the market.… Read more