Articles

If you feel trapped grinding out dividend income at 3% or so, listen up. The Fed’s latest “no hike” call has provided big 7% to 9% yields with the “all clear” signal for another year or two, at least.

In a world where a million bucks worth of dividend aristocrats will only net you about $29,000 annually, you’re probably looking for higher yielding options. Some closed-end funds (CEFs) paying up to 9% can be good candidates – if you choose wisely.

You’re probably familiar with their mutual “cousins”. Closed-ends are a bit different. While mutual funds tend to buy individual stocks and mirror the market, CEF managers tend to have wider mandates and longer leashes.… Read more

Energy is a dangerous sector. With declining profits and even dividend cuts hitting some companies, it’s becoming harder and harder to invest in energy and for a reliable income stream.

But this doesn’t mean we need to avoid energy altogether—we just need to choose our stocks carefully.

I don’t see oil climbing much above its current price anytime soon, considering the major output from America-based firms and plans in Iraq and Norway to increase output. But OPEC is also looking to control pricing by limiting output, so we may see a supply/demand standoff that will keep the commodity range bound. In fact, oil has been range bound for quite a while already:

Temporary Dips and Peaks

Although WTI crude oil futures dipped to below $30 per barrel earlier this year and climbed over $50 last summer, those volatile prices didn’t last more than a couple months.… Read more

Municipal bonds are popular with retirees because they provide tax-free income. Some pay secure yields above 6%, which translates to 10% tax-equivalent payouts to folks in high tax brackets.

But buying individual municipal bonds isn’t easy. Many brokers don’t offer them, and the ones that do usually try to sell low quality munis that big institutions have avoided because they know the bonds are poor quality – like the dogs issued by Puerto Rico or Detroit.

But most munis are perfectly secure. Ideally, you want to get your hands on the municipal bonds that institutions are buying. Many people think that’s impossible, but it isn’t—it just means we need to think laterally.… Read more

Today I want to talk about a corner of the market that has been overlooked for far too long despite offering sustainable high yields of 4% or more—with dividends primed to soar even more.

This sector is a distant cousin to a more familiar group of stocks: utilities. Utility stocks were once Wall Street’s best kept secret: high dividends, cheap valuations, sustainable business models, and steady revenues were all reasons why many big investors quietly bought these small regional companies. Sadly, the cat’s out of the bag. Utility stocks are up nearly 14% year-to-date as investors pile into the sector:

Utilities Gone Haywire

Just look at the performance of the SPDR Utility ETF (XLU), which is up massively even after a recent correction from its shocking 22% year-to-date return earlier this summer.… Read more

So far, 2016 is shaping up to be a great year for just about anyone in the stock market. With the S&P 500 up 7% year-to-date, it’s been pretty tough to lose money in this year’s market.

That’s caused a lot of money to flow into high income yielding stocks, although some aren’t covering their dividends and some have grown wildly overvalued.

For now, income investors are ignoring these developments, since they’ve been getting paid cash dividends while their tickers trend up. This has also encouraged a growing number of investors to pile into business development corporations (BDCs), a group of specialty lending firms that pay dividends of 8% or more—sometimes much more.… Read more