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Did you know there’s a reliable way to significantly boost the income you’re collecting from the dividend stocks you already own?

I’m talking about ways you can turn 3% yielders into 8% income generators. And it doesn’t involve leverage or any other risky techniques.

I’m talking about “covered calls” – one of the secrets of turning pedestrian blue chip dividends into cash cows. If you’re not familiar with the practice, read this article on Stock Options Channel about selling calls for income; it covers the basics and is pretty easy to understand. In short, call options are a kind of insurance on stocks, and you can sell this insurance for cash without putting additional capital at risk, beyond what you’ve already invested in the stock.… Read more

Stop me if you’ve heard this lie before…

“Higher rates are going to hurt high yield stocks.”

It’s a lazy blanket statement that, for the most part, just isn’t true. And that presents great opportunity for us income investors with a contrarian mindset. We can look past the first-level headlines to the second-level facts – and build a portfolio that will actually outperform after summer’s rate hike.

About that hike – it’s not a foregone conclusion, but the “smart money”, or traders who actually place money on the various likelihoods, believe there’s a 53% chance of a boost by late July:

Fed Fund Futures Implied Probabilities for July 2016

That’s a big shift from a month earlier, when traders were only pricing in an 11% chance of a hike by then.… Read more

I’m sure I don’t have to tell you how tough it is to build a dividend retirement portfolio that provides a decent yield these days.

Many investors make utility stocks a cornerstone, but that strategy is less appealing this year, with many utilities’ valuations stretched and their yields well below long-term averages.

Take Duke Energy (DUK), America’s biggest utility by market value, whose trailing-twelve-month P/E ratio has climbed to 20.1 from 17.8 at the start of the year. Meantime, its yield has slumped to 4.1% from 4.5%.

Duke Gets Pricey

The New Cornerstone of Your Dividend Retirement Portfolio

But fear not, there’s another group of investments boasting even higher yields than utilities; I’m talking payouts of 6% and up.… Read more

In a world of record low interest rates, where savings accounts offer less than 1% interest, investors are struggling to find a risk-free return on their money that will outpace inflation. With U.S. Treasuries no help, many people are flocking to dividend growth stocks or junk bonds.

Unfortunately, both of these can be volatile, as we’ve seen over the past year. Which is why it’s surprising so few have jumped into a better alternative: municipal bonds.

Benefits of Municipal Bonds

Munis have several advantages, and a big one is their tax-free status. Many (but not all) municipal bonds are tax free, meaning that the yield they return is actually higher than they first appear.… Read more

Today I’m going to share my favorite retirement investment with you. Even with the stock market at elevated levels, I expect it to earn me 8-10% annually over the long haul.

Last month my software company setup a 401K retirement plan through Vanguard. I had to select my funds – and that gave me instant pause. Sure, stocks for the long run… but the S&P at 23-times earnings? Europe or Asia? Roll the dice on emerging markets?

My answer was “none of the above.” Instead I piled my current and future contributions into the Vanguard Dividend Growth Fund (VDIGX) with a 100% allocation.… Read more

Forget fixed income – it’s dead, at least as we knew it. It is still possible to earn secure, meaningful yields – with price appreciation to boot – but it requires a new-look portfolio.

Interest rates have languished below 2% virtually all year long. We started off at 2.27% and it’s fallen steadily as the year presses on. Now hovering in the 1.75% range, there’s not a lot of profit to be had in conservative investments.

Luckily there are some select stocks that offer both growth potential as well as healthy dividend yields. If you’re looking for income, sell your Treasuries and buy these issues instead.… Read more

There are a growing number of stocks and funds yielding over 12%, luring in unsuspecting investors. Earning $12 in income for every $100 invested sounds great – unfortunately, it’s often too good to be true.

Generally, stocks have outsized yields when the market thinks that their income source is threatened. When that happens, a dividend cut ensues, turning the big dividend into a tiny one.

For example, ConocoPhillips (COP) was a blue chip with decades of dividend growth behind it and a handsome 4% dividend yield for much of the last five years. As energy prices declined along with Conoco’s stock price, its yield skyrocketed… until it slashed its dividend by over 66% at the beginning of this year.… Read more

Whether you’re relying on your portfolio for income or reinvesting your payouts, buying monthly dividend stocks makes a lot of sense.

After all, your bills roll in every 30 days or so, so why not your dividend income, too? And while a well-built portfolio will drop dividends into your account at all times of the year, you’re still left with an income stream that’s “lumpy”—soaring one month and dipping the next.

But throw in a handful of monthly payers, and you’ll bring some order to the cash-flow chaos.

Of course, convenience isn’t the only reason I love monthly dividend payers. They also let you reinvest your payouts quickly, amping up the power of compounding—and putting thousands of extra dollars in your pocket over the long haul.… Read more

Billionaire “Bond God” Jeffrey Gundlach just shared his favorite short idea at the Ira Sohn investment conference last Wednesday. Dividend investors take note – the high priest of fixed income just panned your longtime standby!

Utilities aren’t safe, says Gundlach. Their valuations are stretched to the upside, and their yields are too low. So he recommends a pair trade that shorts the Utilities Select Sector SPDR (XLU), which pays a meager 3.3% today:

Utility Yields At 7-Year Lows

A low yield can be OK if dividend growth is meaningful, but few utilities are boosting their payouts at a fast enough pace to compensate.… Read more