Articles

2 Dangerous Dividends to Sell Now – and 1 Safe 11.6% Yielder to Buy

Michael Foster, Investment Strategist
Updated: January 17, 2017

Today I’m going to show you two business development companies (BDCs) that were great buys once but now need to be banished from your portfolio right away.

They’re all good companies, but recent market fervor has caused them to be way overpriced. And while the bull run has been good for all BDCs, there is still one I still see as underpriced relative to its potential. More on that in a moment.

This Popular Name Is Headed for a Fall

First, we need to talk about Main Street Capital (MAIN), one of the best-performing BDCs out there … and one of the world’s most crowded trades.…
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3 Stocks With 30% Upside in Trump’s First Year

Brett Owens, Chief Investment Strategist
Updated: January 16, 2017

If you’re betting that President-elect Trump’s economic policies will ignite corporate profits—and share prices—I have two words for you: be careful.

In a moment, I’ll show you how I’m investing in the early days of the Trump era and name 3 rare finance-sector bargains that are terrific buys now.

First, let’s look at how much things have changed (and not) since Election Day, starting with the S&P 500, which has jumped 6.0%. However, most of that came in the first month: since December 8, it’s basically gone nowhere.

“Trump Bump” Hits a Wall
Trump-Bump-Hits-Wall

That leaves the market trading around 17.1 times forward earnings, according to FactSet, well above the five-year average of 15.1 and the 10-year average of 14.4.…
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5 Trump-Proof Pharma Dividends Up To 5.3%

Brett Owens, Chief Investment Strategist
Updated: January 15, 2017

Donald Trump needed just 20 minutes to knock $24.6 billion in value from the nine biggest Big Pharma companies. That was the statistic bandied about recently when the president-elect, at a much-anticipated press conference, declared that pharmaceuticals are “getting away with murder.”

That’s ironic, because investors targeting the sure-fire dividends of Big Pharma stocks might be able to get away with theft.

Trump hasn’t yet entered the Oval Office, but he’s already showing an uncanny knack for creating quick stock dips with just a sentence or two. For instance, in mid-December, he criticized the high spend for Lockheed Martin’s (LMT) F-35 jets, knocking LMT shares down by a few percent.…
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2 Unloved Buys for 4.2%+ Yields and Double-Digit Upside

Michael Foster, Investment Strategist
Updated: January 13, 2017

Inflation hasn’t been a problem for a long time. In fact, central banks around the world have been fighting deflation, as low growth, pessimistic expectations and slumping oil prices kept prices in check since the 2008/09 crash.

That’s changing, and more people—from economists to everyday consumers—see inflation heating up. That makes now a great time to buy into an asset class few investors pay attention to. I’ll explain why, and name two of my favorites, in a moment.

First, back to inflation: according to the New York Federal Reserve, consumers now expect prices to swell by 2.8%—the highest reading since the middle of 2015.…
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2 Big 8% Dividends to Buy (and 1 to Sell)

Brett Owens, Chief Investment Strategist
Updated: January 12, 2017

Not every high yield asset is in danger as rates rise. While some stocks paying 3% may feel the Fed’s pressure, there’s a higher subset paying 8% that should do just fine.

If you’re looking for dividends you can actually retire on, you should familiarize yourself with business development companies (BDCs). They tend to pay big yields because they are required by law to dish most of their profits back to their investors as dividends.

BDCs themselves are investment companies that provide funding to small- and mid-size companies (which typically have a difficult time acquiring funding from larger financiers). BDCs were brought to life in 1980 by Congress to spur U.S.…
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How To Make 12% Annually (Forever) From Stocks

Brett Owens, Chief Investment Strategist
Updated: January 11, 2017

“Efficient market” proponents are wrong – you can bank returns of 10%, 12% or more from stocks regularly.

But you need to ignore common Wall Street “wisdom” and follow a simple 3-step formula that I’ll outline for you in a moment.

Most individual investors don’t make anything close to 10% per year because they practice “buy and hope” investing. They pick up shares and root for them to appreciate in price. With no specific plan outlining how they are going to profit from their stocks, they are doomed.

Even “tangible” fundamental drivers like higher sales or profits are no guarantee that you will profit.…
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5 Funds That Crush the S&P 500 and Pay 9.3% Dividends

Michael Foster, Investment Strategist
Updated: January 10, 2017

I’m sure you’ve heard that you can’t beat the market. It’s the prevailing wisdom—and it’s why passive index funds are more popular than ever.

But by that logic, picking stocks is pointless. And actively managed funds? You’ll find no joy there, either, because most managers underperform … and charge you outrageous fees for doing so.

That pretty much leaves us with one option: stick all our cash in a low-fee passive fund like the Vanguard Total Stock Market ETF (VTI) and call it a day, right?

Wrong.

The truth is, there are literally hundreds of funds out there that have been outperforming the market for a long time. …
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3 “Dogs of the Dow” Paying Up to 4.3%

Brett Owens, Chief Investment Strategist
Updated: January 10, 2017

The “Dogs of the Dow” are back. And this year, the biggest dogs are not just generous yielders –  they’re cash cows with price upside to boot.

For the uninitiated, the Dogs of the Dow strategy is simply buying the 10 Dow Jones stocks with the highest yields, typically at the beginning of a given year. The basic premise is that, when it comes to blue-chip stocks, high relative yields are the best sign of value. They simply highlight firms at the weakest part of their business cycles.

Blue chip names are rarely cheap, which is why we only want to buy them when their businesses are in the tank.…
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5 Cheap Dividend Stocks to Grow Your Retirement Portfolio

Brett Owens, Chief Investment Strategist
Updated: January 9, 2017

By now, I bet you’re sick of “Best Stocks for 2017” articles.

That makes two of us.

So today, we’re going to take the long view, starting with a strategy you can use to steadily bulk up your nest egg—even if you’re 10 years or less out from retiring—and trigger a reliable income stream once you do.

Then I’m going to reveal 5 of my favorite dividend-growth retirement stocks to buy now.

“Wait a minute,” you’re may be thinking. “Aren’t dividend payers going to get crushed as interest rates rise?”

2 Keys to Beating Rising Rates

I have two answers to that.…
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Buy This 8.5% Yielder Now and Hold It Forever

Michael Foster, Investment Strategist
Updated: January 6, 2017

If you want to diversify, get high-quality dividend growth and avoid risky speculation, the SPDR S&P Dividend ETF (SDY) may seem like a no-brainer.

But buying this fund would be a big mistake.

Today I’m going to show you why … and help you avoid a couple other seemingly obvious moves that could steer you into big trouble in 2017. Further on, I’ll reveal a terrific fund to buy now and tuck away for two decades or more.

First, back to SDY, which has handily beaten the S&P 500 over the past decade:

A Long-Term Outperformer

SDY-10yr-Total-Return-Chart

At the same time, more dividends have been paid out, and SDY’s payout is now larger than the broader market’s:

A Strong Income Stream

SDY-SPY-Dividend-History-Chart

So why not just buy this fund and call it a day?…
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