This 10.4% Dividend Ticks Our 2 “Must-Have” Boxes

Brett Owens, Chief Investment Strategist
Updated: April 23, 2024

As folks who are always on the hunt for high-yield investments, we love 8%+ paying closed-end funds (CEFs).

CEFs, of course, are renowned for those high payouts—and the vast majority pay monthly. No “regular” stocks offer such a potent payout combo.

Best part is, many CEFs are on sale now: Of the 422 tracked by the CEF Connect screener, 372 currently trade at discounts to net asset value (NAV, or the value of their underlying assets).

That’s a great place to start our search for top-notch CEFs because a discount to NAV is basically free money: it lets us pick up, say, red-hot tech stocks like Texas Instruments (TXN), Amazon.comRead more

These Tax-Free Funds Are the Biggest Dividend Secret Going

Michael Foster, Investment Strategist
Updated: April 22, 2024

I have to admit, every year it gets harder and harder to do my taxes.

The process isn’t any more difficult—or at least if it is, my accountant isn’t saying! No, my problem is the money I end up owing.

Having to write a check to Uncle Sam for more than I earned in my first three years of working is hard to do. Which is why I’m always looking for ways to cut my taxes.

And really, the best way for me (and most likely you, too) is through a “boring” sounding investment called a municipal bond. There are three reasons why:

  1. Municipal bond, or “muni,” returns can amount to more than 9% per year for those in high tax brackets.
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Utilities Aren’t Boring with Yields up to 11%

Brett Owens, Chief Investment Strategist
Updated: April 19, 2024

Vanilla investors are freaking out that Jerome Powell & Co. won’t cut rates right away.

Who cares if we’re buying safe yields up to 11.0% like the three we’re about to highlight. This trio is positioned to benefit from an upcoming bull run in utility stocks:

“To be sure, long rates might hover around these levels for a bit. But the Fed’s rate hikes will eventually add up, and the much-talked-about recession will arrive. That will result in lower interest rates, both on the ‘short’ end (controlled by the Fed) and the ‘long’ (determined by the 10-year Treasury rate). As rates fall, the prices of bonds and ‘bond proxies,’ like utilities, will pop.”

Read more

This “Apocalyptic” News Is Our Shot at Cheap 7%+ Dividends

Michael Foster, Investment Strategist
Updated: April 18, 2024

It’s starting again—the media has its hooks into a new story to scare investors, in yet another effort to gain attention.

The upshot is that we’ve now got a very nice opportunity to pick up a special kind of closed-end fund (CEF) that yields 7%+ and does something unusual to limit downside.

This setup reminds me just a bit of 2022, when buying fear gave contrarians bargains, and historically high dividend yields, too.

The Media-Driven “Crisis” That Doesn’t Exist

Let’s start to trace out our opportunity here by first talking about the media, which I probably don’t have to tell you is more interested in getting an emotional reaction (mainly fear and worry) out of its audience more than anything else these days.… Read more

Protecting Our Retirement Portfolios During Times of War

Brett Owens, Chief Investment Strategist
Updated: April 17, 2024

I wish I didn’t have to write this column ever, let alone every couple of years. But this is ground we have to cover, like it or not: dividend stocks during war.

We invest in dividend stocks. There are wars and conflicts that affect our money. That’s reality.

Let’s start with last Saturday, while my daughter was in the middle of their monthly Girl Scouts meeting. I gulped at the headline on my phone: Drones heading towards Israel. Ugh.

So, on the drive to pick up my daughter, I flipped on the news in the Dadmobile. My sweety jumped into the car.… Read more

If This 1 Thing Changes, This 6.5% Dividend Will Be a Raging Buy

Brett Owens, Chief Investment Strategist
Updated: April 16, 2024

I’m this close to sending out a buy call on a stock that—if I do—I know would light up the phone lines (and customer-service inbox!) at our New York office.

There’s a good reason why: Imagine being along for this drop.

New “Watch-List” Addition Sheds Two-Thirds of Its Value

(Heck, given that this stock was till recently a staple of many dividend portfolios, maybe you don’t have to imagine.)

That’s the peak-to-trough dive on 3M Co. (MMM) in the last six years. To put it in perspective, it came as the broader S&P 500 gained 79%.

I know that buying—or even considering—a stock with a chart like this gives many folks heart palpitations.… Read more

These 9% Dividends Are Usually “Millionaires Only.” No More.

Michael Foster, Investment Strategist
Updated: April 15, 2024

It’s Tax Day—the perfect time to talk about one of our favorite income plays: municipal bonds.

Don’t listen to anyone who tells you “munis” are boring. They’re anything but: It’s easy to grab 5%+ yields from them. And because munis’ income is tax-free for most Americans, that 5% is worth more—in some cases a lot more—to us.

They’re stable, too. Consider how much better you’d have slept at night if you held munis during the 2022 nightmare, when they held up much better than stocks:

2022 Put Muni Bonds’ “Crash Resistance” on Display

Truth is, yearly declines of any sort are unusual for munis, which tend to deliver 5% to 6% annual total returns in the long run—and that’s before their tax benefits, which are, quite frankly, game-changing.… Read more

How to Buy Yields up to 12% for Pennies on the Dollar

Brett Owens, Chief Investment Strategist
Updated: April 12, 2024

As contrarians, we search for income stocks that vanilla investors hate. Today there are not many dividend deals left. No surprise, with the market levitating since last October.

But! When we expand our search to CEFland, we do find a few closed-end funds (CEFs) left at the bottom of the bargain bin. Today we’ll discuss five that pay between 5.7% and 11.7% and trade at discounts between 12% and 18%.

In other words, these five CEFs trade for 82 to 88 cents on the dollar. Let’s explore whether each dividend is “cheap for a reason.”

General American Investors (GAM)
Distribution Rate: 5.7%
Discount to NAV: 18.4%

General American Investors (GAM) is a straightforward large-cap CEF that holds “companies with above-average growth potential.”… Read more

These 8% Dividends Are Due for a “Delayed Reaction” Surge

Michael Foster, Investment Strategist
Updated: April 11, 2024

There’s no sugarcoating it: As I write this, our favorite high-yielding income plays—closed-end funds (CEFs)—are lagging behind “regular” stocks.

But that doesn’t mean I’m opening this article on a sour note. Truth is, this underperformance is good news for us, as these unloved (and cheap!) 8%-payers are long overdue for a “snap back” to normal.

The result is a (likely short-lived) buying opportunity we’re going to break down now—especially as it relates to the 6.7%-paying Adams Diversified Equity Fund (ADX), a core holding (and buy recommendation) of my CEF Insider service.

But let’s start with that performance lag.

CEFs Get Caught in Stocks’ Wake

Source: CEF Insider

Over the last year, CEFs focusing on stocks (measured by the performance of our proprietary CEF Insider Equity Sub-Index) have returned 8.9% as of this writing, well below the stock market’s 28.5%.… Read more

How a 1% Dividend Equals 68% Yearly Gains

Brett Owens, Chief Investment Strategist
Updated: April 10, 2024

Not sure about buying and holding stocks right now?

Me neither. The market is pricey. Meanwhile, the potential downside looks dicey. Mr. and Ms. Market seem fixated on rate cuts this year from the Federal Reserve. If we don’t get them, look out!

We may not see rate cuts in 2024 if inflation continues. And right now, crude oil prices are popping. Consumer prices are unlikely to cool while oil is high.

But, on the other hand, the Fed is engaging in quiet QE. Gold has sniffed it out and rallied. Bitcoin, too, is going bonkers.

Cash is destined for the trash bin if the market continues to defy gravity and levitate higher.… Read more