Articles

The Best, and Worst, Junk Bond Funds (Paying Up to 10.2%)

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

Junk bonds can be a great source of retirement income, or a terrible idea altogether. It depends what you buy, and really, which managers and vehicles you entrust to find value in the bargain bin.

There’s a right way to do it, and a wrong way. Let’s start with the latter, led by the popular iShares iBoxx $ High Yield Corporate Bond ETF (HYG) and SPDR Barclays High Yield Bond ETF (JNK) – the two largest junk bond exchange-traded funds (ETFs), and both top-10 fixed-income ETFs by assets under management.

You and I can do better than these dumb ETFs. They are popular thanks to their low fees.…
Read more

The Top 4 CEFs on My Personal Watch List

Michael Foster, Investment Strategist
Updated: September 14, 2017

If you’ve been reading my CEF Insider service or my weekly articles on Contrarian Outlook, you know I don’t go near a closed-end fund unless it hands us two things:

  1. A fat, sustainable dividend
  2. A big discount to net asset value (NAV, or the value of its underlying assets)

Today I’m going to show you 4 CEFs that give us these two things in spades, with safe dividend yields up to 8.2% and ridiculous discounts either at or near double digits! (If you’re unfamiliar with CEFs, click here for a quick overview of these exciting high-yield investments).

So if you’re looking to bag solid dividends up to 8.2% at a nice discount (and who isn’t?), read on!…
Read more

One Click for Safe 7%+ Real Estate Yields

Brett Owens, Chief Investment Strategist
Updated: September 13, 2017

Many retirement experts pitch real estate as the best way to bank monthly income. But do you really want to chase down rent checks and fix broken light bulbs?

I don’t. And I imagine, since you’re reading this, that you prefer your passive income to actually be passive as well.

Fortunately there’s an easier, and better, way to invest in real estate without actually playing the role of landlord. From the convenience of our brokerage accounts, we can buy real estate investment trusts (REITs) and collect truly passive income of 7%, 8% or better.

How to Collect 7%+ Rent Checks Without Playing Landlord

REITs trade like stocks, which means buying them is as easy as punching in a ticker symbol.…
Read more

Swap Your ETFs for These 6.3%+ Dividends

Michael Foster, Investment Strategist
Updated: September 12, 2017

Fee-obsessed investors continue to pile into exchange-traded funds (ETFs).

Don’t follow them.

Because there’s another—much less popular—group of funds that will hand you much better returns (and double the dividend payouts). And swapping your ETFs for them is easy.

I’m talking about closed-end funds (CEFs). (If you’re not familiar with CEFs, click here to check out a primer I recently wrote on them.)

Now even though I just said CEFs are less popular than ETFs, that doesn’t mean they’re totally ignored. The truth is, they’re getting more attention from investors of late, for reasons I’ll dive into in just a moment.…
Read more

3 Tired Dividend Aristocrats You Must Sell Now

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

If you put your portfolio on autopilot over the summer, you need to dial back in yesterday.

Because you’ll need a sharp eye and a quick hand to dodge two pitfalls that could swamp regular folks now—this month!—and in the long run.

For the first one, look no further than the calendar.

I’m talking about seasonality, and the fact that September is typically the worst month for stocks.

The truth is, the market’s steady grind higher has stalled: through the first 5 trading days (and with 15 more to go), the Dow is off 0.8% and the S&P 500 is down 0.4%.…
Read more

3 Blue Chips That Are In for a Rude Awakening

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

A bull market that’s already long in the tooth is staring political and even natural headwinds right in the eyes. Valuations are stretched. And even some of Wall Street’s biggest names – three of which I’ll warn you about today – are increasingly looking vulnerable to massive pullbacks should the market buckle under pressure.

(I’ll also give you seven dividend growers with 100%+ upside to buy instead later on.)

Mother Nature is pulling the emergency brake on Hurricane Harvey, which hovered over Texas for days, delivered what some experts estimate is between $150 billion and $180 billion in damages. One estimate of $190 billion would translate into a -1% hit to the U.S.…
Read more

3 BDCs Paying 10%+: 2 Hopefuls, 1 Hopeless Wreck

Brett Owens, Chief Investment Strategist
Updated: September 8, 2017

Business development companies (BDCs) are dividend powerhouses that typically yield anywhere from high single digits to low double digits. And in fact, the group of three BDCs I’m going to show you today each throws off a yield of more than 10%!

But most investors – even income-seeking folks – aren’t familiar with them. If that includes you, or you’re just looking for safe 10% yields or better, read on.

BDCs were created in the 1980s by the U.S. government to help small- and midsize businesses finance their growth – via debt, equity and other financing. And by doing so, they also help create American jobs.…
Read more

8 Tax-Free Dividends You Can Buy Now

Michael Foster, Investment Strategist
Updated: September 7, 2017

America’s richest investors are earning reams of tax-free income from an investment most people ignore, and today I’m going to let you in on it.

In fact, it’s hardly a secret at all. It’s just sitting there, in plain sight. And it’s very popular with the multi-millionaires and billionaires among us for one reason: as their investments throw off an ever-rising stream of dividends and capital gains, these folks get bumped into higher and higher tax brackets.

That hardly seems fair—and it feels like double taxation. But that’s how the tax system works. And this is where these dull-as-dishwater investments come in.…
Read more

Buy This Dip for 160% Dividend Upside

Brett Owens, Chief Investment Strategist
Updated: September 6, 2017

These shareholder-spoiling stocks regularly double or triple their investors’ money. They’re a bit underappreciated, but not often on sale – unless you buy them this time of year.

And on cue, right now they’re as cheap as they’ve been in 12 months.

If insurance is a great business, then reinsurance is a fantastic one. (Reinsurance is insurance purchased by insurance companies to manage their own risk exposure.)

Insurance itself, when done responsibly, is a cash cow. Firms collect payments up front from their customers but may not have to pay it out in claims for a long time, if ever. The companies then invest that money – called “float” – and pocket the income they earn.…
Read more

How to Get Safe 6.5% Income From Municipal Bonds

Michael Foster, Investment Strategist
Updated: September 5, 2017

Wall Street says you have to settle for the pathetic 2% yields most folks scrape by on from 10-year Treasuries, or your typical S&P 500 stock.

Don’t believe them.

Because there’s a far better way to bankroll your retirement that they won’t tell you about: municipal bonds.

While their name sounds boring, that’s the last word I’d use to describe the income they throw off: “munis” pay dividend yields of 5% and often much more, thanks to a unique tax advantage.

In fact, the 3 off-the-radar plays I’ll show you below can let you pull a steady (and safe) 6.5% out of some of the safest muni bonds out there.…
Read more