Articles

Vanilla investors are selling. Which means we income-focused contrarians are buying.

Our goal, after all, is to retire on dividends. So why would we run from the biggest dividends that Mr. and Ms. Market have presented us in years?

Yields, yields, yields. We recently discussed 29 income funds yielding more than 8%.

How about stocks? Glad you asked. Let’s chat about 16 sweet large-cap cash-machine stocks paying up to 15%.

If you didn’t catch it, I recently chatted with Moe Ansari on his Market Wrap program. You can read more about it here, but in short, I said the time to sell was over—we’re flush with cash and ready to buy.… Read more

The Vanguard Dividend Appreciation ETF (VIG) is the largest and most popular dividend ETF on Wall Street. It boasts an amazing $60 billion in assets under management, and holds about 300 of the largest dividend stocks.

And it yields a miserable 2.1%.

That’s because, like many index funds, VIG weights stocks by size. That means companies like $450 billion drugmaker Johnson & Johnson (JNJ) and $1.8 trillion Big Tech icon Microsoft Corporation (MSFT) alone represent about 7% of the portfolio – even though they pay relatively light yields of 2.5% and 1.1%, respectively.

The false promise of index funds like the Vanguard Dividend Appreciation ETF is that you can “set it and forget it.”… Read more

It’s nearly 2023, and we’re on the precipice of something that’s never happened in our lifetimes: a recession is coming—and when it does, it will surprise no one.

Believe it or not, that’s good news because it lets us buy stocks—and high-yield closed-end funds (CEFs)—cheap right now. We don’t have to wait months for the recession to subside.

I’ve got an 8.4%-yielding CEF for you to consider below. It’s discounted twice: once because the stocks it holds, which include S&P 500 standouts like Visa (V), UnitedHealth (UNH) and Amazon.com (AMZN), have sold off, and second because the fund itself trades at a rare discount.… Read more

The Bank of England has recently aroused financial animal spirits with its on and off and on again buying of long-dated bonds. Which has this 8.8% payer—and more like it—ready to rally like crazy.

But wait, isn’t this a bear market? Brett, the financial media is telling me that interest rates are going to the moon. And that my cheap bonds are about to get even cheaper.  

They don’t call us contrarians for nothing! It’s our job, as original thinkers, to identify inflection points in the market. And we have one that is setting up for a big bond bounce.… Read more

Utility dividends haven’t been this generous in years. Thank you, stock market selloff!

These yield machines have been expensive for a while. Today, utility stocks are finally cheap—and their dividends are finally high enough to get our attention!

That makes right now our time to buy. The Federal Reserve created this deal, and hey, the Fed could easily take it away with any hint of a policy pivot.

History tells us that cheap utility stocks don’t stay in the bargain bin for long. I’m staring at two in particular that are likely to bounce back next year. Both of these stocks are likely to deliver double-digit payout hikes, too.… Read more

These three little-known funds yield up to 13.5%—and their payouts are actually safer than they’ve been in years, thanks to the Fed-induced selloff.

Now is the time to buy them. Patient investors who do so will be nicely set up for annualized returns north of 14% in the long run, with most of that gain in dividend cash!

These three timely buys—all closed-end funds (CEFs)—are winners now because they let us buy stocks (and real estate, in the case of one of the funds we’ll discuss below) at a rare double discount: one discount on the CEF itself and another because investors have oversold many of the investments these funds hold.… Read more

I love dividend stocks that analysts hate. For two reasons:

1. By definition, they can’t be downgraded.
2. In weak moments, they are candidates to be upgraded.

And since vanilla investors, for whatever reason, listen to analysts, upgrades can provide a nice “pop” in the stock price.

So give us the stocks that can only “fall out of the basement window”—yielding a fat 14.6% on average—that carry this ultimate contrarian indicator:

They’ve lost the typically rosy analyst community. Which means it’s time for us to find them.

Does Wall Street Say “Sell”? That’s a Big “Buy” Signal

Wall Street’s “pros” are an optimistic bunch.… Read more

No investment portfolio moves up in a straight line. But in a fast-changing environment like this one, it is important for investors to do their best to limit volatility as much as they can by a focus on high-quality, low-risk stocks.

Too bad most investors are obsessed with chasing fads, though.

First, it was the outperformance of energy stocks in early 2022. Now it’s the resurgence of select biotech stocks that have snapped back 20% or 30% in just a few weeks. And undoubtedly, it will be something else with even more hype behind it by Christmastime.

The problem with fads is that you can almost never predict how long they will last, or what will come next.… Read more

A recession is on the way—and stocks are … rallying? It makes zero sense on the surface, but there is good reason for the bounce we’ve seen this week. And we’re going to play it with a 7.3%-paying fund that’s set to roll higher with a recovering market.

No, we’re not talking about an index fund like the SPDR S&P 500 Trust ETF (SPY). My colleague Brett Owens calls SPY “America’s ticker” for good reason: pretty well everyone owns it!

Instead we’re going with a fund that pays us a 7.3% dividend today. That’s more than 4-times SPY’s meager 1.7% payout.… Read more

This dividend stock yields 10.4%. But really it boasts an annual “hidden yield” of 18.4% when we consider buybacks.

Eighteen-point four percent per year. Wait, what?!

(Your strategist pauses to point upwards towards the late, great Norm Macdonald.)

A Hidden Yield Formula for 18.4% Yearly Returns

Now what if I told you this stock was also being heavily shorted? Over 11% of this company’s outstanding shares are being sold short. This is fuel for a potential rally because these positions must be bought back later.

Remember, when traders sell a stock short, they book the sale in advance. “I think this stock is so terrible, I want to sell it at today’s price.”… Read more