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Statistician and trader Nassim Nicholas Taleb published his book “The Black Swan: The Impact of the Highly Improbable” in 2007 – just months before the global financial crisis and Great Recession hit full swing. In this, and in other writings, he explores the importance of preparing for the unexpected.

After a brutal year or so on Wall Street, I recently went back to Taleb’s works. They offer some very important lessons on resilience and risk, and I highly recommend them.

But since most people prefer simple, real-world examples to a homework assignment, let me give you the Reader’s Digest version – using tobacco giant Altria Group Inc.… Read more

I get a lot of readers asking me when this market will bottom. We don’t know for sure, of course, because market bottoms are only visible in hindsight. But I would say that now is a good time to buy dividend-paying stocks—especially if you use dollar cost averaging (DCA), which you probably used to build your portfolio.

DCA (or buying a fixed amount on a fixed date throughout the year, say) is particularly effective for high-yield CEFs, which are, of course, our beat at my CEF Insider service.

That’s because of these funds’ above-average dividends and deep discounts to net asset value (NAV, or the value of the stocks in their portfolios).… Read more

Why would anyone want to pay full price for a stock?

Many common tickers can be bought for 5%, 10% and even 12% off in the closed-end fund (CEF) aisle. These discounted CEFs are the closest thing to a free lunch we have on Wall Street. And most investors don’t know about them because, well, they don’t read enough Contrarian Outlook!

CEFs are unique vehicles. They are one of the last corners of the stock market with a sweet inefficiency. Unlike their mutual fund and ETF cousins, CEFs have fixed pools of shares. Which means they can trade at premiums and discounts to the values of their underlying assets.… Read more

These days, everyone is looking for safety—and that’s got some folks pondering some pretty, er, unusual strategies that seem secure but are in fact anything but.

One such strategy is known as dividend capture, which sounds like a way to bag a company’s quarterly cash dividend without taking the risk of owning the shares. I don’t like the name because it sounds like something we dividend investors should be interested in. I don’t like the approach itself because it doesn’t really work.

The theory seems innocent enough:

1. Find a stock that is about to pay a dividend,
2. Buy it before it’s “ex-dividend date,”
3. Pocket the payout, and
4. Sell the shares after.

When oil spikes, like it has in recent months, many folks get tempted, wondering if there’s a way to time their way into—and out of—crude for maximum profits and dividends.

Unfortunately, timing markets is tough—especially the oil market, which is global and highly complex. Heck, the experts have trouble doing it! Consider this chart:

Bloomberg analysts looked at how the price of energy commodities trended over the last 20 years and how an index of energy-related investments performed over the same period. They found that professional investors whose job is to turn changes in commodity prices into cash profits had a hard time doing so.… Read more

Last week, I shared with you one of my top picks right now in pharmaceutical giant AbbVie (ABBV). The stock has tripled its dividend in about 10 years and is one of the rare investments that’s actually up in an admittedly rocky 2022.

And the week before that, I detailed another “MVP” stock in Stellantis (STLA). This automaker is plotting big cost-savings after a recent merger, currently delivering more than 5X the yield of the typical stock in the S&P 500.

This time around I want to share with you another recommendation, megabank JPMorgan Chase (JPM). This financial stock also exhibits the three must-have factors I look for – strong management, attractive value and generous payouts – but has recently been making headlines after earnings that make this trade a bit time-sensitive.… Read more

Today we’re going to look at how we can play the market’s “fear gauge”—known as the VIX, for a 7.5% dividend that’s as steady as they come.

As you can guess, the VIX has been on the rise this year as the Fed-induced market selloff has deepened:

Fear Gauge Rises. A Plus for Our Dividends?

You can’t outright buy the VIX, and even if you could, you wouldn’t get any dividends from it. But there is an asset class that uses the higher volatility the VIX is showing us to generate extra cash, resulting in a higher (and safer) income stream for you: closed-end funds (CEFs) that sell covered-call options.… Read more

Welcome back to Contrarian Outlook, the only dividend research service focused on 6% weekly returns.

What a formula! Wash any 2022 losses away with this swift “6% every seven days” solution.

I kid, of course. This rate of return, while not sustainable, sure is nice when it happens. Especially in a dumpster fire market like this one.

So thank you, UnitedHealth Group (UNH)! In these pages last week, we called out UNH as a recession-resistant stock because the health carrier is always growing EPS at a 10% annualized rate.

Thanks to these profit gains, UNH’s dividend has been doubling every few years.… Read more

Buying into companies that split their stocks tilts the odds sharply in your favor—and buying a “splitter” that grows its payout will help you do even better.

Today we’re going to look at how you can “front run” the next dividend split for fast share-price (and dividend!) growth.

“But wait,” you’re probably thinking. “Aren’t share splits meaningless when it comes to the stock’s overall value?”

True! Let’s look at the case of Amazon.com (AMZN), which performed a share split last month. After the close of trading on Friday, June 3, the company divided each of its shares (which closed at $2,447 that day) into 20 pieces, so the stock opened at $124.79 on Monday, June 6.… Read more

When it comes to high-yield closed-end funds (CEFs), I’m a big fan of the “three Ds”: discounts, diversification and—of course—dividends!

These days, a “3-D” portfolio is a snap to put together, with CEF dividends at multi-year highs and oversold discounts everywhere across the asset class.

Below, we’ll look at a three-fund, bargain-priced “3-D” CEF portfolio you can buy today. It yields 8% now and gives you the diversification you need to reduce your volatility—and collect your payouts in peace.

I know that preaching diversification at a time when bonds, stocks and everything else is down might sound a bit outdated, but over time, this time-tested strategy always pays off.… Read more