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Cough. Cough. “This latest variant is legit,” I sputtered to my wife.

This was a school year and a half ago. The kids were home sick—again. Our little super spreaders had kindly brought home the latest coronavirus model.

Or so I thought. We soon learned it was Respiratory Syncytial Virus (RSV) going around town. RSV is highly contagious and, while the Internet lists its symptoms as mild, it wouldn’t be my choice for our next family illness. RSV lingers like an out-of-town relative without a return flight.

Generally, RSV runs its course. But it’s nearly impossible to avoid unless you avoid people—which may or may not be an option.… Read more

There’s a crop of outsized dividends out there that are absurdly underpriced—I’m talking 14%-off discounts here. And our opportunity to pounce has arrived.

I’m talking about municipal bonds, which, like corporate bonds, look set to bounce as the economy slows and interest rates top out—then start to move lower. As rates ease off, bond yields will dip, putting a lift under bond prices (as yields and prices move in opposite directions).

The upshot? AI-powered NASDAQ stocks will lose their luster, and bonds and bond proxies—including utilities and “munis”—will likely be the darlings of 2024.

Heck, even a modest decline in rates would be enough to boost these assets.… Read more

Over a decade ago, closed-end funds (CEFs) helped me achieve financial independence. Since then I’ve seen hundreds of other people use them to get there, too. I’m certain these unloved funds—payers of 8%+ dividends—can help you do the same.

Well, I shouldn’t say “unloved.” “Misunderstood” is more accurate.

As I write this, the CEFs tracked by my CEF Insider service yield 8.3% on average. But because the CEF market is small and off the radar to most folks, many don’t know what to look for in these high-yielding funds—if they know about them at all.

Today we’re going to change that by looking at a couple common mistakes people make when choosing CEFs, and how these errors can lead them to miss out on 8%+ yielders that offer sustainable payouts and strong gain potential, too.… Read more

Real estate investment trusts (REITs) are dirt-cheap—but hurry if you like dividends. These generous payers may not be in the bargain bin for much longer.

REITs tend to trade opposite long-term interest rates. The ever-rising 10-year Treasury yield has been a big headwind for these stocks.

But all rising rate periods eventually end in recession. Which brings falling rates. Which hurts stock prices—unless you like REITs.

REITs trade more like bonds than stocks, so they tend to hold up well in recessions. Their dividends, ignored during AI bubbles, come back in vogue as easy money dries up.

So here we go—bargain city!… Read more

It’s back to the 1980s in the corporate-bond world—with yields through the roof. (I’m talking safe 9.9%+ payouts when we buy bonds through high-yielding funds like the one we’ll delve into below.)

If you were investing back then, you may recall that bond yields soared well into double-digit territory before falling back to earth:

Source: Economic Report of the President (2012), Government Printing Office

In other words, if you bought a corporate-bond fund in 1981, you’d have gotten a 14.2% return every year for the bonds’ duration, which in some cases was a decade. And you’d have gotten that return in cash.… Read more

Three years ago, I wrote to you from the La-Z-Boy in my kids’ room. Which wasn’t unusual. We were all stuck at home staring at whatever immediate family we were sheltered in place with. It was April 3, 2020.

(Ah, 2020. Family walks were the highlight of the day. Our investment strategist—and survivalist father—took no chances when leaving the house. Here’s one from the archives that recently resurfaced on my wife’s phone…)

Six packs in a stroller? The norm. What was unusual was the content of the note I penned to you before the big walk. Favor Stocks Over Bonds was the topic, strange coming from a guy who writes about bonds for a living.… Read more

I know it’s only August, but I’m ready to make my first “dividend prediction” for 2024: utilities—especially growth utilities—will surge.

That means now is the time to dust off our parents’ playbook and grab these rock-steady payers before the mainstream crowd comes around. When they do, it’ll be goodbye NVIDIA (NVDA) and hello Consolidated Edison (ED)—one of the three stocks we’ll discuss below.

The Coming “Rate Rollover” Just Got Moved Up

We’re bullish on utilities now because this economy is bogging out. We got more proof of that last week, with China posting an anemic 0.8% growth rate in Q2.… Read more

It’s prime time to grab two bond funds tossing out 8%+ dividends now—and we have the Fed (of all things!) to thank for this opportunity.

Last year, as we all know (too well), the Fed raised interest rates at the fastest pace in history, bringing them to their highest point in nearly 20 years. As a result, many corporate bonds (represented by the red line above) are yielding a lot more than they used to.

Take, for instance, two bonds from Apple (AAPL), one issued in August 2020 (when the world looked a lot more precarious than it does today, as we still had an unresolved pandemic worldwide) and one issued in May 2023.… Read more

As contrarian investors, we have no desire to buy the stock market while it’s hot. We wait for it to cool off. And cooling off it is.

Three weeks ago, I warned that NVIDIA Corp (NVDA) was pricey. On cue, the stock sank 10%!

It’s since bounced, but I’m not sure the bottom is in for this bubbly darling. More tears are likely.

So what to buy instead? I’m intrigued by stocks that have the ability to soar while the broader market sinks. That’s a strategy we employed previously with semiconductor maker Texas Instruments (TXN).

Below is a chart of TXN’s performance over the last decade.… Read more

I just read one of the best articles on personal finance I’ve ever seen.

The piece, titled “I Saved Too Much for Retirement: What I Wish I’d Done Instead,” by Martin Dasko and published on Yahoo Finance, warns of a very real danger: “If you save too much for retirement,” Dasko writes, “you could find yourself missing out on your best years, and even end up with a higher tax liability when you stop working.”

Of course, the article also says that it’s better to overprepare financially and warns of how difficult it is to retire on your own (“hire a professional!”… Read more