Articles

Today I’m going to show you a two-part dividend-growth strategy that actually made money for one group of investors in the disastrous year that was 2008.

Before we get into the specifics on this technique and an example stock, I want to level with you: I do believe that stocks are likely to head lower in the coming weeks.

That said, if we look one year out from today, I like our chances. But we’re going to give ourselves an added level of security by purchasing stocks with these two traits:

1. Strong—and better yet accelerating—dividend growth, because a rising payout is the No.

Don’t lament the lack of a Santa Claus rally this year, because it comes with a bright silver lining: we dividend investors have more time to pick up big yields on the cheap.

Here’s why: America’s economy is still growing, with analysts booking forecasts for 3.7% earnings growth in the fourth quarter of 2022. What’s more, sales for S&P 500 companies are up 10%, and earnings have been rising all year.

Yet the market is still downbeat.

In other words, share prices are divorced from reality, and it’s only a matter of time before they correct. However, given the year we’ve had, it could still be a while before investors develop an appetite for stocks again.… Read more

Ten percent dividends are no joke.

We’re talking $50,000 in annual payout income on $500K. Or $100,000 in yearly dividends on a million dollars.

This is serious cash flow. And best of all, we’re talking yields—which means, if we buy right, we can sit tight, collect these payouts and keep our nest egg intact.

Generous yields give us a big advantage over vanilla investors, who fawn over traditional blue chips (paying 2% to 3%). That’s not enough. It’s easy math.

Let’s reference the million-dollar portfolio again. If we invest in the “broader market,” the S&P 500 yields 1.5%. It’s proxy, the SPDR S&P 500 ETF Trust (SPY), pays a meager $15,000 in annual income.… Read more

If you made money investing in oil this year, congratulations! But I have a warning: now is the time to take profits—especially if you hold the two oil funds we’ll discuss below.

Before we get to those, let’s talk a little more about oil’s big year. If you bought earlier in 2022, you managed to pick up on the only sector in the green this year—and well into the green, too: the Energy Select Sector SPDR ETF (XLE), a good benchmark for oil stocks, has climbed 55% so far in 2022, while the S&P 500 has headed the other way, dropping some 20%.… Read more

Let’s book these 104% profits today.

We’ll sell this winner and then consider a 9.3% dividend that could really soar in 2023. It couldn’t be any cheaper, either—this high-quality fund is trading at a 17% discount to fair value!

But wait, there’s more in the bargain bin. I’ll also share a 5.9% payer that is, likewise, trading for just 83 cents on the dollar—also 17% off!

More on these incredibly cheap dividends in a moment. First, the winner.

Remember when we “pounded the table” on Exxon Mobil (XOM) in April 2021? We were right. The then-6.1% payer was too cheap!… Read more

We dividend investors know that 2023’s going to throw us some curveballs. So let’s talk about a simple strategy that helps us buy more shares of our favorite stocks during pullbacks.

Because the truth is, the Fed is still hiking, inflation is well north of 2% and the economy is humming along. That last point is a headache for Fed officials as they need to “cool” the economy to get inflation down. That’s code for inducing a recession.

A New Spin on a Classic Strategy

This uncertainty is why I’m counseling caution when it comes to buying stocks these days. But if you are tiptoeing into this market, only do so if:

• You have a long time horizon and …
  

• You do so gradually, using our “modified” dollar-cost averaging (DCA) approach.

Today we’re going to delve into a powerful strategy that can “convert” the bounce we’re seeing in the bond markets into a cool $100K income stream in retirement.

Best of all, this simple approach can help you do this without touching a penny of your nest egg.

Obviously, doing this with a savings account is impossible; as per the chart below, you’d need $10 million to produce that yearly $100K if your account earns 1%. And we all know that most savings accounts offer far less these days.

Source: CEF Insider

The key, then, is to push our yield higher while managing risk.… Read more

A dividend hike is the ultimate sign of dividend safety. It’s also the surest, safest way to “get rich soon-ish” in stocks.

Find me stocks that are raising their dividends quickly and regularly, and I’ll show you some stocks that are doubling every few years.

What drives the dividend? Well, the likelihood that a company is going to raise its dividend (or cut it) is directly related to its payout ratio, or the percentage of its profits that it is dishing out to shareholders as dividends.

As a rule of thumb, a payout ratio below 50% is a sign of dividend safety.… Read more

When it comes to low-risk, dividend investing, many investors prefer dominant megacaps like Johnson & Johnson (JNJ), Apple (AAPL) or Microsoft (MSFT). That’s mostly because they subscribe to the notion that these stable corporations will be here many years from now.

That may be true. However, stability alone doesn’t count for much. A good dividend stock has to have… well, good dividends.

And the sad reality is this trio of big-name stocks offers a meager dividend that averages less than 1.5%.

That’s just table scraps. Just consider that recent survey results show that Americans on average think they need $1.25 million to retire comfortably… But even with that substantial nest egg, you would generate just $18,750 if you invested in these three stocks.… Read more

Good news: this dreadful year has created the conditions for a nice market bounce in 2023. And we CEF investors are in a nice position to capitalize with 9.8% dividends and potential 38%+ total returns next year.

I’ll name three closed-end funds (CEFs) with discounts big enough to deliver that potential 38%+ gain below. All they need to do is return to their “normal” valuations, and chip in just a touch of upside from their portfolios, too.

For starters, though, I’ll tell you that 9.8% is the average yield on the portfolio of my CEF Insider service. And that’s just the average.… Read more