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Here’s the surest, safest way to double our money in any kind of market. This works whether we’re comparing 2019’s roaring bull run or 2022’s blabbering bear:

Buy the dividends that are growing the fastest.

Over long time periods (months to years), stock prices follow their dividends. For better or for worse! It’s that simple.

When a company cuts its payout, its stock price drops. On the other hand, firms that raise their dividends year after year enjoy steady annual gains. This is thanks to a financial phenomenon I call “the dividend magnet.”

The Dividend Magnet

Dividend growth is a one-two-three combo for income investors.… Read more

I was doing some investment research yesterday, and found myself sifting through a list of the best-performing investments of the 2022 so far. Perhaps unsurprisingly, they’re all incredibly aggressive instruments – arcane cryptocurrencies, 3X leveraged oil ETFs and the like – that rely on luck as much as anything else.

Anyone looking for proof that past performance is no guarantee of future returns, look no further than that list.

A single Millennial with just a few thousand bucks in their account may not be afraid of these incredibly risky bets. But that’s just because they haven’t learned their lessons yet.  Veteran investors know that for every trade generating instant gains … there are hundreds of others that cause instant regret.… Read more

These days, everyone is on guard for a recession. And the inverted yield curve is only adding to those fears.

Sure, a recession may be in the offing, but I don’t see one starting anytime soon. I don’t know about you, but I’ve never seen a recession hit when corporate profits are soaring like they are today—up 40% from pre-pandemic levels and forecast to keep rising:

Source: Wells Fargo Economics

This “profits-up, stocks-down” dynamic (the S&P 500 is still down about 4% from the start of the year as I write this) makes now a good time to buy, particularly if you’re doing so through my favorite high-yield investments: closed-end funds (CEFs), like the one we’ll discuss below.… Read more

Floating-rate bonds are supposed to be sailing right now.

So why are they sinking?

Last week we lamented the reason most bond funds are down this year. The runaway long rate is to blame.

Ten-year Treasury bonds began the year yielding 1.5%. Now, they pay 2.4%, a whopping 60% more in a quarter!

Nobody wants the 1.5% vintage when they can “level up” to 2.4%. So the old 1.5% bonds, while still paying their coupons, lose value.

So do funds that own Treasuries. The iShares 20+ Year Treasury Bond ETF (TLT), one of the most popular bond tickers on the planet, is down 10% year-to-date.… Read more

In just over a month, the script has flipped for us dividend investors: Russia’s war on Ukraine has cleaved the world into two teams: east vs. west.

Some pundits have dubbed it Cold War 2.0. But whatever you call it, I think you’ll agree that the risks in this new arrangement are higher for us: we’re likely looking at another pop in the inflation rate, for one, due to (seemingly) never-ending supply-chain issues.

So it follows that Fed Chair Jay Powell will probably hike interest rates further than he otherwise would have as he tries to fix those supply-chain problems by making borrowing more expensive (if you can follow the logic there, please let me know, because it beats me!).… Read more

Today we’re going to dive into a three-fund portfolio that throws off a massive 9.7% dividend yield and that payout is backstopped by stocks everyone knows well.

With a dividend like this, $500k invested gets you more than $4,000 in monthly income!

Big Income from the Big Three

While you might be suspicious of a 9.7% yield (and rightly so!), these three funds are solid. Their combined holdings are built on large caps like Amazon.com (AMZN), Visa (V) and Microsoft (MSFT). 

They then add in fast-growing tech plays like Bill.com Holdings (BILL), a maker of back-office software for small and medium-sized companies, which is up 500% over the last five years; and chipmaker Monolithic Power Systems (MPWR), which has gained 443% over the same period.… Read more

Inflation is a portfolio killer for fixed income investors. And in 2022, with surging prices on gas and electricity and food, many folks are feeling the pain.

According to the latest data, price inflation in the U.S. hit another four-decade high in February as prices surged 7.9% compared with the prior year. And since that’s February data, before global Russian sanctions came down hard and disrupted commodity markets further, that’s a very bleak sign indeed.

What’s more, once-loved dividend darlings like Energizer Holdings (ENR), Clorox (CLX) and Ford (F) are all down 20% or more so far this year – while long-term bond funds like the iShares 20+ Year Treasury Bond ETF (TLT) are down 10% or more since Jan.… Read more

Volatility is high, stocks are shaky and there’s a major land war in Europe. So we’ll take a pass on the highflyers, thanks.

Give us the monthly dividends instead.

Of course, easy enough for us to say. We “retire on dividends” folks have spent years building up a nest egg that would last us forever. Now, it’s time for us to turn this pile of cash into cash flow.

I’m talking about dividend payers that will keep on paying no matter what happens around the world. We’ll discuss some elite monthly dividend payers in a moment—the types that will dish us 9.8% per year, paid every 30 days.… Read more

With the press bleating about the yield curve inverting (again!) and scaring everyone with recession talk, we dividend (and particularly closed-end fund!) investors need to talk strategy.

I’ll drop a ticker that’s perfectly suited for these weird times in a second. First, let’s dive into what the inverted yield curve is—because it actually sets up a nice buying opportunity for us.

The “yield” in “yield curve” refers to the yields on the 10-year and 2-year Treasury notes. In normal times, the 10-year yields more than the 2-year, but in recent days, that gap has shrunk to nearly nothing:

2-Year Yield Reels in the 10-Year: Recession Ahead?… Read more

“C’mon daddy.”

Pause. And a sigh.

“I’ll pay you back?”

Ah, there it was. The fiscal responsibility we’ve been working to instill in our seven-year-old clicking in. An acknowledgement that money does not grow on trees.

(Everyone knows that greenbacks only grow on the Federal Reserve’s balance sheet!)

My daughter’s intentions were sweet. She had successfully lobbied to reroute the “daddy bus” to a boutique retail store. The young boss had her eyes on a toy, and offered to buy one for her sister, too.

Well, I should clarify. Initially she offered me the opportunity to purchase both. Your income strategist offered a compromise:

“How about you pay for your own.… Read more