Articles

When markets are down, there’s one group of investors who can shrug off the dip because they don’t need to sell. You’re no doubt part of this group—I’m talking about income investors.

With dividends, of course, you can keep your cash flow going regardless of short-term panics over things like interest-rate hikes and geopolitical unrest. Because the cash keeps coming in, you don’t need to sell during these times and can instead use your dividends to keep your bills paid—or maybe even buy the dip in the markets, thereby building your income stream further.

But where can you get reliable income that won’t be hit by the Fed’s moves and other events that are mostly beyond our control?… Read more

The point of a bear market is to bring price-to-earnings (P/E) ratios back down to earth. Preferably into single digits.

I like P/Es under ten because it means that the company at least has a chance to pay us back within a decade. Give me a P/E of eight, a business I’m comfortable with and I’ll happily wait the eight years.

Bonus points if I can get paid to wait, which is where dividend stocks come in.

Thanks to this unfolding bear market, we finally have discounts in High Yieldland. We recently chatted about five cash flowing bargains, and here in just a minute, we’ll discuss another five.… Read more

If you’re looking for 9%+ dividends and an income stream you can retire on without selling shares from your portfolio, closed-end funds (CEFs) are handing you a superb opportunity now.

That’s because this selloff has set us up with bargains in the space, including many CEFs (like two we’ll profile below) throwing off 9% and even 13.7% dividend payouts.

My CEF Insider members know I’m enthusiastic about picking up CEFs at these levels, so long as you’re investing for the long haul and can deal with more volatility, as there’s likely to be more before stock markets ultimately find their footing.… Read more

We’ve been extolling cash in these pages since the start of this year. As the Federal Reserve prepared to pause its money printer, we contrarians booked profits and stacked dollar bills.

Long before the media began saying “bear market,” we recognized that a volatile 2022 was highly likely. We were ready for a decline.

As I write, our premium portfolios are all sitting on sizeable cash positions:

Yup. Plenty of capital ready to be deployed after the final “wash out” in the markets.

These comfortable cash seats have served us well. Bonds kicked off their worst start to a year since 1788 (per Nasdaq).… Read more

In the current environment, with more downside likely to come, one of the best things you and I can do is nothing.

… or at least, next to nothing.

I recently wrote about the virtues of a “no beta” portfolio—basically holding on to cash until it’s time to “back up the truck” at a major market bottom.

But I left the door open—”if you must buy, please promise me you’ll keep it low beta. It’s the next best option to low-beta cash”—and for good reason.

The Case for Low Beta

“Anyone who studies finance learns early on that risk and reward go hand in hand and that with higher expected returns come higher risks.… Read more

Today I want to show you how to build a “three-click” income portfolio that gives us three things every income investor craves, especially these days:

1. Big discounts on our investments.
2. Big dividends, with a 10.6% yield averaged out across three funds.
3. Wide diversification, with investments from across the economy.

Put the three closed-end funds (CEFs) I’ll show you below together into their own “mini-portfolio” and you could pull $10,600 in dividends from a $100K investment; $53,000 from $500K and a six-figure income stream—$106,000—from a million.

Let me introduce these three high-yielding CEFs to you now.

CEF #1: Tapping the Energy Boom for a 7.1% Payout

The ClearBridge Energy MLP Total Return Fund (CTR) yields 7.1% as I write and comes to us at a 20.3% discount to net asset value (NAV, or the per-share value of its portfolio).… Read more

When I was a kid, I took a martial arts class for a year or two. It wasn’t particularly structured, and I think it was just my mom’s way of burning off my energy in a controlled environment to prevent me from destroying the house.

Based on the amount of patched drywall in the house where I grew up, it didn’t work very well.

I honestly don’t remember much from those classes. But one thing I do recall is the concept of “aikido,” a Japanese martial arts style that involves using your opponent’s movements and momentum to your own advantage.

There’s a certain elegance to aikido, and a core philosophy behind it that’s worth remembering in other areas of life—including investing.… Read more

We all know the markets are undergoing a shift—and it’s time for us to stop and take a look at what it all means for our dividend portfolios, particularly our closed-end fund (CEF) holdings.

So today we’re going to step back and look at the economic state of play. (Hint: it’s not as bad as the headline writers lead us to believe: CEF investors—and particularly members of my CEF Insider service—are nicely positioned for the months to come.) I’ll also name a 7.4% dividend that’s currently trading at a bargain price.

History Is on Our Side

Let’s start with corporate profits, which came in better than expected in the first quarter of 2022, with over three-quarters of companies across all sectors reporting earnings above expectations, more than the average, with earnings up 9.1% from a year ago.… Read more

The yield on the 10-year Treasury has rallied near 3%. Yet there’s no way you and I are retiring off that pittance!

Hence the appeal of closed-end funds (CEFs), which regularly pay 7% or better. That’s the difference between a paltry income below $30,000 on a million buck nest egg or a respectable $70,000 annually.

And if you’re smart about your CEF purchases, you can even buy these funds at discounts and snare some price upside to boot!

With the markets in flux (to say the least), now is a good time to review the principles of successful CEF investing. They are more nuanced than classic stock picking because we’re analyzing managers, strategies and holdings versus simple businesses models.… Read more

Most folks dread checking their retirement accounts these days, but not us contrarian income-seekers. We’re coolly playing our “no-withdrawal” retirement strategy, paying our bills with 7% to 9% dividends—while leaving our pile of saved cash alone.

I know that sounds pretty sanguine—boastful, even—when the S&P 500 is down nearly 20%. But deep down, most people know that a “dividends-only” retirement really is the best way to go.

Trouble is, most folks don’t know how to get there. I’ll lay out a roadmap that could let you hang ’em up on dividends alone with as little as $500K saved a little further on.… Read more