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When it comes to dividend cuts, closed-end funds (CEFs) aren’t much different from stocks: investors tend to hit the sell button as soon as a cut is announced, leaving those who hang on with a shriveled income stream and a hit to the value of their investment.

In fact, sometimes a selloff in response to a dividend cut can be worse with CEFs because investors mainly look to them for income, with the average CEF yielding 7.5% today.

This is obviously a situation we want to avoid, which is why I’m writing you now: we’re going to look at two recent CEF dividend cuts to see what they can tell us about dodging said cuts.… Read more

Just three weeks ago, we discussed the likelihood that the stock market was going to be a mess this year.

It’s already a train wreck.

You’re probably wondering whether you should buy more shares of your favorite dividend. Well, if you’re sick of wondering, use this simple yet effective “market timing” technique.

Dollar cost averaging (DCA) probably helped you build your impressive retirement portfolio. And DCA is more than just an initial fortune builder. It can also build wealth and income streams during train wreck markets like these.

It was the regular weekly, monthly and/or yearly purchases throughout your earning years that helped you buy more shares of stock low (and buy fewer shares higher).… Read more

The crowd is about to pile into monthly dividend stocks, and we’re going to beat them to it with three of the best of them—and grab ourselves hefty yields up to 6.5%, too.

The three monthly payers we cover below will be very appealing to folks who are getting shaken down as the S&P 500—and especially the tech-heavy NASDAQ—crumble.

Dividends—even monthly ones—normally get a collective yawn from investors in bullish times. But they’ll be darlings this year as Jay Powell switches off his money printer to try to clean up an inflation mess of his own making.

Jay’s Money Printer Works a Little Too Well

Meantime, “regular” stocks and Treasuries still dribble out sorry payouts way south of 2%.… Read more

This stock market selloff has gone way too far—and it’s pumped up the dividend yields on some of our favorite high-yield closed-end funds (CEFs).

That means it’s time to buy. I’ll name three CEFs the panicked masses have mistakenly tossed over the side in a moment. Together, these three snubbed funds throw off an 8.7% average dividend. Plus they’re trading at a nice “double discount”: that is, the CEFs themselves are cheap and their holdings, which consist of top US and international stocks, are way oversold in this latest market fracas, too.

History Is on Our Side

When considering opportunities like this one, it pays to look at history.… Read more

“Buy and hope” investing has never been more hopeless.

With bond yields doing a “moonshot” to 1.8%, they are now looking down at the S&P 500’s sad 1.3% yield. Still, let’s admit—these aren’t enough for us to be able to retire on dividends alone.

Plus, we’re seeing serious volatility as the Federal Reserve hits the Pause button on its money printer. Basic income investors are losing these annual yields in one trading session!

Fortunately, there are serious dividends beneath the surface of the market. Today we’ll highlight five stocks that pay more than 7%. This is a big upgrade.

Back to the “spike” in bond yields.… Read more

Investors are way too pessimistic about the economy. And their gloom—driven by the mainstream press (as usual)—is setting us up for a rare “double discount” on closed-end funds (CEFs) throwing off 7%+ yields.

I say “double discount” because almost everyone is misreading some of the latest economic signals—and it’s causing them to sell stocks (and CEFs!) at exactly the wrong time.

That mistake—which is behind a large part of the drop we’ve seen in the markets since the start of the year—is discount No. 1.

And we’ll get discount No. 2 by shopping for CEFs that are also trading at undeserved discounts.… Read more

“Daddy. Can you come play with me in the playroom?” my four-year-old asked.

“Sure. I’ll be right in,” I said. “Once I get done unloading the dishwasher. Would you like to help me unload?”

“No thanks,” my daughter replied. No surprise, but one day I hope to catch her off-guard.

She walked to the playroom. Barely. And reappeared.

“Daddy. You’re taking for ages.”

For ages is the equivalent of forever in our house. I think. Then again, given her level of exasperation, she could be telling me I’m taking longer than forever.

She’d make a good bond trader. With long rates rising every day, few income investors want to hold any bonds for any amount of time.… Read more

The last time the Federal Reserve tried to taper its money-printing ways, the S&P 500 dropped 20% in 11 weeks.

I’m not sure if the sequel is going to be any kinder to “America’s ticker,” the SPDR S&P 500 ETF (SPY). It’s time to prepare.

The best time to sell speculative, profitless positions was last week. The second-best time is probably now, with Jay Powell set to stop his bond buying and start raising rates in the next couple of months.

I know many dividend investors are feeling smug, and rightly so. We made a bunch of money from Powell’s printing, and now our dividend darlings appear set to attract “basic” investors from the land of crypto and tech.… Read more

Today we’re going to make a couple crafty moves worthy of the canniest contrarian—and in doing so, we’ll grab reliable income plays other investors are snubbing (with outsized yields up to 8.6%).

These moves fly right in the face of the Federal Reserve’s planned rate hikes, potentially starting as early as March, but that’s the whole point: plenty of folks have let the fear of higher rates scare them off these investments. But as mainstream investors almost always do, they’ve taken things too far, nicely setting us up to grab these high yields and some price upside as 2022 unfolds.

Let’s start with our first move, which is into longer-duration bonds, and specifically closed-end funds (CEFs) that hold them.… Read more

It’s no surprise to us calculated contrarians—2022 is already looking like a volatile train wreck. With the Federal Reserve shutting off its money printer, cash is flowing away from the most speculative part of the stock market for the first time since early 2020.

Declines are likely to produce winners and losers. While profitless stocks are probably toast, dividend growers are likely to turn into darlings.

This is shaping up to be the year of the “dividend magnet.” If you don’t know what this is, here’s a crash course on the safest, surest way to make money from stocks in the months ahead.… Read more