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I never thought I’d see the day when “yen carry trade” was splashed across the financial news. But here we are.

We talked about this weird setup, and how it sparked the August 5 market crash, in Monday’s article. Today we’re going to get into what it all means for closed-end funds (CEFs), including the opportunities now available to us in these high yielders.

First up, while the press was quick to paint the correction as a “made in Japan” event, we do have some signs of a slowdown starting to appear in America.

Is This the Recession We’ve Been Waiting For?… Read more

Let’s talk about recession-resistant dividends because, if history is any guide, we are certainly “on the clock” for a slowdown if not already in one. Here at Contrarian Outlook we have been preparing for slower economic readings, and our recession divvies have already delivered.

Why the focus on slowdown safety? The Federal Reserve began hiking rates 2+ years ago. This is around the time something usually snaps in the financial markets. Sure enough, the Japanese yen of all things caused a VIX spike last seen in the 2008 and COVID crashes.

Our recession focus of late has been defense.… Read more

Don’t worry—we haven’t missed out on the bargains from the August 5 “flash crash.” We’ve still got a sweet setup for surging dividends in a sector most people completely misunderstand.

Misunderstood, unloved and soaring dividends? We’re interested!

I’m talking about refinery stocks. We’re going to zero in on two of my favorites today: Phillips 66 (PSX) and Valero Energy Corp. (VLO). As you’ll see below, I like one more than the other in the market in front of us now.

I say refiners are misunderstood because most investors confuse them with energy producers, who drill for oil and natural gas, then sell the raw products.… Read more

What the heck happened last Monday? I know I don’t have to tell you that the market dropped off a cliff, only to float back higher as the week continued.

The media has been saying that it was all about the latest jobs report in the US, which came out on Friday and simply wasn’t that bad—certainly not the kind of result that deserves the response we saw from stocks.

To put it in perspective, the NASDAQ 100’s fall in a single day was worse than what we saw in the pandemic, when the global economy literally shut down.

Despite the rise in the unemployment rate, joblessness is still relatively low historically speaking, companies are defaulting less than a few months ago (and at historically low levels), and the US economy is set to grow well over 2% this year, after strong growth last year.… Read more

This stock hurts to short. The bears are gluttons for punishment.

Thirty-six percent (36%!) of outstanding shares are sold short. This dividend is just waiting to be squeezed higher.

Meanwhile, the pessimists are paying the stock’s 12.8% dividend out of pocket. That’s how shorting works—you must borrow shares to put on your bearish bet. As such, you’re on the hook for the dividend.

Wouldn’t be my bet. I’m talking, of course, about our controversial out-of-favor favorite Arbor Realty Trust (ABR). ABR is a mortgage real estate investment trust (mREIT)—a REIT subset that typically doesn’t deal in physical properties, but instead owns “paper” real estate.… Read more

When legendary activist Bill Ackman makes a move, the investment world notices. So when he said he was going to jump into our favorite income plays—8%+ yielding closed-end funds (CEFs)—it certainly got our attention.

We broke it all down in a July 11 article, specifically how Ackman’s latest move—a plan to launch a new CEF with $25 billion in assets under management (making it by far the biggest CEF ever)—was likely to send these funds soaring.

Notice I used the word “was” a number of times just now. That’s because Ackman scrapped the plan just last week.

Ackman’s sudden about-face left many heads spinning in CEF-land.… Read more

Well the “index huggers” hurled their positions quickly, didn’t they! Some bad jobs numbers. A rally in the Japanese yen. And it was sayonara, SPY.

The financial “squares” use blunt instruments. When they panic, they dump the only ETF they own. Turns out they were all short the Japanese yen heading into the weekend!

When the margin call came, they sold the only ticker they own: SPDR S&P 500 ETF Trust (SPY).

I warned you about SPY three weeks ago, just before it crashed. My problem with SPY came down to three stocks, Apple (AAPL), Nvidia (NVDA) and Microsoft (MSFT), which made up 21% of the index—and still do!… Read more

Look, rate cuts are only weeks away now—likely starting in September. And there’s one terrific way to tap them: high-yielding municipal bonds!

I know most folks think “munis”—issued by state and local governments to fund infrastructure projects—are boring.

It is, frankly, a ridiculous opinion. Tell me what’s “boring” about an investment that kicks out a 7.7% tax-free dividend!

To be sure, there are a couple quibbles you might have with munis.

For one, they’re tough to buy individually. But that’s really not a problem: ETFs offer one way in, but a much better way—and the only road to 7.7%+ dividends—is through closed-end funds (CEFs) like the three we’ll break down in just a second.… Read more

In last Thursday’s article, we talked about one of my favorite “low-drama,” high-paying investments—I’m talking 7%+ payouts here.

Those would be covered-call funds, which we look to in times of higher market volatility, which we’ve seen recently and I see as more likely as we move toward year end. At times like these, covered-call funds are a good option, as their option strategy cuts their volatility and boosts their income. Check out that article for our full breakdown of how this works.

Today we’re going to go one step further and delve into how these funds fit into your portfolio. We’ll also talk tickers.… Read more

Worried about a serious pullback in the S&P 500?

That something is going to go a bit haywire here in America, or overseas, and send stocks swooning?

If so, this 5-stock portfolio is for you. It yields up to 7.3% and it is built to withstand Armageddon.

No, really. These “low beta” payers can really lower our blood pressure. (Hold my beetroot juice!)

We blunt the bears with big dividends and small betas. Beta is a measure of an investment’s volatility against a benchmark.

If a stock has a beta of 1, it means it’s every bit as volatile as “the market.”… Read more