Articles

Something weird is happening in the housing market, and it’s handing us an outstanding opportunity in stocks (including the 8%-yielding pick we’ll dive into shortly).

I know that’s an odd statement. After all, how can housing and stocks really be that connected? And how can we be so optimistic about housing when it has already soared in the last 18 months, and bubble warnings are everywhere?

The answer is that, as we contrarians know, the way the headlines make things appear in the markets is often very unlike how they actually are.

Look at the chart below, which shows, on the right, the average monthly mortgage payment over the past 45 years, in five-year increments, on the typical home (using the median average house price for each year, minus a 10% down payment).… Read more

I saw this headline float across my Bloomberg Terminal late last week…

There Are More 401(k) and IRA Millionaires Than Ever

(Disclosure and digression: My “Terminal” is Bloomberg.com on my phone. I can thank my long wait at the DMV for my California REAL ID for this story.)

Fidelity Investments—apparently happy to share its customer’s financial info anonymously—says it has more than 750,000 seven-figure 401(k) and IRA accounts.

A chunk of money is great, especially when we can leave it untouched and let it grow. That was no doubt the “secret” of 99%+ of these retirement millionaires. They socked away money for decades and rode the market higher.… Read more

The recent oil correction has opened a window for us income investors to grab big(ger) dividends at big(ger) discounts! Today we’re going to take full advantage.

In a moment, we’ll discuss a 3-click energy dividend portfolio that yields 5.9%. Plus, we have some price upside in addition to these payouts, thanks to the pullback in the energy sector.

There’s no doubt the goo has taken a header, dropping from $75 a barrel in mid-July to $62 as I write this. But that’s overdone: consider that our “crash ’n’ rally” scenario (which I’ve been arguing with anyone who will listen for 16 months now) is still in early days.… Read more

It’s hard to believe, but there actually is a 10% dividend sitting right under investors’ noses—even now, when the typical S&P 500 stock dribbles out a pathetic 1.3% payout.

That 10% payer is a closed-end fund (CEF) called the Liberty All-Star Equity Fund (USA). We’re going to put this fund in the spotlight today, so we can see how it offers such a large dividend in these income-lean times, and whether it may be for you.

Let’s start with performance: USA has delivered a total return far larger than that of the market in the last five- and 10-year spans (as well as in the last three years, one year and for 2021 so far).… Read more

Your next Amazon.com box could be fueling a dividend—and stock price.

Talk about delivery-powered dividend growth! In the US, 3 billion e-commerce packages were delivered in 2020. And its not just Amazon (AMZN).

Brick-and-mortar retailers have finally realized that they must answer Amazon with convenient deliveries. Smart retailers such as Walmart (WMT) and Williams-Sonoma (WSM) have figured out that “omni-channel” (in-store and online) is the future.

They’re the types of companies that will survive the “great reset.”

E-commerce swallowed brick-and-mortar market share over the past decade, making up just 6.4% of retail sales in 2010, but a whopping 15.8% in 2019.… Read more

Apartment rents are on a tear of historic proportions.

National median rents have increased by nearly quadruple the typical increase in any normal year.

And it doesn’t seem to be slowing down.

Have you tried to buy a house lately?

House prices increased by the fastest rate on record in July; simply put, renters can’t afford to buy a house right now.

And not only are renters getting priced out of the market, but they are also relocating.

Despite some return to normalcy in urban locations, many young renters have fled the big city, spurred by the ability to ‘work from anywhere’, better work opportunities, and a desire for more affordable housing.… Read more

As dividend investors, we don’t usually read the tea leaves in employment reports (that, after all, is the domain of economists!). But there is something happening in the working world that’s set to power the payouts, and prices, of a select group of closed-end funds (CEFs) for years to come.

That is this: people are spending less time in the office. But productivity isn’t falling. And of course, demand for workers is surging right now, setting the stage for pay hikes, bonuses, stock options—just about any way to put more money in workers’ pockets that you can think of.

Employment Roars.… Read more

A “great reset” is underway in our economy. The talking heads bemoan the losers. We contrarians should pay attention to the winners—and their stocks—because that’s where fortunes will be made.

I’ve seen this trend unfolding firsthand. My second software company, which focused on marketing for e-commerce stores, launched a Shopify (SHOP) app in 2013. At the time this was a fledgling platform that helped retailers sell their wares online.

We were a startup ourselves, newly minted a year prior. To the outside world we described ourselves as a “spinoff” from my first software company, to give the feeling of stability. In practice, we were three dreamers working for free to get our company off the ground.… Read more

Ignore anyone who says share splits have no impact on your portfolio (or your dividends!).

They absolutely do set you up for a nice price bump. I’ve seen it time and time again. It’s easy to see why: when a company—especially a top-notch dividend grower—splits its shares, the move draws in folks who’ve been holding off, seeing the pre-split price as too expensive.

Let’s be honest: we’ve all done this. How many times have you avoided a stock because it trades for $300 a share? Or $500 (or whatever your idea of expensive is)? Never mind the really high traders, like Alphabet (GOOGL), at $2,700, or Berkshire Hathaway (BRK.A),… Read more

These days, many of the dividend investors I talk to feel squeezed between:

1. Weak yields (which have plunged as stocks have surged) and
2. High taxes (which are likely to rise further).

You’re no doubt feeling this pinch, too. The good news is that there’s an investment that lets you wiggle out of this trap, regularly offering steady-as-she-goes dividends up to 5%.

There’s another nice twist that works in your favor here, because these payouts are tax-free, so they could be worth a lot more to you—I’m talking payouts north of 7.5% with tax savings factored in, depending on your tax bracket.… Read more