It’s easy to see why investors love utilities:

1. Low volatility
2. High yields

But there’s a problem: recent scares like the inverted yield curve mean some utilities, and utility funds, have gotten ahead of themselves and are more prone to a pullback than most folks think. (The three 7%+-yielding closed-end funds (CEFs) I’ll show you shortly top this “overpriced” list.)

The worst part is, many people think utilities are underbought, because the benchmark Utilities Select Sector SPDR ETF (XLU) is up 8.3% year-to-date, half the 16% gain of the SPDR S&P 500 ETF (SPY).

But that’s recency bias. Stretch the timeline to 12 months and things look very different:

Utilities Get Pricey

Interest-Rate Pause Should Boost Utilities.… Read more

As investors near retirement, they tend to favor bonds, which provide income and less drama than stocks. However, less drama means less potential upside. With retirees living longer than ever before—which means much more time for inflation to eat away at your nest egg’s purchasing power—it’s important to not go too conservative too early in life. And fortunately, today even 65 or 70 may be too early!

One suggested solution for our long life expectancy “problem” is to stay with stocks longer. But stocks can go down as well as up, and a big pullback can inflict permanent damage on a portfolio.… Read more

ETFs, or exchange-traded funds, are for suckers. There is no reason for any savvy income investor to get wrapped up in this “$3.4-trillion obsession.”

Why do I say $3.4 trillion? Because that’s how much Americans have tied up in them. But there are better ways to buy the same types of stocks, and shortly we’ll highlight three ETF replacements you can buy just as easily for yields up to 7.5%.

Wall Street is (of course) happy to play along with the ETF craze, cranking out fund after fund to give folks their fix—some so “out there” they track wheat futures, casino stocks, even companies that aim to curb obesity.… Read more

Still spinning from Tax Day?

You’re not alone: plenty of folks who bagged wins last year are feeling shell-shocked, now that Uncle Sam has walked off with his cut.

Let’s face it: it’s too late to recoup any of that cash. But you can still take steps to weaken Uncle Sam’s grip on from your income stream, before you find yourself in the same boat next year.

And there’s an easy way to do it—it actually comes, in a strange way, from the government itself!

“Keep 100% of Your Gains Forever”

I’m talking about municipal bonds, or bonds issued by states, cities and counties to finance roads, bridges and just about any other project you can imagine.… Read more

U.S. stocks posted modest gains this week, which was shortened by the Good Friday holiday. The first full week of earnings season saw largely positive reports, especially from the banks, given the fact that aggregate profits are expected to decline 3% to 4% in the first quarter.

The earnings decline in the face of robust gains to begin 2019 was enough to send strategists at Jefferies to the sidelines this week. On Monday, the firm lowered its rating on U.S. Equities to Modestly Bearish, in the context of their global asset allocation.

However, overall investor sentiment remains high in this country.… Read more

Growth or yield? Why choose when we can have both.

There are 32 dividend hikes on the way that are going to set up their investors for a big 12 months ahead. How? Simple–these payout raises are going to provide fuel to their attached share prices. The 10%+ raises (and there will be double-digit increases) in particular are going to position their shareholders for safe 10% to 12% returns in the year ahead regardless of what the broader stock market does.

Ever wonder why the yield on your favorite dividend aristocrat always looks low even though the firm is regularly raising that payout?… Read more

If you’re watching tech stocks grind higher every day, you’ve probably been just a little tempted to jump in.

… or should you wait? After all, the high-flying tech space—particularly fan faves like Facebook (FB), Apple (AAPL), Amazon (AMZN) and Google (GOOGL), a.k.a. Alphabet—has to pull back sometime, right?

The short answer is yes, there are plenty more gains ahead for tech—especially if you’re investing over the long haul—making now a great time to buy.

A 9% Dividend From Google (for real)

But we’re not going to “buy direct” and hope for more upside, like your S&P 500-focused friends are likely doing.… Read more

“Jenny, I can imagine. My wife makes fun of me when I ice my knees after basketball games,” I confided to my friend and favorite bartender.

Her husband, no “young chicken” anymore either she joked, was sore from his own martial arts contest. She bought him a CBD “bath bomb” to help with the aches of being active and middle-aged.

Always the sucker for natural remedies and bartender wisdom, I teed up an Amazon selection for pain and inflammation. Just 26 hours later, I was massaging hemp, turmeric and MSM into my patella tendon (about an hour before tipoff):

BO’s Anti-Inflammatory Pick

“You’re a terrible scientist,” my wife reprimanded me after I bragged about my patella’s comeback in my postgame recap.… Read more

If your mattress is a bit heavy on cash these days, you’re probably grinding your teeth every day as the markets tick higher. Should you be in the market? Shouldn’t the market pull back eventually?

Here’s a solution that’ll get your “buy and hope” friends out of your face: buy some dividend machines that’ll pay you while the markets levitate and hold up just fine if we do see the dip we’re overdue for.

I’m talking specifically about three mighty “pullback-proof” dividends (yields up to 7.5%) perfect for the “cliff-edge” market we’re seeing now. More on those in a moment.… Read more

There’s a three-word phrase that’s terrifying just about everyone these days. If you take it at face value, it could trick you into making a dangerous mistake with your retirement.

It springs from the following chart:

The Yield-Curve Panic

This chart tracks the spread between yields on the 10-year Treasury and the 2-year Treasury. In normal times, the shorter-term bond pays a smaller yield than the longer-term bond. But the difference between the two has gotten smaller and is now close to going negative.

That’s where our dangerous phrase comes from: this situation is known as an inverted yield curve.

The upshot?… Read more