Markets took a dive (then posted a lightning-fast recovery) last week, a return to volatility that’s a good reminder to cast an eye over our dividend portfolios.

One thing to pay particular attention to is the amount of cash you’re holding. Because if you’re like many investors I’ve talked to recently, you’re holding too much of it—and that can cause a steady wealth drain that bleeds away thousands in returns every year!

Taking Money Off the Table—at Exactly the Wrong Time

Of course, having a healthy cash cushion is always a good thing. The trouble for most folks, though, is that they’ve been growing the amount of cash they have outside the market just as stocks have taken off.… Read more

The explosion in data usage in recent years has led to good fortunes for Data Center REITs such as Equinix (EQIX) and Digital Realty (DLR). Even Blackrock decided that now was the time to invest in data centers, buying out QTS Realty (QTS) for a big premium last month.

Some investors might think the easy money has been made, but I’m here to say that the trends in data usage should lead to both strong capital returns and attractive dividend growth for the foreseeable future.

Here’s why.

The data explosion has been one of the more long-lasting secular trends in recent history and a big reason for the move by Blackstone in acquiring QTS.… Read more

These dividends are about to break free from their regulatory shackles. Once the cuffs are off, we’re going to see payout hikes up to 100%.

Even the dividend growth “laggards” in this group are due for 11% and 17% hikes. As these payouts pop, their stock prices may certainly follow.

Here’s why.

For the past decade, income investors have overlooked the big banks. The Great Recession burned a hole in the brain of every retiree who lived to tell about it.

The U.S. Treasury bailed out America’s financial sector with the Troubled Asset Relief Program, which disbursed roughly $427 billion to buy toxic assets from (and even equity in) U.S.… Read more

Hands up if you’ve heard of the Strategy Shares Nasdaq 7Handl Index ETF (HNDL). 

Right. I thought not. And I can’t blame you for overlooking this one. It’s a relatively obscure ETF, with a bit over $700 million invested across a number of assets (just what those assets are I’ll get to in a minute).

Nonetheless, HNDL is worth discussing today because it highlights a couple things we need to look out for when picking high-yield funds for our portfolios.

First up, the yield and the strategy: HNDL pays a 6.9% dividend today and promises diversification, both of which sound great.… Read more

The market looks like it’s about to fall apart. Which means we contrarians will step in, and smartly bank more dividend for our dollar.

Some of us park our dry powder in cash. Others stash in conservative bond funds to juice a bit more yield out of our savings. Let’s talk about these bonds because this is an ideal time to say goodbye to them (for a while!)

As dividend investors, we are naturally allergic to cash. After all, why leave money in dollars earning nothing when we can move it to a stock or fund yielding something?

As I write our Contrarian Income Report portfolio yields 6.3%.… Read more

It’s mid-2021, and stock prices are up, dividend yields are down, and you’re probably wondering what the heck to buy for a decent income stream as we thunder toward 2022.

It’s a head-snapping reversal from where we were a year ago, which makes now the perfect time to step back and plot our next dividend moves.

So let’s piece together our game plan for the rest of the year—and into 2022—by ranking five popular (and not so popular!) investments known for income from worst to first. You’ll find many individual tickers to put on your list here, too—including one yielding a healthy 6.8% today.… Read more

One of the so-called “rules” of income investing is that you can get a high dividend or a sustainable dividend from a stock or fund—but not both.

And to be fair, that is true of some investments. But there are plenty of exceptions, too, chief among them an asset class that sports a little-known “trick” that gives us blockbuster 9% dividends that are more than sustainable over the long run.

The CEF Secret

That asset class would be closed-end funds (CEFs), and the “trick” ties into the fund’s discount to net asset value (NAV, or the value of the investments in the fund’s portfolio).… Read more

Preferred stocks are the little-known answer to the dividend question:

How do I juice meaningful 5% to 6% yields from my favorite blue-chip stocks?

“Common” blue chips stocks usually don’t pay 5% to 6%. Heck, the S&P 500’s current yield, at just 1.3%, is its lowest in decades.

But we can consider the exact same 505 companies in the popular index—names like JPMorgan Chase (JPM), Broadcom (AVGO) and NextEra Energy (NEE)—and find yields from 4.2% to 6.9%.

If we’re talking about a million dollar retirement portfolio, this is the difference between $13,000 in annual dividend income and $42,000. Or, better yet, $69,000 per year with my top recommendation.… Read more

As I write this, the 14 funds in our CEF Insider portfolio yield a tidy 6.7%, on average. And while that’s down from the 7.5% average (and above) we’ve seen in the past, there’s a good reason: big price gains! (Because prices and yields move in opposite directions, of course.)

And recently, we’ve locked in some of those big returns with timely sales. In our June 2021 CEF Insider issue, for example, we sold the PGIM High Yield Bond Fund (ISD), which we bought in late 2019 (a lifetime ago!) when it was trading at a 10.3% discount to net asset value (NAV).… Read more

Collecting dividends is fun. Doubling our money is even better.

From time to time, Mr. and Ms. Market will present us with a deal that includes payouts plus price upside. I’m talking about 50% to 100% returns from secure dividend payers.

These “dividend doubles” require a catalyst. Some event that, if it unfolds, would launch profits—and the firm’s stock price!

Higher interest rates are a compelling “catalyst bet” today. The 10-year Treasury yield tripled between August and April. We noted a few months back that the rate move was due for a breather, and that’s exactly what has unfolded with the benchmark rate briefly edging below 1.3% last week:

Time to “Buy the Dip” in Interest Rates?… Read more