It’s that time of the year again. I’m not talking about shopping for the kids, I’m talking about 2024 predictions—especially for our favorite dividend plays: big-yielding closed-end funds (CEFs).

It’s a particularly good time to talk about CEFs because the 2022 selloff has left us some pretty sweet deals that are still around … even though 2022 ended more than 11 months ago! Chief among these “held-over” bargains is the 11.7%-paying CEF we’ll get to in a sec.

First, when it comes to predictions, we should be clear that these days, the market mood tends to shift around the time the calendar flips.… Read more

The Internet is a wild place—and finally, we have irrefutable evidence! I mean, why else would investors dump this safe 12.8% dividend?

Hilariously, they are already feeling FOMO. After selling this stock low, it jumped 7.7% without them last Friday alone. Wow.

A basement blogger decided to pick on Arbor Realty Trust (ABR) in recent weeks. No name, no face, but hey, they whipped up a nifty little PDF saying they were short ABR, so we all should be too.

(Note: We don’t hate short sellers. In a world where every first-level investor wants to hear only the good news—true or not!—thoughtful,… Read more

A 7.7% payer we watch very closely just did something weird for a stock with such a high payout: it hiked its dividend—for the 29th straight year!

Most folks will tell you a 7.7% payer with a dividend that consistently grows is a myth at best—or a “yield trap” at worst. But these hikes are just another mark on the calendar for this company’s investors.

Its latest hike—and forecast of more of the same in 2024—came out in a press release from the company late last week. The firm is a little-known (at least here in the US) natural gas shipper.… Read more

When I see people touting the 60/40 portfolio, I kind of feel like Haley Joel Osment’s character in the Sixth Sense. But instead of seeing dead people, I see dead ideas.

You likely know what I’m talking about: a portfolio that seeks to automatically balance risk by holding 60% in stocks and 40% in bonds.

It sounds sensible enough, but history shows that people who invest by this rule have been leaving a lot of money on the table for a long time:

60/40 Portfolio Pays Too High a Price for Low Volatility

One quick glance at US stocks, seen here in purple through the Vanguard Total Stock Market ETF (VTI), and bonds, in orange through the Vanguard Total Bond Market ETF (BND), shows a problem.… Read more

First-level investors think the key to retiring on dividends alone is to find the largest yields they can and ride them into the sunset.

But while it’s important to lock down fat yields—like the five-pack of 5.5%-10.4% yielders I’ll share with you today—that’s only part of the puzzle. We need two more things from our long-term income holdings:

1. Dividend safety. A 10.4% payout is only helpful if it’s actually going to get paid for quarters and years to come. No dividend cuts, please.
2. Principal safety. We’re also not looking to lose 10.4% per year in price. Or anything in price, for that matter.

With the S&P 500 up double-digits this year, the media is at it again—cranking up worries that we’re headed for another crash.

“Stock-Market Crash: Expert Shares Huge ‘Red Flag’ Signaling Recession,” says Business Insider. “Will the Stock Market Crash? This Hedge-Funder Thinks So,” declares New York Magazine.

And on it goes.

I suppose it makes sense, given that the S&P 500’s roughly 19% gain so far this year is a lot more than its typical return. Thing is, 2023 does not exist in a vacuum divorced from history, and just a tiny bit of history shows we’re not yet in a bull market, and stocks are not overheated, despite their recent gains.… Read more

This two-year interest rate trend is about to turn. When it flips, JPMorganChase CEO Jamie Dimon’s safe, somewhat-secret 7.4% dividend will directly benefit.

We’ll highlight the name and ticker of my favorite bond fund for 2024 in a moment. First, let’s discuss why we’re discussing it.

For two straight years, the US dollar has rallied relentlessly. Credit (or blame) the Federal Reserve. When the Fed hikes, the buck rallies.

But an inflection point is near. The Fed will pause in its interest-rate hikes soon. This means the greenback is near a top, give or take, because it moves along with its best friend, the Fed Funds Rate.… Read more

Look, our dividends—and the profits that power them—are set to soar in ’24. So it’s prime time for us to shift our returns away from whipsawing share-price action like this:

A Brutal 2 Years—Capped With a Loss

This is the wild ride folks who bought an S&P 500 index fund have been on over the last two years. And what “thanks” did they get for riding that particular roller-coaster?

A loss! They’re still in the red.

Instead, we’re going to shift our profits toward the smooth and steady hum of dividend growth. Check out this sweet “dividend escalator” from insurer UnitedHealth Group (UNH)—more on UNH in a second—showing the company’s incredible 571% payout growth in the past decade:

The Dividend Staircase We’ll Climb—Starting in ’24

Why Dividends Are Primed for Growth

The upshot here is that almost nobody makes the connection between dividends and share prices.… Read more

Here’s something you might be surprised to hear: according to the numbers, the US economy is actually doing well—and yet (almost) nobody wants to admit it!

It’s a misconception we income investors can exploit with the three high-yielding picks we’ll cover below.

It’s a weird turn of events, but it makes sense. Since the pandemic, itself an event of shocking turmoil, it seems that the chaos around the world is getting worse, and our fundamental hope for humanity makes us think that this just can’t be good for growth.

Except that’s not how things typically play out.

Global Turmoil = Faster Growth?… Read more

Stick with me for some “next level” dividend thinking. We have a potential opportunity right now to buy five payers yielding up to 14.9% as the economy heads into recession.

Wait, what? Why would we want to buy stocks as the economy slows?

Well, we don’t want to own any names. We’ll pass on sky-high AI darling NVIDIA Corp (NVDA). Give us cheap REITs (real estate investment trusts) because they are likely to rise as rates fall.

Yes, that’s what happens in a recession. Investors flood into fixed income. Interest rates fall, and REITs—which tend to move opposite rates—rise.

These landlords are already getting up off the mat after a rough two years in which rates rose relentlessly.… Read more