How to Beat the Market and Collect an 8.5% Yield in 2017

Michael Foster, Investment Strategist
Updated: December 30, 2016

It’s been a great year for high-yield bonds. If you’ve held them during 2016, congratulations.

But if you’re like me, you’re probably wondering whether to keep holding or take your profits and invest them somewhere else.

That’s the question I’m facing with a high-yield bond fund that has gone up over 22% since my purchase.

To decide what to do, I first want to look at how the asset has performed relative to alternatives. The leading index for this asset class (the Bank of America Merrill Lynch US High Yield B Total Return Index) has risen 17% in 2016:


High-Yield Bond Index Soars

Meanwhile, the S&P 500 has gone up 13% in the same period, including dividends:


Stocks Doing Well, Too

Of course, no one will be crying themselves to sleep at night for getting “only” 13%, but it is less than high-yield bonds paid out.… Read more

3 Emerging Market Funds Paying 6.4%, With 30% Upside

Brett Owens, Chief Investment Strategist
Updated: December 29, 2016

When you think of emerging markets, what comes to mind? Growth opportunities are likely first on the list … followed ever so closely by stomach-churning volatility.

What you probably don’t think about is income. But even in EMs, investors can dredge up some considerable dividend yield.

We all know the basic emerging market investment thesis: These “emerging” countries typically feature much more robust economic growth and quickly expanding middle classes. As a result, the companies there are expected to rapidly grow as they both feed off that greater economic pie, and as their operations become international in nature, building revenues around the rest of the world.… Read more

Why Rising Interest Rates Won’t Kill Stocks (and What to Buy Now)

Michael Foster, Investment Strategist
Updated: December 29, 2016

I’m sick of hearing people worry about the Federal Reserve raising interest rates.

The mainstream media and the market go into panic mode when they fear rates are going up. I’m hearing more worries about a major stock correction coming in 2017. Since Janet Yellen’s interest rate hike, the market has taken a dip—and the trend is worrying:


The Rally Is Over

Investors are losing faith in the Trump rally, and many people are anticipating more declines to come. The Fed said it’s going to raise rates three times next year—and each rate hike is expected to drive more investors out of the stock market and into safer and better-yielding US Treasuries.… Read more

4 Cheap Dividend Growers With 20% Upside in 2017

Brett Owens, Chief Investment Strategist
Updated: December 26, 2016

Looking for cheap stocks throwing off double-digit dividend hikes in 2017?

Bad news: it’s getting tougher to dig up these hallowed companies—and easier to fall victim to a dividend cut.

Consider the S&P 500, the be-all-and-end-all for most people when it comes to stock picking.

According to FactSet, 44 of the index’s constituents had payout ratios (or the percentage of earnings headed out the door as dividends) that were above 100% in Q3. That’s nearly 9% of the index, the second-highest total in a decade.

Not good.


Meantime, the S&P 500’s average payout ratio hit 40.2% during the quarter, the highest level in seven years.… Read more

2 Beaten-Down Funds to Buy for 9.4% Dividends – and 3 to Avoid

Michael Foster, Investment Strategist
Updated: December 23, 2016

2016 has been a crazy year—so it’s no surprise closed-end funds (CEFs) have been offering crazy returns.

As we’ll see in a moment, the best fund is up over 50%, which crushes just about every unleveraged ETF and mutual fund out there. Plus, that fund pays a whopping 7.6% yield—which is pretty typical for CEFs. If you bought in when it was at its 52-week low, you would have been getting an unbelievable 14.7% yield throughout 2016, while also seeing your portfolio’s market value go up and up.

This is the power of getting into the right CEF at the right time, and it shouldn’t be ignored.… Read more

3 Stocks With Big “Moats” Paying 5%

Brett Owens, Chief Investment Strategist
Updated: December 22, 2016

It’s actually easy to find dividend stocks that yield more than 5%. No, really. You can go to a screener like the one at and actually search for dividend stocks that yield more than 5%. As of right now, about 450 stocks hit that bar.

But that’s merely a list – a list that more closely resembles a minefield.

Buried in that list of high-yield dividend stocks is a horde of time bombs. These are stocks that threaten your hard-earned nest egg in any number of ways.

Some of these big yields are simply a result of big stock losses, which in turn are a reflection of deteriorating financials that could lead to payout cuts or suspensions in the future.… Read more

8 Rules for 8% Income Investing in CEFs

Brett Owens, Chief Investment Strategist
Updated: December 21, 2016

The 10-year’s yield up to 2.6%? Big deal – you and I still aren’t retiring off it!

Hence the appeal of closed-end funds (CEFs), which often pay 8% or better. That’s the difference between a paltry minimum-wage income of $26,000 on a million bucks in capital, or a respectable $80,000 annually.

And if you’re smart about your CEF purchases, you can even buy them at discounts and snare some price upside to boot!

Unfortunately this rising rate environment has income seekers scared of CEFs. Many of our Contrarian Income Report subscribers are writing in to ask if they should bail on our high paying vehicles.… Read more

How to Buy Buffett’s Best Stocks at a 19% Discount

Michael Foster, Investment Strategist
Updated: December 20, 2016

Warren Buffett’s done it again.

Don’t look now, but year-to-date, Berkshire Hathaway (BRK.A, BRK.B) stock is up 25% and is actually outperforming the incredible 20% a year, on average, it’s returned since 1964.

A Chart Any Investor Would Love


In a moment, I’ll show you an overlooked investment that lets you duplicate the moves of the world’s smartest investor—and you won’t have to buy a single share of Berkshire Hathaway to do it.

In fact, you’ll be able to pick up Berkshire and the companies it invests in for 19% less than you’d pay on the open market!

A Banking Boost

Berkshire’s year-to-date gain has come, in part, thanks to the financial industry’s recovery post-election.… Read more

4 Stocks Insiders Are Loading Up On – and You Should Too

Brett Owens, Chief Investment Strategist
Updated: December 19, 2016

If you’re cutting back on stocks because interest rates are rising, you’re making a mistake.

But don’t just take my word for it (after all, I am a dyed-in-the-wool dividend-stock fan). Ask Ned Davis Research, which released its latest research on the relationship between stocks and rates about a year ago.

The finding? When the Fed moved slowly on rate hikes, stocks dropped immediately after each announcement … but went on to gain 10.8%, on average, in the next 12 months.

And as I’ve mentioned before, when Ned Davis’s researchers took a longer view—from January 1972 through December 2014, a period that saw far faster rate hikes than we’ll likely see this time around—they found that dividend growers outshine any other kind of stock, and not by a little.… Read more

How to Buy the Best Dividend Stocks at a 16% Discount

Michael Foster, Investment Strategist
Updated: December 16, 2016

Few people know it, but you don’t have to buy a stock for the price you see on Yahoo Finance.

The truth is, you can buy some of the best large cap dividend payers for cheaper: and I don’t mean a little cheaper. I’m talking a 16% discount.


Through a closed-end fund (CEF) that’s trading at a ridiculously high discount to its net asset value (NAV). That’s despite a strong track record, low expenses and an attractive 4.4% dividend yield.

Let’s break each of those things down one at a time, starting with the name of this unheralded investment.

It’s called Tri-Continental Corporation (TY), and it holds some of America’s safest and highest-quality stocks.… Read more