Be careful with conventional “wisdom”—especially when it comes to dividend investing. Some investors are so scared of a payout cut that they chase too-popular yields and watch their money grind sideways for years on end.

This safety trap is especially tempting in 2020, with dividend cuts happening left and right. We’ve had 639 publicly traded US companies reduce or eliminate their payouts in the second quarter alone, according to S&P Dow Jones Indices.

If you’ve been burned by a payout cut this year, the small consolation is you’re far from alone. Many folks were caught off guard when big names like Ford (F), Wells Fargo (WFC) and senior-care REIT Welltower (WELL) slashed or ceased their dividends.… Read more

Maybe you’ve had to face one dividend cut in the crisis—maybe more than one. Maybe you’re like many folks, scanning the headlines daily to try to get a jump on the next cut before it slices your income steam.

I get it. It’s part of the anxiety we’re all feeling. And there is good reason to be wary: this pandemic has forced the biggest dividend “sacred cows” to slash payouts—names like Wells Fargo (WFC), Ford (F), Ventas (VTR) and Disney (DIS).

If you’d said any of these companies would cut their dividends back in January, you’d have been laughed out of the room!… Read more

If your dividend portfolio is like that of most investors I know, you’re probably getting paid quarterly. That’s too slow, especially for dividend payments that are most likely too low.

Why not up that frequency to a monthly payout, and increase the total yield while we’re at it?

The secret to monthly payouts that add up to 9.1%, 9.4% and even 10.8% yields per year is a simple three-letter acronym: C-E-F.

For whatever reason, closed-end funds (CEFs) don’t have nearly the following that popular dividend-paying stocks boast. This “secret” is one of the last great efficiencies in an otherwise tough-to-beat market.… Read more

We’ve just been handed a unique opportunity to grab 7.9%+ dividends—and price upside, too.

Now it does involve some risk, and you’ll have to be quick to reap the biggest gains (and dividends). But there’s one unsung fund that can help you cancel out that risk—and grab a huge payout, too. More on that at the end of this article.

A Contrarian High-Yield REIT Strategy for Huge Cash Payouts

First up, the opportunity we’re going to dive into today revolves around real estate investment trusts (REITs) that invest in shopping malls and other retail properties.

If you’ve been reading columns written by me and my colleague Brett Owens, you know we’ve been critical of retail REITs, which were being decimated by Amazon.com… Read more

It’s August, it’s hot, we’re all still quasi-captives…and the collective love for stocks is getting downright steamy.

Investors have not felt this passionate about equities since January. That was, ominously, the last time the “Dumb Money” confidence level marched down from ebullient levels. Here’s a look at the “Smart/Dumb Money Confidence” chart produced by our friend Jason Goepfert at SentimenTrader (who was kind to let us republish here):

The Dumb Money is named so for a reason—it’s made up of the investors who are always late to the party. They pile in at market tops and bail at bottoms, while their “Smart Money” counterparts (fundamental-focused managers) take their lunch money.… Read more

What are we dividend investors to make of this presidential election? Are we supposed to buy now or wait to see what happens in November?

Before we get into that—and discuss a 10.7% dividend that’s very appealing pre–E-Day—there’s one thing we must do: set aside our personal politics and stay laser-focused on the investing angle here.

With that said, there are two things I see as likely no matter who wins this thing:

• A post-election rally: According to Deutsche Bank global chief strategist Binky Chadha, stocks typically rally 5% from Election Day until the end of the year when an election is close, regardless of the result.

After watching the S&P 500 crash, then levitate, over the past seven months, I’ve come to one conclusion: high-yield closed-end funds (CEFs) are disrespected now—and that makes them a great contrarian buy.

Sure, some CEFs are cheap for a reason (I’m looking at you, energy funds). But there are plenty of undervalued winners, too. And plenty of CEFs have crushed the market this year, including 10 that have returned more than 8%. This top-10 list, which I’ll show you below, includes CEFs that have doubled, tripled—and even quadrupled the S&P 500’s 4% return.

What’s more, these funds all have one thing in common that sets them up for even bigger gains: strong management, proving once again that who manages your money is just as important as what you invest in—especially if you’re looking to boost your portfolio’s income stream with the 7% (or higher) dividends the typical CEF throws off.… Read more

These 31 dividends are more than just safe. They are likely going up between now and October!

Recently, S&P Dow Jones Indices’ Howard Silverblatt put a hard number on 2020’s tough dividend decay, writing that second-quarter payouts were whittled down by $42.5 billion during the second quarter. The worst might now be over. Here’s a key excerpt from Silverblatt’s latest note about the month of July (emphasis mine):

“There were significantly fewer dividend actions, as 15 issues increased their dividend rates, one issue initiated dividends, two decreased them (including Wells Fargo’s USD 6.8 billion cut, the second-largest in index history), and one suspended them.… Read more

A lot of closed-end fund (CEF) investors—particularly new ones—wonder how CEFs can sustain huge 8% dividends in a 2% (if we’re lucky!) world.

It’s actually pretty easy. Below we’ll look at three ways CEFs make these retirement-changing payouts happen. And, in response to a question I’m hearing a lot from CEF Insider subscribers these days, we’re going to zero in on one particularly sticky subject: return of capital (ROC).

Contrary to what many people think, ROC isn’t a fund simply handing your cash back to you—and charging a fee for doing so. It’s actually a dividend-investor’s dream! Let’s set up our deep dive into ROC with a snapshot of how easy it can be for CEFs to hand us those rich 8%+ dividends.… Read more

Historically speaking, it’s best to avoid bonds when your central bank is printing money like crazy. More cash can lead to inflation, which can lead to higher interest rates—and put a damper on any fixed-rate holdings.

But not all bonds are bad ideas. Some have their coupons tick higher with rates. Others can even provide you with the upside of a stock! Let’s review US-centric fixed income, starting with the “outhouse” and working our way up to the “penthouse” quality bonds paying as much as 8% today.

US Treasuries: For 0.5%, Why?

Ten-year Treasuries pay just 0.5% or so as I write.… Read more