This stock hurts to short. The bears are gluttons for punishment.

Thirty-six percent (36%!) of outstanding shares are sold short. This dividend is just waiting to be squeezed higher.

Meanwhile, the pessimists are paying the stock’s 12.8% dividend out of pocket. That’s how shorting works—you must borrow shares to put on your bearish bet. As such, you’re on the hook for the dividend.

Wouldn’t be my bet. I’m talking, of course, about our controversial out-of-favor favorite Arbor Realty Trust (ABR). ABR is a mortgage real estate investment trust (mREIT)—a REIT subset that typically doesn’t deal in physical properties, but instead owns “paper” real estate.… Read more

When legendary activist Bill Ackman makes a move, the investment world notices. So when he said he was going to jump into our favorite income plays—8%+ yielding closed-end funds (CEFs)—it certainly got our attention.

We broke it all down in a July 11 article, specifically how Ackman’s latest move—a plan to launch a new CEF with $25 billion in assets under management (making it by far the biggest CEF ever)—was likely to send these funds soaring.

Notice I used the word “was” a number of times just now. That’s because Ackman scrapped the plan just last week.

Ackman’s sudden about-face left many heads spinning in CEF-land.… Read more

Well the “index huggers” hurled their positions quickly, didn’t they! Some bad jobs numbers. A rally in the Japanese yen. And it was sayonara, SPY.

The financial “squares” use blunt instruments. When they panic, they dump the only ETF they own. Turns out they were all short the Japanese yen heading into the weekend!

When the margin call came, they sold the only ticker they own: SPDR S&P 500 ETF Trust (SPY).

I warned you about SPY three weeks ago, just before it crashed. My problem with SPY came down to three stocks, Apple (AAPL), Nvidia (NVDA) and Microsoft (MSFT), which made up 21% of the index—and still do!… Read more

Look, rate cuts are only weeks away now—likely starting in September. And there’s one terrific way to tap them: high-yielding municipal bonds!

I know most folks think “munis”—issued by state and local governments to fund infrastructure projects—are boring.

It is, frankly, a ridiculous opinion. Tell me what’s “boring” about an investment that kicks out a 7.7% tax-free dividend!

To be sure, there are a couple quibbles you might have with munis.

For one, they’re tough to buy individually. But that’s really not a problem: ETFs offer one way in, but a much better way—and the only road to 7.7%+ dividends—is through closed-end funds (CEFs) like the three we’ll break down in just a second.… Read more

In last Thursday’s article, we talked about one of my favorite “low-drama,” high-paying investments—I’m talking 7%+ payouts here.

Those would be covered-call funds, which we look to in times of higher market volatility, which we’ve seen recently and I see as more likely as we move toward year end. At times like these, covered-call funds are a good option, as their option strategy cuts their volatility and boosts their income. Check out that article for our full breakdown of how this works.

Today we’re going to go one step further and delve into how these funds fit into your portfolio. We’ll also talk tickers.… Read more

Worried about a serious pullback in the S&P 500?

That something is going to go a bit haywire here in America, or overseas, and send stocks swooning?

If so, this 5-stock portfolio is for you. It yields up to 7.3% and it is built to withstand Armageddon.

No, really. These “low beta” payers can really lower our blood pressure. (Hold my beetroot juice!)

We blunt the bears with big dividends and small betas. Beta is a measure of an investment’s volatility against a benchmark.

If a stock has a beta of 1, it means it’s every bit as volatile as “the market.”… Read more

We’ve seen more choppiness in the markets in the last couple of weeks. That once again highlights why we should—dare I say need to—own one of the lowest-volatility, highest-paying investments I know of.

I’m talking about closed-end funds (CEFs) that sell call options on their portfolios. I know that sounds a bit out there (maybe even risky to some folks!) but it’s anything but. These terrific income plays give us exposure to stocks, like any ETF, but with less volatility and more income!

I mean, really, who doesn’t want that? Let’s dive into our options here.

Covered-Call Funds Give Us Stocks With Less Drama (and High Income)

Imagine a fund that holds all the S&P 500 stocks, but with a twist: This fund gets paid by investors who would love to buy its shares in the future.… Read more

Google is in trouble. The stock market is beginning to sniff that out.

As an income investor, you may think that you don’t care. But you probably should. We all need to take note, because Alphabet (GOOGL) shares are everywhere.

Let’s make sure that Google’s rotting core product—and business model—don’t stink up our perfectly good retirement portfolio. In a moment, I’ll name-check specific ETFs and CEFs (closed-end funds) to avoid.

First, let me give the world’s first postmortem on Google. It was a heck of a run for a technology product, more than 20 years as the “go to” search engine.… Read more

Here’s one thing most folks get wrong about dividend cuts: They can (and often do) set up terrific buying opportunities!

I know, I know. Before our customer-service inbox lights up here at Contrarian Outlook, let me be clear that we dividend investors hate payout cuts. No one wants to see their income stream and their investment take a hit, as scorned investors toss the stock.

But buying a dividend after a cut (or even before, under the right conditions) can be a winning move. It’s a setup that reminds me of the words of Howard Marks, the most successful investor no one has ever heard of (except Warren Buffett, who is a fan).… Read more

We’re a little more than halfway through the year now, so it’s a great time to check the state of play on our favorite high-yield plays: 8%+ paying closed-end funds (CEFs).

And what a half-year it’s been: CEFs have posted returns far bigger than most people expected back in January! And I see more gains ahead.

Source: CEF Insider

Truth is, the hundreds of CEFs tracked by my CEF Insider service are turning up some fascinating data, especially if we zoom into the CEF Insider Equity Sub-Index (in brown above), which has returned 12% year to date, as of this writing.… Read more