Last week, on our dividend trading webcast, several readers asked me how I manage my own money. Well, it’s a bit different from the “buy and hold” (or hope!) strategies employed by most income investors. Here’s why…

I don’t like holding full positions during downturns. When the market looks like it’s about to roll over, or when it actually begins to roll over, I (personally) head for the sidelines.

And when the pullback is over, I flip my cash back into the market. It’s that simple.

Following this strategy, there have really only been four “trades” to make all year.… Read more

It’s rare when we get not one but two crashes bigger than 10%+ in a single year—but hey, it’s 2020. Anything goes.

But take just a second and imagine that you dodged both of those disasters, resting easily on the sidelines during the chaos. Then you moved into stocks for the rest of the year. In that case, 2020 just may be your best year yet!

 A “Dream” Strategy (That’s Possible to Achieve!)

Of course, no one can precisely predict the market’s next move. But what I’m about to show you is as close as I’ve ever seen an investing system get.… Read more

Four years ago, I published an article detailing how a young upper-middle-class professional could quit working and still survive on dividends alone in just five years. It was a claim that many folks thought was impossible to achieve (and they told me so in the comments!).

But history has proven that, in fact, it was true.

Today I want to show you how following the advice I gave back then would have produced financial independence (or an income stream that could cover basic needs) in just five years—and how you can replicate that same success today.

How It Works

Back then, I made three arguments:

1. A young professional earning $70,000 a year and, being very disciplined, managed to save about two-thirds of that income, could use the stock market to build a substantial nest egg in half a decade.

Firms increasing their dividends in 2020, of all years, are sending a powerful “payout confidence” signal to Wall Street:

Our dividend is safe—so secure, in fact, that we’re hiking it. Watch our stock price follow.

The bigger the increase, the greater the level of confidence. In a minute, we’ll investigate five of these dividend buy signals.

S&P Dow Jones Indices’ Howard Silverblatt writes that there were 309 dividend increases during the third quarter, versus 102 declines—better than the 244 versus 639 “upside-down” split from Q2. (Though we’re still grading worse than this quarter last year, when 426 firms raised and only 94 cut.)… Read more

It’s the most common rule in investing: if you want to cut your risk (and protect your dividends!), you need to diversify.

Yes, we’ve all heard it before, but what most people don’t get is just how much you can damage your finances by not sticking with it—or, conversely, how much you can reap in gains (and safe dividends) by following a smart diversification strategy.

From $0 to $1 Million in Assets … and Back to $0

I’ve seen this play out firsthand; a friend was an early employee at a social media startup that got a big investment from a tech billionaire.… Read more

Successful dividend investing is simple, though not necessarily easy. There are nuances which trip up many investors (including most professionals!). These twists and turns create “yield alpha” opportunities for contrarian-minded income investors like us.

If everyone else in the market were perfectly grounded and calculated, there would be no chance for us to make above-average returns. Thanks to these inefficiencies, we are able to bank big yields and price gains in Dividend Land. Ready to retire on dividends? Follow these five steps and we’ll do it together. Let’s start with an obvious yet underappreciated rule for income investors.

Step 1: Count Your Dividends

Since we focus on high yield, most of our returns come from the “yield” component of stocks.… Read more

My indicators are pointing to one thing right now: higher stock prices, with new all-time highs next year. So this is a great time to lock in some fresh 8%+ payouts—before their prices race away from us!

But wait a minute. The economy stinks and our political process seems more dysfunctional than ever. So why would stocks climb from here?

Money Printer Goes Brrrrr…

The answer lies with Fed Chair Jay Powell’s printing press monetary policy. Since March, he’s been flooding the economy with liquidity. Other central banks around the world have been generous, too.

Powell Goes All In

We both know that printing buckets of money is a recipe for higher inflation.… Read more

If you have $100,000 to invest, you can easily use it to unleash a dividend stream that pays you $940 a month. That’s $11,280 a year in dividends—on just $100K!

I know you’re probably thinking this sounds too good to be true (and you should be!), especially when 10-year Treasuries dribble out just 0.7%, and the typical S&P 500 stock isn’t much better, with a 1.7% yield.

You’re not retiring on either one of those meager payouts!

But $100,000 invested in a fund with an 11.3% dividend yield (like the one we’ll dive into below) gives you a good start toward clocking out, and on a modest nest egg, too.… Read more

We can’t take every dividend we see at face value. Especially when we’re talking about 8%, 9% and even 10% yields.

Bull markets, government stimulus, money printing and the scent of all-time highs might give the impression that any stock is safe. Unfortunately that isn’t the case. Even in a bull market, there are dividend traps paying 8% to 10% that’ll sink despite the broader rising tide.

The market might have taken a deep breather earlier this spring, but multiple expansion hardly slept a wink. Thanks to battered earnings, the S&P 500 has only gotten more expensive as the year has rolled on.… Read more

These days, you can be forgiven for thinking a wave of bankruptcies is going to hit your portfolio (and your dividends!). But there’s no need to worry: this so-called “wave” is way overhyped—in fact, it could send your portfolio higher.

It’s just one more upside-down thing we investors have to deal with in this crisis.

And get this: you could line yourself up for triple-digit returns (and 8%+ dividends!) if you tap into investors’ (overwrought) bankruptcy fears through a corporate-bond-focused closed-end fund (CEF). I’ll have a ticker (paying a monthly dividend yielding 9.2%) in a moment.

First, let’s dispel one myth: that COVID-19 is behind all the bankruptcies we’re hearing about these days.… Read more