With 2020 coming to a (merciful) close, it’s a good time to take a moment to cast an eye over our dividend portfolios.

One thing to pay particular attention to: the amount of cash you’re holding. Because if you’re like many investors I’ve talked to recently, you’re holding too much of it—and that can cause a steady wealth drain that bleeds away thousands in returns every year!

Taking Money Off the Table—at Exactly the Wrong Time

Of course, having a healthy cash cushion is always a good thing. The trouble for most folks, though, is that they’ve been growing the amount of cash they have outside the market just as stocks have taken off.… Read more

Imagine investing a million dollars and getting back… a pathetic $16,000 in income every year.

You don’t have to imagine—because that’s exactly what you’d get if you bought the average S&P 500 stock today, which yields a sad 1.6%. That’s not much and these days, you can lose that in one afternoon!

No wonder dividends get no respect!

But I’ve got good news: that 1.6% doesn’t matter a bit to us. In fact, it’s a distraction from the real opportunity I want to show you: a dead-simple, 3-step shot at a much bigger payout.

I’m talking about 6%+ in cash here.… Read more

The mainstream crowd has gotten way too greedy—which means we could be in the teeth of a stock-market selloff within weeks.

Most folks hear the word “selloff” and gasp. But not us contrarian dividend hounds! We know that volatility is our friend. It’s easy to see this just by looking at what the market’s done in the last five years. You’d have amped up your performance a lot just by buying the dips.

Buy and Hold? Nah. The Timing of Your Buys (and Sells) Matters

This year is a classic example. If you’d bought the typical S&P 500 stock on the first day of February, pretty much at the go-go peak of early 2020, you’d be sitting on a 15% total return now.… Read more

If you’re like most people these days, you’re desperately searching for any kind of meaningful dividend stream.

Finding one is no easy task. The S&P 500, after all, yields 1.5%, on average. Treasuries? With their 0.9% yields, they’re not even worth talking about.

With the old income go-tos off the table, plenty of folks are looking further afield. Some are boosting their holdings of high-yield bonds through exchange-traded funds like the SPDR Bloomberg Barclays High Yield Bond ETF (JNK). Others are going with more esoteric investments, like high-yielding business development companies (BDCs), which you can tap through the UBS Etracs Business Development Company ETN (BDCS).… Read more

When April 1 rolled around, many mortgage payments were made late. That was no joke—we were in the midst of our first (and most serious) round of lockdowns.

Who knew what bills were going to get paid, if any?

Mortgage REIT (mREIT) stocks, which require mortgages to actually be paid, suffered broadly and badly. Some shares, such as industry bellwether Annaly (NLY), dropped as much as 60% in just more than a month. This plunge crushed many income investors, who rely on the fat dividends paid by the sector (11.2%, on average!) to fund their retirements.

Now, mREITs don’t actually own or operate any real estate (unlike their REIT cousins).… Read more

What exactly are we to do in this levitating market? Buy more? Pull back? Do nothing?

I get why most folks are uneasy these days—they’re seeing the stock market, and particularly tech stocks, heading into the stratosphere, while the economy that supports them is a mess. Stocks can’t hang in midair forever, the thinking goes. Eventually they’ll plunge to earth.

A (Pleasant) Surprise in a Lousy Year

Don’t buy this argument. Because in the weird market we’re in, stocks can not only hover but actually rip higher and hand us growing dividends, too. Let me show you what I mean, starting with the economy.… Read more

Is the 60/40 (stock/bond) portfolio now 100/0 in favor of stocks?

That’s been the subject of several financial headlines lately. The authors are suggesting that the traditional mix of 60% large-cap stocks and 40% safe bonds won’t generate enough money for us to retire on unless we’ve got a cool $10 million or so. And, they’ve got a point, with the S&P paying less than 2% and US Treasuries yielding under 1%.

But even a 100/0 portfolio won’t help you too much. Put it all in the popular SPY ETF, and we’re still under 2%! Plus, this “heart attack kid” can fluctuate by 1% or even 2% per day.… Read more

With stocks breaking to all-time highs, we should emphasize security of the dividends we’re purchasing first and foremost. In previous months, it was a good time to be greedy. Now, with other investors in a fervor, let’s be careful.

The main thing we don’t want to do in a pricey market like this? Join the millions of “buy and hopers” out there. I call them that because they “buy” the typical S&P 500 stock and then “hope” for gains.

They’re sure not buying for the dividends: the popular names pay a poverty-level 1.6% income stream, on average.

With a lame yield like that, hoping for a jump in the share price is the only play you’ve got!… Read more

There’s no doubt in my mind: five years from now we’ll look back at this time and say it was a golden opportunity to buy dividend stocks.

Those who bought in will be sitting on big gains (and income streams!). Those who sat on their hands will kick themselves.

I don’t want you to be in that latter group, which is why, in just a second, I’ll point you to a 6.9%-paying fund that’s perfectly positioned for serious gains in 2021 and beyond.

Dividends Back in Vogue

I know I don’t have to tell you that the dividend landscape has been bleak since March, with plenty of “sacred cow” dividend payers, like Disney (DIS) and Ford (F), dumping their payouts entirely.… Read more

Mortgage payments. Car payments. Cell-phone bills. Power bills. Water bills. Credit card bills.

Yuck. They’re the only downside to being retired!

These bills show up (or debit our accounts) every single month. That’s OK when we have a normal j-o-b that pays us every couple of weeks, or every month. But this regular bill gets really old when we retire.

Like you, I prefer to retire on dividends (and leave my nest egg alone). Problem is, most dividends are paid out every quarter, not every month.

So, dividend cash flow is (unfortunately) often out of sync with every-30-day expenses.

Some income investors build out complicated dividend calendars that get knocked out of whack whenever they ever have to sell certain stocks.… Read more