One of the worst disasters to befall investors in this crisis was something called the MORL dividend.

MORL is—or rather was—the ticker for the ETRACS Monthly Pay 2XLeveraged ETN (MORL). What’s MORL? It’s a double-leveraged bank-issued note designed to track the MVIS Global Mortgage REITs Index, a market-cap-weighted global mortgage-REIT index.

A mouthful, right?

But the jargon and obscure nature of this investment didn’t stop a lot of people from buying in. The reason was simple: MORL yielded as much as 25% back in March.

Think about that for a minute: a 25% dividend. Hold MORL for just four years and you’d get your entire investment back in cash payouts without selling a single share.… 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

A handful of closed-end funds (CEFs) are boasting what are (at first) tantalizing dividend payouts. I’m talking 15%, 20% and even 40% annualized yields here.

Skeptical? You should be.

Today we’re going to delve into the two highest-paying funds in the CEF world and look at what’s driving their sky-high payouts. Each tells us a lot about what to avoid when buying CEFs for our portfolios.

High-Yield CEF #1: 22% Payout Masks a Dreadful Dividend History

The Cornerstone Strategic Value Fund (CLM) regularly yields more than 15%, even when average CEF yields are historically low. Now that all CEF yields are higher, due to an overall pullback in these funds’ market prices, CLM’s payout is a monster 22%.… Read more

I sure started a stir last week when I mentioned the other “I” word. Our usual beat here is income, but last week we discussed inflation and what it means for our dividend-paying bonds and stocks.

We received quite the response. A big hat tip to our excellent customer service team for fielding your questions!

I owe you a bit more detail, so let’s get into our financial FAQs this week. And while we’re at it, let me stir the pot a bit more by dropping the other “D” word, deflation.

We’re not getting theoretical for the sake of it.… Read more

This crisis has caused a lot of folks to develop a crippling fear when it comes to REITs: they see the beating mall owners like Simon Property Group (SPG) have taken and swear REITs off for good. 

To be sure, SPG took it on the chin in March, and has not gotten up:

Simon’s Business Model: Broken for Good

But way too many people think REITs are about shopping malls, and that’s about it. It’s too bad, because this first-level thinking causes them to miss out on a lot of upside—and dividend growth, too.

Beyond the Mall

Members of my Hidden Yields service know better: we wanted nothing to do with mall landlords before this crisis, because Amazon.com… Read more

You can be forgiven for not looking to the big-name tech stocks for high dividends. Just look at this rogue’s gallery of pathetic payouts!

• Facebook (FB): Dividend yield: 0%
• Amazon.com (AMZN): Dividend yield: 0%
• Apple (AAPL): Dividend yield: 0.9%
• Netflix (NFLX): Dividend yield: 0%
• Google, a.k.a. Alphabet (GOOGL): Dividend yield: 0%

Those are the so-called FAANG stocks—the darlings of the tech world. But they’re no place for retirees, or anyone else on the hunt for dividends. (Though there is one often-ignored way to get an 8.5% dividend from them; more on that in a second.)

Luckily for the folks who hold these stocks, which make up about 17% of the S&P 500, they’ve made up for their pathetic—or nonexistent—dividends in outsized price gains as the market has bounced back.… Read more

The broader market, as defined by the S&P 500, has rallied like crazy. But don’t worry, you haven’t “missed out” on anything. The rally has been carried by large, and largely non-dividend paying stocks!

Most income plays are just now getting up off the mat. We’ll discuss one of my favorites today.

Energy, for example, is in the middle of a “crash-and-rally” pattern. The ultimate cure for low energy prices is (or perhaps, was) low energy prices. Reason being, low prices force producers to slash output like crazy to save money, which in turn reduces supply which in turn boosts prices.… Read more

What if I told you I’d found a way for you to buy Microsoft (MSFT), Apple (AAPL), Home Depot (HD), McDonald’s (MCD) and other big-name stocks for 14% off their current prices?

It would be like rewinding the clock on this rebound, wouldn’t it? With stocks now having mostly erased their year-to-date losses, buying at a 14% discount would, in essence, be like buying these very same stocks back in late April:

Your Stock-Market “Time Machine”

The way to do this is by purchasing a closed-end fund (CEF) that holds these stocks. Not only do CEFs regularly trade at big discounts to their “true” value, but they also pay dividends far higher than individual stocks do—I’m talking rich payouts of 7% and up.… Read more

What a time to be alive! The stock market is booming, and many of our favorite income investments are ticking higher every day.  Surely, they are reflecting the broader optimism that investors have about the US and the rest of the world.

Hold on a sec—my publisher is reminding me that the curfew in my town just lifted on Monday. Seven days of being home by 8pm, following two months of being told to shelter-in-place. As a friend of mine pointed out, we haven’t been double grounded like this since high school.

The news is usually a downer, but these days it’s tough to make it through the headlines without a handful of Xanax.… Read more

If you’re shopping for high-yield closed-end funds (CEFs), two numbers are critical:

• The dividend: There are about 500 CEFs out there, and they boast huge payouts of 7% on average. Many also pay monthly.

• The discount: Due to a quirk in the CEF structure, these funds often trade at discounts to the per-share value of their portfolios. Called the discount to net asset value (NAV), this indicator is the clearest indicator of imminent price gains I’ve ever seen in an investment.

A Proven Gain Predictor

Thanks to the discount to NAV—which is available on any fund screener—you literally have a CEF’s market price on a string!… Read more