How to Generate $112,000 in Retirement Income From a $500,000 Portfolio

Brett Owens, Chief Investment Strategist
Updated: November 5, 2016

Today I’m going to show you an easy way to use the S&P 500 Dividend Aristocrats—companies that have hiked their dividends for 25 straight years or more—to build a durable income stream you can retire on.

But before I do, there’s something I need to tell you about these 50 companies, which are “sacred cows” in many investors’ eyes: the fact they’re in this exalted club today doesn’t mean they will be in the future.

Consider ExxonMobil (XOM), a long-time Aristocrat that’s losing money fast and may be forced to slash its payout.

I know I don’t have to tell you what investors who are relying on XOM’s 3.6% dividend would do if their quarterly “paycheck” suddenly dropped in half.… Read more

3 Recession-Proof REITs With 20% Upside in 2017

Brett Owens, Chief Investment Strategist
Updated: November 4, 2016

What a difference three months makes.

Back in the summer, real estate investment trusts (REITs) were all the rage—especially after a dismal May jobs report put the final nail in the coffin of a summer rate hike.

Fast-forward to today, and we’re looking at a rate hike that’s a 72% certainty at the Fed’s December meeting, according to traders betting through the Fed funds futures market:


It’s no coincidence that the air has gone out of the SPDR Dow Jones REIT ETF (RWR), a popular REIT index fund, as that late-year increase has grown more certain:

RWR’s Big Rise—and Fall


It’s a classic case of the herd falling for an old myth: that REITs underperform when interest rates rise.… Read more

How To Live Off $500,000 Forever

Brett Owens, Chief Investment Strategist
Updated: November 2, 2016

A half-million dollars is a lot of money. Unfortunately, it won’t generate much income today if you limit yourself to popular investments.

The 10-year Treasury has “rallied” to 1.85%. Put your $500K in them and you’re well below the single-person poverty level at $9,250 annually. Yikes.

Dividend paying stocks are masquerading around as bond proxies for this reason. But they still don’t yield enough. Vanguard’s popular Dividend Appreciation ETF (VIG) pays 2.1%. The iShares Select Dividend ETF (DVY) pays 3.2% – better, but that’s still just below the poverty level for two people at $16,000 per year.

When investment income falls short, retirees sell their investments to supplement the income.… Read more

4 Popular Dividend ETFs You Need to Dump Now

Brett Owens, Chief Investment Strategist
Updated: October 31, 2016

I hate to say it, but right now, thousands of investors are putting their portfolios on autopilot right when they need to take control the most.

I’m talking about the boom in “passive” investing, or bypassing stock picking and plowing your cash into low-fee exchange-traded funds (ETFs) instead.

Some income-starved investors are going further, piling into ETFs that hold stocks with either above-average yields or strong dividend growth.

A Brilliant Strategy … Until It Isn’t

In theory, it’s a smart move. After all, companies that pay—and better yet regularly hike—their dividends have a history of outperforming stocks with no payout at all.… Read more

Sell These 6 mREITs Immediately

Brett Owens, Chief Investment Strategist
Updated: October 28, 2016

Real estate investment trusts (REITs) are an important component of a high yield portfolio for retirees or aspiring retirees. But there is one group of exotic, tantalizing REITs that must be avoided: mortgage REITs. Especially today.

These so-called mREITs often offer high dividend yields—as high as 14% in some cases! That alone should tell you something is amiss. Unfortunately many investors get seduced by these short-term income streams, leading them straight into the arms of disaster.

What’s so bad about mREITs? Plenty, really. Let’s start with the income issue. mREITs are notorious for having uneven payouts, which means you cannot expect the next dividend to be higher or even the same as the one from last quarter or last month.… Read more

3 Infrastructure Stocks To Buy Before Election Day

Brett Owens, Chief Investment Strategist
Updated: October 26, 2016

No matter who wins the November election, infrastructure stocks should get a bounce. We’ll talk best plays in a minute – but first, let’s recap the rhetoric.

Clinton says she’ll push for a five-year $275 billion plan that, with loans and leverage, would total up to $500 billion. Trump says he’ll double that.

Of course I wouldn’t buy any stock based on a politician’s promise alone. But many industrial companies pay yields at the high end of their historical averages. Some are compelling values, especially when you consider that the global manhunt for yield has driven most payout percentages down near multi-year lows rather than highs.… Read more

3 Picks For A Secure 5% Paying 60/40 Retirement Portfolio

Brett Owens, Chief Investment Strategist
Updated: October 25, 2016

A prudent investor takes advantage of market dips. He buys oversold assets when the market panics—and stays the course during recoveries.

Unfortunately, prudent investors looking to add to their portfolios now can’t capitalize on a panicking market. This year saw two great buying opportunities: first in February when the market freaked out over global economic growth, and then again in July when Britain voted to leave the European Union. The Brexit vote only delivered a 4-day window to buy at a discount, and even then the sale was paltry—from peak to trough, the S&P 500 only fell about 5.3%:

Quick Dip, Limited Buying Opportunities


To buy this market during the downturn, you would’ve needed to act fast—and at the time many hesitated to buy in because they feared Brexit was a global catastrophe.… Read more

3 Stocks With 30% Upside in the Next 12 Months

Brett Owens, Chief Investment Strategist
Updated: October 24, 2016

A few months back, I advised you to stick to your guns and avoid the temptation to “sell in May and go away.”

I hope you followed that advice, because it looks like investors who were duped by this tired old slogan are going to miss out on gains. Here’s how the SPDR S&P 500 ETF (SPY) has performed since May 1:


Now the herd is wringing its hands over the presidential election, worried that the fallout from the circus-like race will trigger a lasting market downturn.

But recent history says they’re off base here, too. Because once the vote is over, markets typically gain ground in the first year of a new presidential term.… Read more

3 Funds To Sell Now, 1 High-Yield Replacement

Brett Owens, Chief Investment Strategist
Updated: October 21, 2016

The Wall Street Journal reports – yet again – that stock picking is dead. We’re being told that passive index funds outperform actively managed funds over the long term, and smart investors should choose passive because actively beating the market isn’t possible.

On one level, this is true. If your plan is just to buy and hold for 30 years or more, and if you don’t need any income right now, you are probably better off with a low-cost index fund than a higher-cost actively managed fund. But what if need income NOW? Then the “wisdom” of passive investing isn’t so great, and you need to consider alternatives.… Read more

Beware Of These 5 “Low Beta” Dividend Traps

Brett Owens, Chief Investment Strategist
Updated: October 19, 2016

There’s a lot of buzz about beta these days. Should we contrary-minded investors fade the fad?

Beta is industry slang for volatility. It’s generally used when judging a particular investment or portfolio with respect to the broader market, with 1.0 as the benchmark. Lower is better, as that (in theory) means the issue is less volatile than the market.

For example, Campbell Soup (CPB) has a listed beta of just 0.37 – which (again, in theory) means CPB shares are 63% less volatile than the overall market. If the S&P drops 2% in a day, CPB shares should hold steadier and lose less than 1% or so.… Read more