Let’s set aside the noise and talk about the one thing that matters most in a volatile market like this: earnings.

According to recent FactSet data, analysts expect negative earnings growth in the first quarter of 2020. That’s no surprise, given the battering the coronavirus is laying on some sectors of the economy.

But even so, the projected decline as I write was still reasonable: just 0.1%. Things can still change, of course, but it’s important to note that this modest decline comes after a fourth quarter in which earnings grew following three straight quarters of declines—and despite analyst expectations of a 1.7% drop.… Read more

The stock market is in a full-blown panic, which means it’s time for us contrarian income seekers to go shopping.

Few firms have been spared from the “flash-bear” we are experiencing. It may be an ominous sign for the rest of 2020, too. So, if you are worried about the rest of the year, but you still need income from your investments, let’s consider some steady payers that are typically more stable than the broader market.

After all, when the markets begin to function properly again–and they will, no matter how shaky things seem at the moment–these are the types of dividend payers that we want in our portfolio (at cheap prices, too).… Read more

Last Thursday, we took a close look at how closed-end funds (CEFs) holding municipal bonds—issued by states and cities to fund infrastructure projects—can help stabilize your portfolio in times like these.

Today we’re going to dig deeper and put some numbers behind how these CEFs can do even more, including handing you a dividend that’s double what you’d get on stocks—and these payouts are tax-free, to boot!

First, here’s what “munis” did during the selloff in the last week of February:

Muni Bonds Hold the Line—Literally

When stocks plummeted, munis were fine. And why wouldn’t they be? As senior government debts, municipal bonds have strict regulations and restrictions that make them less risky than stocks.… Read more

We named our income investing website Contrarian Outlook for times like these. When the rest of the world is selling everything, we are sorting through their hastily discarded dividend bargains.

Sales like this don’t happen every year. In fact, the last blue-light special actually began to wind down the last time I reminded readers to “keep calm and 8% on.” It was December 26, 2018, and the stock market had just plunged nearly 20%.

Fear was rampant, which meant it was time for us contrarians to be greedy. Or, at minimum, not panic.

I don’t take the responsibility of being your Chief Investment Strategist lightly.… Read more

I don’t know why you’d try to cobble together an income stream with miserly ETFs when, thanks to this selloff, we’ve got a huge sale on closed-end funds (CEFs) throwing off life-changing 7%+ payouts.

Why are CEFs a great deal now?

In short, the coronavirus scare has caused a “panic disconnect” between many of these funds’ share prices and the value of the assets in their portfolios, known as the net asset value, or NAV.

These discounts are a quirk that only exists with CEFs, and they make our plan simple: buy when discounts are particularly wide, then ride these markdowns higher as they evaporate—pulling the fund’s market price up with them.… Read more

When the market is selling off, it’s easy to panic as big losses rack up in your account.

Here’s the thing, though: going to cash, and fully exposing yourself to inflation, is a guaranteed way to lose. It’s doubly sad to see first-level investors doing this when there’s a time-tested way to survive meltdowns, keep your income stream intact and cut your portfolio’s volatility.

It doesn’t involve panic selling. Instead, it revolves around three simple rules: diversify, be patient and keep a big income stream. Let’s walk through each of these.

1. Diversify

The first key to surviving a meltdown is to be in several markets at once.… Read more

Let’s be honest: it’s hard not to be rattled by last week’s double-digit drop in the S&P 500.

And it’s true that if the coronavirus continues to spread, we could see more people holed up in their homes, meaning less spending and less economic activity. Some analysts are already calling for a coronavirus-driven recession.

But let’s not forget that American economic data looks very good right now. The Federal Reserve sees GDP rising a healthy 2.6% in the first quarter of 2020, even accounting for the coronavirus’s impacts. Personal incomes and spending are also rising at healthy levels, so there’s no reason to panic.… Read more

Have four months of “dead money” ever caused this much drama?

Let’s put last week’s pullback in perspective. As uncomfortable as it may have been for investors who watch the market daily, it simply served as a public service reminder that most investors are probably better off not watching the market daily.

The result of one of the worst weeks in Wall Street history? A mere return to late October 2019 price levels:

Wall Street’s Tower of Terror

Typically, an erasure of four months’ worth of gains wouldn’t be a big deal. However, this stock market had been unusually bullish, gaining nearly 12% in less than four months.… Read more

During volatile times like these, the best thing to do is this: stay calm and keep collecting your dividends.

Fighting the urge to sell is critical, because doing so could slash your dividend income by 82% or more.

Here’s where I’m getting that number: let’s say you hold the stocks in our Contrarian Income Report portfolio, which yields an average of 7.2% as I write this. (If you bought a while back, you’re likely yielding more on your investment, thanks to our picks’ dividend growth, but let’s use 7.2% as our benchmark here.)

And let’s say you’ve got a reasonable nest egg—about $350K—invested.… Read more

What are we income-seekers to do after this latest pullback? Buy more? Sit on the sidelines?

It’s the question everyone’s asking. And while no one can predict the future, the past gives us some solid hints at what might be ahead, and the moves that make the most sense for our income portfolios (including a certain 7%-paying fund that’s more than worth your attention now).

To see what I’m getting at, let’s rewind to 2002. Then, like now, we were facing the potential of a pandemic: SARS in that case. There was other dreadful news, too: the dot-com bubble had just burst.… Read more