Today I’m going to peer into my crystal ball and give you the scoop on where high-yield closed-end funds (CEFs) might be headed in 2019.

Then I’ll give you a proven way to zero in on the ones that are the best bargains for your portfolio now.

CEFs Come Out Flying

First, if you own stocks through CEFs (and if you don’t, click here to discover why these 7%+ payers are a retirement “must-have”), you’re already outrunning the market: my CEF Insider Equity Sub-Index—a great proxy for stock-owning CEFs—is up 13.7% since January 1, a nice lead on the S&P 500’s 12.3% gain.… Read more

A stock’s yield is only as good as its cash flow because, after all, a dividend is nothing more than a promise from a company.

CenturyLink (CTL) recently reminded us of this. Its promised $0.54 per share dividend exceeded its ability to pay. The firm’s payout ratio of 130% – the percentage of profits that it was paying as dividends – was an absurd overpromise that couldn’t last forever:

CenturyLink’s Payout Promise Was Always on Borrowed Time

CEO Jeffrey Storey insisted his team remained “committed to and confident in our ability to maintain the dividend.” I understood the commitment, but questioned the confidence – taking on debt to pay dividends is a losing game.… Read more

Let’s jump into the Kraft-Heinz (KHC) mess—because it tells us a lot about how to protect our nest egg from a Dumpster fire just like it in the future.

“Dumpster fire” is no exaggeration. KHC (which investors tend to buy for safety, remember) cratered 31% in a day on February 22, after slashing its dividend 36%.  Imagine what that would have done to your retirement portfolio (and hopefully you only have to imagine!).

Further on, we’ll smoke out three stocks (including one that pays an absurd 12.9% dividend) that could easily be the next Kraft-Heinz. If you hold them, the time to sell is now.… Read more

Here’s something that might surprise you about gold: closed-end fund (CEF) managers—at least those I speak to—pay little attention to it.

We’ll dive into why right now. Then I’ll show you three gold CEFs you need to keep away from your portfolio. Because gold’s future looks nothing like the rosy past gold bugs love to use to justify their lust for the yellow metal.

So why do most CEF chiefs (not to mention celebrated investors like Warren Buffett) shun gold?

The short answer is that gold doesn’t produce anything. So when you buy it, you’re speculating that someone will buy it from you for a higher price in the future.… Read more

The Dow Jones Industrial Average and S&P 500 fell each of the final three trading days of the month, but all of the major U.S. stock indexes still finished February more than 3% higher. The result is the best two-month start for the S&P 500 since 1991.

Investors have certainly been playing offense in the first two months of 2019, as the following chart shows. Industrial and technology names have led the way higher year-to-date, while defensive sectors (healthcare and utilities) have lagged.

Source: Bespoke Investment Group

Minimal Trade Progress in Asia

President Trump was in Vietnam this week, meeting with Kim Jong Un of North Korea.… Read more

The stock market is way up and ironically, that’s terrible news for us dividend investors. Yields are in the tank yet again. The S&P 500 pays a measly 1.9% today. If you have a million-dollar portfolio, that’s a lousy $19,000 per year in income. Pathetic.

Most people invest their money in index funds like those that mimic the S&P 500. We can do better – four-times better, to be specific – and raise our dividend income by 400% simply by selling these mainstream plays and buying bigger payouts that are better values.

Specifically we’re going to discuss stocks, bonds and funds that pay 7.3% to 8% instead of the broader market’s lame 1.9%.… Read more

Today I’m going to show you a closed-end fund (CEF) yielding 13.7% that sounds—and is—too good to be true.

If you hold it, now is the time to sell.

The fund I’m talking about is Eagle Point Credit Company (ECC). Today we’re going to dive into all the reasons why ECC is a CEF to avoid. I’ll also give you five takeaway tips you can use to steer clear of funds like it in the future.

Let’s get started.

CEF Danger Sign No. 1: NAV and Market Price Go Haywire

As you can see below, ECC recently saw its net asset value, or NAV, plummet 26%, erasing three years of gains overnight:

ECC’s Underlying Portfolio Collapses …

In a normal situation, you’d expect investors to sell fast.… Read more

We contrarians stayed calm through the market’s fourth quarter hissy fit. We not only held onto our shares through November and December but we also added dividend payers opportunistically to our portfolios.

Now, it’s time for us to be a bit more conservative. Most US stocks have rallied so much that they are now “overbought.” This means they’ve gone up pretty far pretty fast and are due for a breather (or, perhaps, another correction).

Of course certain elite dividend growers are still good long-term buys at current prices (aren’t they always). And a select five-pack of these picks also represents solid short-term purchases as well.… Read more

Let’s face it: this frothy market has made it much tougher to uncover the big, cheap dividends you need to fill out your retirement portfolio. So today we’re going to fight back with my top 2 “off-the-record” strategies for honing in on 7.4%+ dividends that still have a lot of upside ahead.

First, to get a sense of the vice the rebound has locked income investors in, check out this chart:

Stock Bounce Crushes Yields

That amounts to an 18% bounce since Christmas Eve, which has sliced 15% off the S&P 500’s dividend yield (because yields fall as prices rise). As I write, the average S&P 500 name dribbles out a 1.9% payout—less than inflation!… Read more

Income investors are typically a conservative and prudent bunch. Focused on a sustainable income stream, they often look for a sign to avoid a big price drop.

So when it comes to one of the highest-yielding investments of all—closed-end funds (CEFs)—how can you know when the time has come to sell?

I’ll tackle that question with a 1-2-3 approach to CEFs that will help you avoid the kinds of value traps that promise big dividends but really deliver big losses.

Sell Signs Not Always Easy to Spot

First off, it’s easier to know when to buy than when to sell.… Read more