Remember seven months ago, when investors were freaking out over North Korea and a future trade war?

They were also wringing their hands over popular volatility funds like the VelocityShares Daily Inverse VIX (XIV), which blew up in February and destroyed millions of dollars of invested cash.

All of these shocks sent the S&P 500 tumbling over 10% in a matter of days!

But if you sold off then, you missed out on huge profits:

The High Cost of Giving in to Fear

This chart makes it pretty clear that dumping stocks on scary headlines is a terrible idea. But that doesn’t stop a lot of investors from making this same mistake over and over.… Read more

One of the best characteristics about dividends is they usually offer a consistent, preferably growing stream of income. However, investors can easily fall into the trap of becoming complacent that future payments will continue to flow in, even when the business isn’t generating enough cash to fund the dividend.

The higher the yield being offered generally means the riskier the dividend is and sometimes losses can outweigh the expected income. For example, Dynagas LNG Partners (DLNG) cut its 16% yield back in April and shares are down 24% since.

With government bonds paying around 2% to 3%, dividends above 10% need to be scrutinized closely and I’ve identified two that are in danger of disappearing.… Read more

It’s a question I get from investors all the time (including subscribers to my CEF Insider service): how should I invest when interest rates rise?

Because fear of rising rates is common among investors, there’s a hidden trap here: if you react to this worry, you will lose money. Instead, you need a second-level understanding of rates so you can bet against this fear and make money. (I’ll also give you 3 great buys that let you quickly and easily pull this off below.)

What Most People Get Wrong About Rising Rates

Here’s the common thinking on rates: as they head up, rising yields on US Treasuries will make these investments more attractive than large-cap US dividend stocks.… Read more

Even with the 10-year Treasury “rallying” of late, it still pays just 2.9%. Put a million bucks in T-Bills, and you’re banking $29,000 per year. Barely above poverty levels!

Hence the appeal of closed-end funds (CEFs), which often pay 8% or better. That’s the difference between a paltry minimum-wage income of $29,000 on a million saved or a respectable $80,000 annually.

And if you’re smart about your CEF purchases, you can even buy them at discounts and snare some price upside to boot!

Here’s why: CEFs (unlike their ETF and mutual fund cousins) have fixed pools of shares. Meanwhile their prices trade up and down like stocks – which means these funds can sometimes trade at a discount to the value of their underlying assets!… Read more

We’re 11 days into September, and if you’re like many folks, you’re probably just a little on edge—expecting the bottom to fall out of stocks any minute.

The truth is, there’s very good reason to be nervous.

After all, according to Bespoke Investment Group, September is the worst month for stocks, with the S&P 500 averaging a 1.05% drop since 1928.

That may not sound like much, but remember that it’s just the average. Some Septembers have been far worse. For example, let me take you back to September 2011, when the market tanked 6.4% in just 21 trading days.

That’s enough to bleed $6,400 off every $100k invested in very short order.… Read more

We’ve seen a lot of volatility and fear in 2018, and that’s handed us a great buying opportunity—particularly in the 5 unloved funds I’ll show you below.

Make no mistake: each of these 5 despised funds is poised for serious upside before 2018 is out … and they’ll pay us 8.2% average dividends, to boot. That’s enough to hand you $3,400 a month on a $500k nest egg! Before we get to them, let’s take a look back at the year so far and see what’s handed us this terrific opportunity.

History Is Set to Repeat

If you bought closed-end funds (CEFs) back in early March, when the market tanked and I urged investors to buy, you’d be enjoying a nice double-digit total return in just 6 months:

Hated CEFs Turn the Corner

Why did these 3 funds—the Reaves Utility Income Fund (UTG), the Cohen & Steers Infrastructure Fund (UTF) and the DNP Select Income Fund (DNP)—all of which I recommended back on March 1—soar?… Read more

You might think a $500,000 nest egg isn’t enough to retire on, and I wouldn’t blame you. The financial media loves to tout $1 million as the end-all be-all mark of financial security.

But today, I’ll show you how wrong they are, and how secure you can be even with just half of what “conventional wisdom” says you need – as long as you’re in the right kind of dividend stock.

And I’ll also show you exactly what kind of dividend stocks you need to get the job done and the bills paid.

Those bills, by the way, come every month.… Read more

Investors tend to gravitate toward low-dollar stocks for multiple reasons, but they’re not usually known for offering high dividend yields. That’s why I look for companies trading under $10 that offer attractive “starter dividends.”

The current yield might not stand out in these cases, but that’s often because the underlying stock has been a steady gainer. If management is growing the business and rewarding investors with a relatively new dividend, these stealth names can quickly build wealth both through higher prices and a growing payout.

Starter Dividend Under $10 No. 1: Recurring Revenue Offers Much-Needed Security

ADT (ADT) offers security monitoring services and was taken public in January at $14, by the private- equity firm Apollo.… Read more

Readers often ask me how to build a portfolio that holds its own in down times but hands them more income than the measly 2.6% long-term US Treasuries pay.

So today I’ll show you how to do that. With the 4 bargain-priced closed-end funds (CEFs) I’ll show you below, which also boast strong track records and high income streams, you can keep the dividends flowing, regardless of the market’s tantrums.

An added plus? Your nest egg will be spread across asset classes, giving you extra protection.

Buy No. 1: A Buffett-Friendly CEF With Big Upside

With a long-term average total return of around 8.5% per year, US stocks need to be at the heart of any income portfolio.… Read more

If you’re worried that stocks are expensive, well, they are. The current bull market is making a run at history. But it’s also costly to stay in cash (and lock in zero income). Fortunately, it’s possible to buy some downside protection with yield (hint: think recession-proof REITs – real estate investment trusts).

I understand the “I’m worried so I’m sitting in cash” concern. And I know many investors who continue to sit on their money and hope for a big pullback. But wouldn’t it be nicer to bank 32% total returns with 8%, 9% or even 10% or more of it coming as dividends?… Read more