These Fat 9% to 24% ETF Yields are Traps

Brett Owens, Chief Investment Strategist
Updated: January 27, 2018

I told you that the Infracap MLP ETF (AMZA) was a dog. Well, the fund just cut its dividend by 37%.

This is one of the biggest ETF payout cuts in recent memory, and it’s a gut punch to shareholders who rode out massive underperformance for the income tradeoff. That payout mattered. Just look at the difference between price returns and total returns in the chart below:

Just because a yield is wrapped in a fancy ETF wrapping doesn’t mean it’s safe.

This ETF dividend slash could be the first of several. So let’s talk about three ETFs – which pay between about 9% and 24% – whose dividends are far from secure.… Read more

These 3 Dividend Stocks are Dead Meat on the Next Pullback

Brett Owens, Chief Investment Strategist
Updated: January 26, 2018

The stock market is overdue for a correction (to say the least). And when the rising tide pulls back, certain dividend dogs will be exposed.

It’s all well and good to chase 5% and 6% dividends as “bond proxies” when the market continually grinds higher. It’s another story when stocks begin to wobble – and an entire year’s worth of yield is jeopardized in a down week!

Of course some dividend stocks will hold up just fine. But we’re going to pick on three that are likely to be exposed when the bullish music stops.

Gladstone Investment (GAIN)
Dividend Yield: 6.8%

Back in July, I highlighted Gladstone Investment Corporation (GAIN) as a business development company stud amidst a pair of BDC duds.… Read more

These 2 Stocks Are Circling the Drain: Sell Now

Michael Foster, Investment Strategist
Updated: January 25, 2018

The S&P 500 has already increased in value by over $1 trillion in 2018—and January isn’t even over yet!

What’s behind this incredible bull market isn’t euphoria or hysteria—it’s actually sound investing principles. As I wrote in a January 18 article, the bull market is being driven by the best possible trend: higher earnings and sales for America’s best companies, which is itself the result of improving economic conditions for everyday Americans.

Parties ultimately end, of course. And this one is no different—the bull market is being driven by a solid and reasonable belief that American companies will go up in value.… Read more

These 4 REITs Will Thrive as Rates Rise

Brett Owens, Chief Investment Strategist
Updated: January 24, 2018

“First-level” investors – those who buy and sell on headlines – mistakenly believe that real estate investment trust (REIT) profits will suffer if rates rise.

Sure, in the short run, the “rates up, REITs down” theory puts on quite the show. When the 10-Year Treasury’s yield rises, REITs usually fall. And when its yield drops, REITs usually rally. This inverse relationship tends to hold up over multiple days, weeks and even months:

A Short-Run Seesaw Between REITs and T-Bill Yields

However the “long view” shows that many of these short-term moves are merely noise. It is possible for REITs and higher rates to coexist in profitable harmony:

But Long-Run REITs and High Rates Can Co-Exist

Investors who are bailing on REITs are missing out, because they are currently paying their highest yields this decade:

Highest REIT Yields Since the Financial Crisis

Most income hounds get it wrong.… Read more

How to Tap “Accelerating” Dividends for 12% Yearly Gains for Life

Brett Owens, Chief Investment Strategist
Updated: January 23, 2018

If you want to clobber the market in 2018—and beyond—then buying companies with accelerating dividends is an absolute must.

And I’ve got good news for you: there’s never been a better time to buy them.

That’s because dividend growth is on a sugar high: on January 6, research firm IHS Markit predicted that global dividends would jump 10% this year—a new record.

What’s more, if you’re looking to grow your nest egg fast, you’re in luck, because accelerating dividends are the beating heart of my personal 3-step system for banking 12% annual returns for life.

I’ll tell you all about this safe, simple approach, and why that 12% number is vital, in just a moment.… Read more

5% Dividends, $0 in Tax: Here’s How

Michael Foster, Investment Strategist
Updated: January 22, 2018

There are, as I write this, 3 high-yielding funds giving investors over 5% in dividend income. Plus they pay out every month, tax-free.

All 3 sold off at the end of 2017. And I’m watching one group of investors who are waiting to buy back in when a “time limit” I’ll explain in a moment expires in the next few weeks.

That makes now a good time to buy. Because when this “deadline” comes and goes, I expect all 3 of these funds to rise.

Before I show you these funds, I want to give you the inside scoop on this unique situation.… Read more

The 5 Dumbest High-Yield Funds (Ranked Worst to Just “Bad”)

Brett Owens, Chief Investment Strategist
Updated: January 19, 2018

Exchange-traded funds (ETFs) shattered growth records in 2017, with inflows topping $464 billion last year. The global ETF market now boasts more than $4.5 trillion in assets, and a large part of the appeal has been driven by dirt-cheap fees.

But many of these fund’s fees are “cheap for a reason.” We’ll talk about five today that lure investors in with appealing current yields – but then proceed to dump their dumb money out the back door.

These five funds may have sweet dividend yields, but they have produced sour total return results thanks to one fundamental flaw or another.

ETRACS Linked to the Wells Fargo Business Development Company Index ETN (BDCS)
Dividend Yield: 8.7%

One of the most basic appeals of the exchange-traded fund is the cheap diversification they provide.… Read more

3 Clicks for Market-Crushing Gains (and Dividends) in 2018

Michael Foster, Investment Strategist
Updated: January 18, 2018

I’m about to show you 3 funds to buy for the raging bull market we’ll see in 2018.

You read that right. After a massive 22% gain in 2017, stocks still have room to run, no matter what the naysayers tell you.

Before we get to these 3 funds—with dividend yields up to 8%—I want to tell you why the negative Nellies are all washed up when it comes to the outlook for stocks this year.

Then we’re going to “pick our spots,” highlighting the 2 fastest-growing sectors of this surging market (both of which our 3 fund picks are dialed into) to grab the highest dividends and upside!… Read more

The Secret to 162% Gains From Safe Blue Chip Dividends

Brett Owens, Chief Investment Strategist
Updated: January 17, 2018

While most income investors are reaching for big yields right now, a small group of “hidden yield” stocks are quietly handing smart investors growing income streams plus annual returns of 12%, 27.1% and even 54% or more per year.

So if you want to double your money every few years – and double your income as well – then you need to focus on the seven stocks I’m about to share.

Rule #1: Dedicate Some Cash to Dividend Growth

As I wrote in this month’s edition of the Contrarian Income Report, our portfolio pays 7.5% today. And I can even get you 8.3% yields on new money, by focusing on our seven best buys.… Read more

Why 2018 Will Be the Year of the REIT (and 2 to Buy Now)

Brett Owens, Chief Investment Strategist
Updated: January 16, 2018

Lately, I’ve heard more real estate bulls touting rental property as the perfect retirement investment.

Truth be told, it can be.

You probably know people who’ve built a nice income stream in their golden years from a well-chosen set of rentals.

Trouble is, there’s a big—and too-often glossed over—problem with being a property baron: it’s not the easy ride housing fans make it out to be! That is, unless you like being on duty 24/7 to fix clogged toilets, chase down deadbeat tenants and deal with noise complaints.

I don’t know about you, but that’s not how I plan to spend my golden years.… Read more