Today, I’m going to warn you about five stocks with yields of 7% or more that should be avoided at all costs. They are my next “dividend disaster” candidates that are likely to either reduce their payouts, or lose 20% or more in price, or both.

Big current yields have nothing to do with safety. Consider these year-to-date performances from high-yielding companies that started 2017 with juicy yields, but at some point cut or suspended their dividends:

• Windstream: Yielded 7.5%, lost 75%
• Mattel: Yielded 5.5%, lost 45%
• GNC: Yielded 7%, lost 26%

I warned you to sell Mattel late last year, before its dividend cut.… Read more

One thing investors ask me about all the time is return of capital, or ROC.

In a nutshell, these folks are mainly worried that ROC is simply a fund taking your money and paying you a dividend from your money without actually making a positive return on it.

Worse, they’re doing this after taking out their fees, which are much higher than the fees you’d pay on an index fund!

Before you get your pitchfork out, know that this perception of ROC is wrong. In reality, return of capital is often very good for investors.

For starters, ROC isn’t simply a fund taking your money and giving it back to you.… Read more

How much money do you need to retire on dividends alone?

This is a better question to ask than the typical “magic number” formula that most “first-level” thinking firms tout. Let’s review why their approach is fatally flawed, so that we can derive a more reliable method of our own based in actual reality (and funded by actual dividend payments.)

Fidelity Says What?

You should aim to have 10 times your final salary in savings.

But why? I suppose they are claiming that, if you earned $100,000 in your final year working, that you’ll want to earn this much in income every year for the rest of your life.… Read more

Any way you slice it, it was a big bet.

I’m talking about the legendary wager Warren Buffett made with hedge fund manager Ted Siedes a decade ago.

You may recall this $500,000 gamble. It went like this: if hedge funds could beat the S&P 500 over a decade, Siedes would win. If not, Buffett would win.

The result: the index crushed the funds Siedes chose, prompting him to concede defeat last May.

He went down fighting, though, writing that it was the hedge funds’ global focus that caused them to underperform, not the prevailing “wisdom” that stock picking is little more than gambling.… Read more

Today I’m going to show you how to get in on America’s hottest real estate with zero fees and commissions.

And you can buy from the convenience of your brokerage account. Simply by typing in a few stock tickers.

Think about this “zero fee” thing for a moment: with the average realtor whacking clients with 6% in fees and commissions, we’re talking thousands of dollars of savings here!

Instead of paying these commissions, you’ll be able to collect them as monthly or quarterly payouts (or dividends) to fund your retirement. Here’s what you need to do first.

Your Job: Collect the Income

The fat rent checks from the properties we’re going to invest in (more on them below) will soon have you yielding double digits on your original buy.… Read more

Think it’s time to sell – or avoid – tax-advantaged municipal bonds ahead of the upcoming tax battle?

Think again. There are several compelling reasons why muni bonds are still buys for most income-focused investors.

First, the top federal tax bracket will still be a hefty 35%. Which means, if you’re a top earner, munis will still boost your yield by more than one-third.

No matter what tax plan is approved, municipal bonds will continue to be tax-free at the federal level. The GOP isn’t touching the federal income tax exemption for municipal bonds, which means win or lose, Uncle Sam won’t touch that income (which means tax-equivalent yields up to 9.6%, which we’ll discuss shortly, will still be in play).… Read more

“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

The theory backing up this price action says that, because REITs borrow money to grow their property empires, they need cheap cash.… Read more

There’s a terrific buying opportunity taking shape in the municipal-bond market. Almost no one sees it coming, and you can thank a familiar friend for it.

I’m talking about the Fed—specifically Janet Yellen’s irresistible urge to hike interest rates in December, low inflation be damned.

She recently made that intention crystal clear, and futures markets responded by baking it in, with rate-hike odds leaping from a 30% chance to 76.4%:

Final Notice: A Christmas Rate Hike Is Coming

Stocks, for their part, have proven resilient, though there are still bargains to be had despite the market’s climb this year.

But there’s another place where you’ll find even better bargains if you’re patient.… Read more

You’re not the only one worried about high stock prices.

The lurking (and perhaps overdue) bear has other income investors worried, too. So let’s talk about the best buys for those of you worried about a stock market pullback of 10%, or 15%, or more.

We’ll start with some stalwarts from our Contrarian Income Report portfolio that weathered the last storm. Ironically (and probably fittingly) it happened off the bat – we launched our service, and the S&P 500 promptly dropped 10%!

No problem for us, though. In fact, subscribers who focused on their own holdings rather than the financial news may have missed the broader carnage altogether.… Read more

If you’re a dividend fan and you spot an 18% yield, you’re going to sit up and take notice.

But your radar will also probably go up for another reason: you know outsized payouts like that pretty much always come with outsized risk too.

Which brings me to the weird funds I’m going to show you today.

Their 18% average yield masks something shocking: they’re not only dangerous but they’re not even income investments! They’re something else entirely—and if you fail to pick up on that and buy, they could blow a hole in your retirement portfolio.

Let me explain, starting with…

Where We Found These 18% Payouts

The funds I’m talking about are called exchange-traded notes (ETNs), a close cousin of exchange-traded funds (ETFs), another asset class I recommended staying clear of in a September 12 article.… Read more