7 Screaming CEF Buys With 9.3% Yields and 50% Upside

Michael Foster, Investment Strategist
Updated: April 11, 2017

A few days ago, I showed you exactly why now is the time to be greedy—not fearful—when it comes to stocks.

And now, buried deep in the latest gross domestic product (GDP) report is a tiny data point that proves I’m right. It’s the clearest signal in years that now is the time to buy.

I’ll show you 7 funds perfectly positioned to take advantage while handing you safe dividend yields up to 9.3% in just a moment. First, let’s talk about that under-the-radar signal I mentioned.

The report’s headline number showed that fourth-quarter GDP rose 2.1%, slightly above economists’ expectations of 2% growth.… Read more

5 Big Dividends (up to 9.7%) That LOVE Higher Interest Rates

Brett Owens, Chief Investment Strategist
Updated: April 10, 2017

We hear it every single time the Federal Reserve raises rates, or even merely hints at it!

“Higher interest rates will crush dividend stocks – especially high yielders.”

Sounds scary – but it’s simply not true. And we’ll highlight five picks paying up to 9.2% that will prove just that.

Many high-yield dividend payers don’t care about the interest-rate boogeyman – and some actually outperform the market when the Fed lifts rates. Consider this research from index provider MSCI (MSCI) studying 88 years of market history up through July 2015 (emphasis mine):

“We found that, when rates were low to begin with, high-dividend stocks outperformed the market by an annualized 2.4 percentage points when rates started to go up.Read more

Five 8-10% Yielders That Can Actually Grow Your Portfolio, Too!

Brett Owens, Chief Investment Strategist
Updated: April 7, 2017

Many investors think they need to choose between current income and price upside. They don’t.

In a moment, I’ll highlight five stocks paying between 8% and 10% with 40% upside to boot.

Let’s face it – growth matters. It’s the best way to retire on a nest egg of just $500,000:

How to Stretch Your Investment on $500,000

The table above assumes a nest egg of half a million dollars that yields 8% a year, and absolutely no dividend reinvestment – here, you’re putting every cent of income into your pocket. Look how much that $500,000 expands over just a few years as you’re able to achieve more capital gains out of it.… Read more

My Top Buy for a 6.6% Yield and “Crash Insurance”

Michael Foster, Investment Strategist
Updated: April 6, 2017

The past year has been good for the S&P 500: it’s up about 15.7%, including dividends.

So if you’re simply tracking the index through an exchange traded fund, congrats. That’s a decent gain.

But I’ve got one simple trick—and a far superior fund buy—that can help you do even better … and grab a big chunk of your gain in cash, too.

That trick? Covered calls.

Covered what?

Covered calls are a strategy in which investors buy stocks and sell call options against those stocks.

Think of call options as a kind of insurance; investors buy them if they are short the market and want to protect themselves from blowing up in case the market rallies.… Read more

Six Infrastructure Plays That Pay 6%+

Brett Owens, Chief Investment Strategist
Updated: April 5, 2017

A $1 trillion infrastructure proposal is officially on the way later this year. Should we income investors buy any stocks now?

The answer’s yes – provided we avoid the popular names. After all, would you want to place your retirement hopes on the next spin of this roulette wheel?

Spin the Wheel on Retirement?

Caterpillar (CAT) is an industrial name you’ll hear mentioned often by stock pundits in the coming months. It’s a “cyclical” company that may indeed benefit from Trump’s trillion. But CAT buyers are taking on a lot of price heartburn for a modest 3.3% dividend.

And some popular picks pay even less.… Read more

3 Terrible Funds for Retirees – and a Better Buy Now

Michael Foster, Investment Strategist
Updated: April 4, 2017

In my last article, I pointed out that the S&P 500 is far from overpriced right now. All you have to do is dig a bit deeper than first-level investors to see that this is true.

And while I do think it’s a good idea to buy stocks right now, I don’t think the SPDR S&P 500 ETF (SPY) or Vanguard 500 ETF (VOO) are good ways to do it.

Before I get into why, let me first explain what these funds are.

VOO and SPY are passive index funds whose job is to track the market, not beat it.… Read more

My No. 1 Buy for 200% Dividend Growth and 100% Upside

Brett Owens, Chief Investment Strategist
Updated: April 3, 2017

Have you ever read something in the financial media and thought: is this even news?

I know. Every day, right?

I had that feeling on March 21, when I read a Bloomberg story saying that one type of stock—dividend growers—outperforms all others as interest rates rise.

To back it up, Bloomberg and Goldman Sachs (GS) looked at the performance of 50 stocks the bank sees as likely to hike their payouts by an average of 12% this year. (I’ll reveal—and rank—the 4 strongest names from this list in just a moment.)

The verdict? The “Goldman 50” beat the market between the end of June 2016 and March 21 of this year—a period that saw the Fed drop two quarter-point rate hikes on us.… Read more

5 “Dead Money” Dividend Aristocrats To Avoid

Brett Owens, Chief Investment Strategist
Updated: March 31, 2017

The S&P 500 Dividend Aristocrats are a group of stocks beloved as “widows-and-orphans” investments – can’t-miss companies whose stability and rock-solid dividends will keep you into old age and will exist long after you’ve passed. It’s a reassuring thought, but ultimately, it’s an illusion. Like the broader S&P 500 and the stock market as a whole, some of its members are good investments, and some – including five losers I plan on highlighting today – are not.

I love the term “dividend aristocrat” … but only because it’s more honest than most people realize. The word “aristocrat” can refer to people who are many things, including superior, better able, smarter and wiser.… Read more

3 Reasons Why This Market Still Has Room to Run

Michael Foster, Investment Strategist
Updated: March 30, 2017

The S&P 500 now sports a price-to-earnings ratio of more than 26—a huge number at a time when corporate profits are actually down more than 5% since 2014.

You read that right. Investors appear to be overpaying for falling profits.

Look closer and things seem scarier. In August 2000, at the height of the dot-com bubble, the S&P 500 had a P/E ratio of 28, just 6% above its current level. If the stock market continues to perform as it has in the last few months, we could get to that same level by summer.

Then look at volatility.

The CBOE Volatility Index, often called the “fear indicator,” is currently 13 and was below 10 just a few months ago.… Read more

Three Brazen Insiders Buying Their Own 10%+ Yields

Brett Owens, Chief Investment Strategist
Updated: March 29, 2017

There’s been a mini-wave of insider buying in the BDC (business development company) sector. This is worthy of our attention for three reasons:

  1. These firms pay fat 10%+ yields,
  2. Their stocks are trading far below book value, and
  3. The buyers are all founders who know exactly where their corporate bodies are buried.

So do they also know when their stock is too cheap?

We’ll analyze each case in a moment. First, let’s consider why – contrary to popular belief – certain BDCs may indeed be poised to roll higher alongside interest rates.

Traditionally, BDCs suffer as rates rise because they generate income from fixed rate investments.… Read more