If you were taking a break from your family on Christmas Day, you may have caught my article on how Jay Powell’s recent “hawkish cut” is set to light a fire under high-yielding (and tax-free!) municipal bonds.

Here’s why: Jay cut rates by a quarter point in December, but gave investors a stern pre-holiday “talking-to,” with the Fed slashing its rate-cut forecast to two from four in 2025.

Stocks, as you’d expect, threw a one-day fit. But here’s the thing: The yield on the 10-year Treasury note (the so-called “long end” of the yield curve, which has a mind of its own) spiked.… Read more

2025 is here and we’ve got a terrific opportunity in front of us: A shot at a very comfortable retirement with around $1.1 million saved. Heck, not only comfortable, but possible without withdrawing a single penny from our savings.

And depending on your circumstances, you may be able to clock out on a lot less.

I know that goes against the narrative that’s been driven into our heads for pretty much our entire lives as investors: That we need to work well into our sixties (and maybe beyond) before breaking free of our commitment to work. But from time to time, we do hear about a few people who prove this isn’t necessary for everyone.… Read more

The Dogs of the Dow 2025 pay big dividends—up to 6.8%! Collectively they yield three-times what the broader market pays. We’ll discuss individual Dogs—and their divvies—in a moment. First, the simple three-step strategy:

• Step 1: After the final trading day of the year, identify the 10 highest-yielding stocks in the Dow.
• Step 2: Buy all 10 stocks in equal amounts and hold them for a year.
• Step 3: At the end of the year, sell, then rinse and repeat.

Why has this strategy worked in the past? Dividends are an indicator of value.

Especially for big blue-chips like Dow stocks.… Read more

For a long time now, it seems like the stock market has had a “theme of the year.” Clearly in 2024 it was AI, while 2023 was the year of recovery from 2022, which was a year of panic over a recession that never came.

This is odd, as past trends have lasted several years. From 2012 to 2014, for example, it was momentum driven by the Fed’s quantitative easing after the financial crisis. And the dot-com-bubble years spanned more or less from 1994 to 2000.

So will 2025 be another “theme year,” or will we see markets shift back to embracing longer-term trends?… Read more

Let’s make this the year we run our income portfolios like a business. And project every dividend payment we are going to collect—easily and accurately.

We built a killer app here at Contrarian Outlook for this very purpose. It’s called Income Calendar and we continue to improve the tool each and every month based on feedback from dividend investors like you.

Since our goal is to retire on dividends, it is important to know exactly how much passive payout income we have coming in for 2025. This is where Income Calendar comes in. I can load a portfolio of 22 stocks and the tool will actually tell us our projected 12-month income down to the penny:

Income Calendar Projects Dividends Down to the Penny

The portfolio above reflects our current Contrarian Income Report lineup of 22 big payers.… Read more

2024 is hours from heading out the door, and here’s the state of play:

The Federal Reserve cut interest rates for a third consecutive meeting on December 18. Yet the yield on the 10-year Treasury is now higher than when the easing cycle began.

Wait. What?

The bond market has been screaming at Jay Powell that the job on inflation is not done. It makes sense: The economy is fine. There are plenty of jobs. The market is not hurting for liquidity.

Finally, Jay is catching on. And here’s the twist: The hawkish guidance he gave on rates at that December 18 meeting—including the Fed’s expectation of two rate cuts next year instead of four—could actually set the stage for a top in the 10-year Treasury yield.… Read more

Need more dividend yield in 2025? Consider real estate investment trusts (REITs), which were literally mandated to be dividend-paying machines. Income is the point—by law.

Select REITs even yield 10% or more. What a payout! We’ll discuss seven of them—and their prospects for 2025—in a moment.

Now we can’t just blindly pick any ol’ a REIT. The real estate sector—using the Real Estate Select Sector SPDR (XLRE) as a proxy—only pays 3% right now.

But the average yield among this REIT 7-pack is 12.4%. That’s 4x what the sector pays!

That level of income would easily allow us to retire on dividends alone.… Read more

The other day, we broke down how return of capital (ROC) can be both good and bad for investors in 8%+ yielding closed-end funds (CEFs). But in the case of high-quality CEFs, ROC is, contrary to what most people think, a good thing.

Today we’re going to look at some real-world examples to explain how, in fact, return of capital can make up a large share of a fund’s returns.

To do so, we’re going to go into five Nuveen funds, the Nuveen S&P 500 Buy-Write Income Fund (BXMX), Nuveen Dow 30 Dynamic Overwrite Fund (DIAX), Nuveen S&P 500 Dynamic Overwrite Fund (SPXX), Nuveen NASDAQ 100 Dynamic Overwrite Fund (QQQX) and Nuveen Core Equity Alpha Fund (JCE).… Read more

The thing most people love about closed-end funds (CEFs) is, well, pretty straightforward: the dividends! With these income plays kicking out average yields of 8.7%, they really can go a long way to helping us secure a safe retirement.

Beyond that, though, there are many other reasons why CEFs should be in your portfolio. Access to a collection of high-quality assets, for example, since CEFs are well-regulated and hold a wide range of assets, including stocks, bonds and real estate investment trusts (REITs).

Still, with yields that high, it’s fair to wonder if CEFs’ payouts might not be sustainable over the long haul, especially since S&P 500 index funds yield just 1.3%.… Read more

Merry Christmas, my fellow contrarian! Did Santa bring you a tax-advantaged dividend this morning?

The municipal bonds funding the Las Vegas Valley Nevada Water District would have made a great stocking stuffer. They yield 5% and get a tax hall pass from Uncle Sam. Which means on a tax equivalent basis they actually pay 6% or 7% or more, depending on your income tax bracket.

Vegas is booming. And the town is in the middle of a hot desert that is increasingly arid, so this muni is rock solid.

Five percent, tax free. Why’d you forget this, Santa?

Well fear not, my fellow “naughty lister.”… Read more