These Reliable Monthly Dividend Payers Have Never Been Cheaper

Brett Owens, Chief Investment Strategist
Updated: March 20, 2020

A trio of reliable monthly dividend payers has been swept up in the pandemic panic. They could be the dirt-cheap buys that have dividend investors kicking themselves this time next year for not “backing up the truck” and buying every monthly paying share in sight.

These closed-end funds (CEFs) as a whole are far smaller than their mutual and exchange-traded brethren, and they’re about as sexy as a doorstop, so they go completely ignored by traditional financial media. But a couple dozen of these have exhibited some downright admirable performance while the rest of the market is tanking around them.

Better still?… Read more

My CEF Market Forecast, and the 10% Dividends You Should Be Watching Now

Michael Foster, Investment Strategist
Updated: March 19, 2020

To be sure, no one expected stocks to notch big double-digit losses in just two weeks, and while I don’t know when a rebound will happen (anyone who claims they do is lying), the economic numbers do carry a ray of light.

So let’s dive into them, and talk a little bit about the 18 funds in our CEF Insider portfolio, too.

Of Lizards and Dividends

First, there’s one thing we must not do at a time like this: follow our “lizard brain”: the primeval part of our thought process that tells us to flee when danger rears up, to keep our precious capital safe.… Read more

Was That the Bottom? A Sober Dividend Investing Strategy

Brett Owens, Chief Investment Strategist
Updated: March 18, 2020

Last Thursday was the sixth-worst day on record for the S&P 500 (according to information from Nasdaq Dorsey Wright). Was. It’s already down to seventh place (yikes).

On Monday, it was quickly eclipsed by the third-worst day ever for the S&P 500 on record. Even in 2008, we didn’t have a single down day as severe as either of these days.

In fact, we’ve only had selling pressure this intense happen twice in the post-World War II era. The first was the October crash in 1987, and the most recent was in the fall of 2008.

Believe it or not (and most did not at the time), both were actually buying opportunities.… Read more

This 4% “Share-Selling Death Spiral” Is the Worst Thing You Can Do Now

Brett Owens, Chief Investment Strategist
Updated: March 17, 2020

Beware of Wall Street “wisdom” now more than ever. Especially when it comes to the most commonly quoted maxim for retirement: it’s based on a rule that was never designed for times like these!

Enter the “Dividend Death Spiral”

I’m talking about the so-called “4% rule,” which says you should sell 4% of your nest egg every year in retirement.

Sounds simple, right?

Trouble is, it slashes your income stream and caps your upside in one go! It’s especially dangerous advice to follow in a downturn like the one we’re experiencing.

Let’s say, for example, you owned $200,000 worth of Johnson & Johnson (JNJ) shares, which pay $3.80… Read more

2 CEFs Custom-Built for This Crash (7.8% yields ahead)

Michael Foster, Investment Strategist
Updated: March 16, 2020

Let’s set aside the noise and talk about the one thing that matters most in a volatile market like this: earnings.

According to recent FactSet data, analysts expect negative earnings growth in the first quarter of 2020. That’s no surprise, given the battering the coronavirus is laying on some sectors of the economy.

But even so, the projected decline as I write was still reasonable: just 0.1%. Things can still change, of course, but it’s important to note that this modest decline comes after a fourth quarter in which earnings grew following three straight quarters of declines—and despite analyst expectations of a 1.7%… Read more

3 “Panic Play” Dividends Paying 4%+

Brett Owens, Chief Investment Strategist
Updated: March 13, 2020

The stock market is in a full-blown panic, which means it’s time for us contrarian income seekers to go shopping.

Few firms have been spared from the “flash-bear” we are experiencing. It may be an ominous sign for the rest of 2020, too. So, if you are worried about the rest of the year, but you still need income from your investments, let’s consider some steady payers that are typically more stable than the broader market.

After all, when the markets begin to function properly again–and they will, no matter how shaky things seem at the moment–these are the types of dividend payers that we want in our portfolio (at cheap prices, too).… Read more

Crush Your Tax Bill. Bag 4.3% Dividends (with Upside). Here’s How.

Michael Foster, Investment Strategist
Updated: March 12, 2020

Last Thursday, we took a close look at how closed-end funds (CEFs) holding municipal bonds—issued by states and cities to fund infrastructure projects—can help stabilize your portfolio in times like these.

Today we’re going to dig deeper and put some numbers behind how these CEFs can do even more, including handing you a dividend that’s double what you’d get on stocks—and these payouts are tax-free, to boot!

First, here’s what “munis” did during the selloff in the last week of February:

Muni Bonds Hold the Line—Literally

When stocks plummeted, munis were fine. And why wouldn’t they be? As senior government debts, municipal bonds have strict regulations and restrictions that make them less risky than stocks.… Read more

Let’s Run with the Smart Money: Stay Calm and 8% On

Brett Owens, Chief Investment Strategist
Updated: March 11, 2020

We named our income investing website Contrarian Outlook for times like these. When the rest of the world is selling everything, we are sorting through their hastily discarded dividend bargains.

Sales like this don’t happen every year. In fact, the last blue-light special actually began to wind down the last time I reminded readers to “keep calm and 8% on.” It was December 26, 2018, and the stock market had just plunged nearly 20%.

Fear was rampant, which meant it was time for us contrarians to be greedy. Or, at minimum, not panic.

I don’t take the responsibility of being your Chief Investment Strategist lightly.… Read more

These 7%+ Dividends Have a “Coronavirus Discount” That Won’t Last

Brett Owens, Chief Investment Strategist
Updated: March 10, 2020

I don’t know why you’d try to cobble together an income stream with miserly ETFs when, thanks to this selloff, we’ve got a huge sale on closed-end funds (CEFs) throwing off life-changing 7%+ payouts.

Why are CEFs a great deal now?

In short, the coronavirus scare has caused a “panic disconnect” between many of these funds’ share prices and the value of the assets in their portfolios, known as the net asset value, or NAV.

These discounts are a quirk that only exists with CEFs, and they make our plan simple: buy when discounts are particularly wide, then ride these markdowns higher as they evaporate—pulling the fund’s market price up with them.… Read more

3 Safe Strategies for This Market Crash (and an 8.4% Dividend to Buy Now)

Michael Foster, Investment Strategist
Updated: March 9, 2020

When the market is selling off, it’s easy to panic as big losses rack up in your account.

Here’s the thing, though: going to cash, and fully exposing yourself to inflation, is a guaranteed way to lose. It’s doubly sad to see first-level investors doing this when there’s a time-tested way to survive meltdowns, keep your income stream intact and cut your portfolio’s volatility.

It doesn’t involve panic selling. Instead, it revolves around three simple rules: diversify, be patient and keep a big income stream. Let’s walk through each of these.

  1. Diversify

The first key to surviving a meltdown is to be in several markets at once.… Read more