Retire Early With This Dividend-Paying “Compound Interest Machine”

Michael Foster, Investment Strategist
Updated: May 15, 2023

We need to talk about “financial independence” for a second. It’s one of those catch-all terms you see a lot in financial-industry marketing, for good reason: it means completely different things to different people.

Maybe your idea of financial independence is having a bit of extra income on the side, to go with a regular job you love. Or maybe you want to work only on the projects you like, without the unreasonable boss and 9-to-5 grind. Heck, maybe you want to clock out completely.

Me? I’m a big fan of picking projects I want to do—and I’ve accomplished that in my forties, thanks to the 8%+ yielding investments I want to take you on a guided tour of today: closed-end funds (CEFs).… Read more

5 Floating-Rate Funds Paying Up to 11.7% at Big Discounts

Brett Owens, Chief Investment Strategist
Updated: May 12, 2023

What’s up with floating-rate funds? Why haven’t they all, well, floated higher in price as interest rates have risen over the past couple of years?

Is there any hope that they’ll finally float?

Today we’ll discuss five such funds—underperforming yet now cheap because of it—yielding up to 11.7%. Can they live up to their billing? We contrarians want to know because they are trading at large discounts to their net asset values (NAVs).

First, a primer on floaters. Floating-rate securities such as bank loans have variable coupons (interest payments) that are recalculated regularly—often quarterly, sometimes monthly—to reflect changes in short-term interest rates.… Read more

How We’ll Play the Market’s “Fear Gauge” for 7%+ Dividends, Upside

Michael Foster, Investment Strategist
Updated: May 11, 2023

Look, we’re all contrarians here at Contrarian Outlook. It’s right in the name, after all. But even we contrarians have to pick our battles. Because sometimes what sounds like a canny contrarian move can turn out to be, well, too cute by half.

A good example is buying counter to the VIX, which you may know as the market’s “fear gauge.” It’s a common contrarian belief that when the VIX is low (as it is today) and the market is relatively calm, it’s a good time to sell. And when the VIX is high, and mainstream investors are in a panic, it’s a good time to buy.… Read more

It’s a Banking Crisis: Avoid These Dividend ETFs

Brett Owens, Chief Investment Strategist
Updated: May 10, 2023

The Wall Street Journal Reports:

Retirees Turn to Dividend ETFs for Income
Financial advisers say investors shouldn’t just go for the fund with the highest dividend yield

Gee, thanks. I have something to add, WSJ friends.


In a rising market, fine. I can hold my nose. Though, you know, even a popular ticker like Schwab US Dividend Equity ETF (SCHD) is a lazy option that’ll cost you.

SCHD owns 104 dividend stocks and PepsiCo (PEP) is its top holding. PEP pays a piddly 2.6% but its yearly dividend growth is decent—not great but not AT&T (T) awful, either.… Read more

A 2-Step Contrarian Move for 7.4% Dividends, 90% Returns

Brett Owens, Chief Investment Strategist
Updated: May 9, 2023

Let’s dive into two simple indicators that can tell us when a dividend stock is set to lurch higher. Once we’re through, I’m certain you’ll wonder why you never thought of them before.

Last time we tried them, in my Contrarian Income Report advisory, they delivered a quick 90% return (more on that below). And we’ve got another nice setup to put them to work again.

Short Selling Is Back in the News—But We Take a Different Approach

First up, short selling—a phrase that strikes fear into most dividend investors’ hearts, for a couple of (good!) reasons. The main one being that selling short (or selling a stock you’ve borrowed in hopes of buying it back later at a lower price) can expose you to infinite losses, for a simple reason: share prices can theoretically rise without limit.… Read more

This 3-Buy Portfolio Could Let You Retire Fast (With $4,375 a Month)

Michael Foster, Investment Strategist
Updated: May 8, 2023

Let’s say we want to quit working and attain financial freedom—not in decades, but in just a few years. Or heck, maybe less. How do we do it?

One “must-have” is the need to clock out on dividends alone. It’s the only way to retire without being forced to sell stocks into a downturn, shriveling our wealth and income at the same time.

To hit our “dividends-only” retirement goal, then, we’d need a minimum yield of 8% on our $500K. That way we’re assured of banking at least $40,000 in dividends a year. But with inflation still “sticky,” we’d ideally like to do better—pulling in around $50,000 or more.… Read more

5 Cheap Dividend Stocks Yielding Up To 10.3%

Brett Owens, Chief Investment Strategist
Updated: May 5, 2023

The best thing about a multi-year bear market? The bargains.

Today we’ll talk dividend deals. Big payers. Stocks yielding up to 10.3% and trading for as little as three-times free cash flow (FCF).

That’s right—3X FCF!

Profits are Fake, Cash Flow is Real

Wall Street accountants can “adjust” just about every number in a 10-Q. “Adjusted earnings.” “Adjusted EBITDA.” Heck, I’ve even seen “adjusted revenues.” But it’s next to impossible to “adjust” cash. Cash flow is, well, cash flow.

Also, cash is ultimately what pays us. Dividends aren’t paid out of sales, or even paper earnings, but out of real cash.… Read more

How We’ll “Work” the Latest Bank Fiasco for Big Dividends (and Upside)

Michael Foster, Investment Strategist
Updated: May 4, 2023

We’ve written before about the big disconnect between the rising stock market and (ridiculously!) negative media coverage we’ve seen over the last 16 months. Well, the media is at it again, this time with the whole First Republic Bank (FRC) fiasco.

And we contrarians are going to keep using overtorqued coverage as our guide to grabbing big discounts and steady dividends in closed-end funds (CEFs) and other assets.

Before we go too far, there are a couple things we need to keep in mind with this FRC mess: first, as was the case with other troubled banks, including SVB and Credit Suisse, a buyer (or the government) swooped in and managed the problem.… Read more

These 10%+ Yields are Mystery Meats – Avoid!

Brett Owens, Chief Investment Strategist
Updated: May 3, 2023

Hey kid, want some candy?

Don’t worry about the wrapper. It, um, came like that.

No? No candy for you? You’re sure?

OK fine. Maybe you’re not hungry, but how about this 31% dividend?

Don’t worry. The stock made its last dividend payment of $0.27 just fine.

No? No 31% yield for you? You’re sure?

OK fine. And, honestly, smart move. I would imagine that January dividend payment is the last one we ever see from First Republic Bank (FRC).

Fundamentally, FRC (and other banks, for this matter) are flawed, perhaps fatally so. They are not paying competitive rates.… Read more

Our “Once-in-5-Year” Shot at These 8% Dividends Is Now

Brett Owens, Chief Investment Strategist
Updated: May 2, 2023

We’ve got a once-in-5-year buy window open to us in one of the highest-yielding investments out there.

And (for once) we can thank the Fed for these cheap 8%+ payouts!

I’m talking about closed-end funds (CEFs), a corner of the market where rich 8%+ yields (and monthly payouts) are the norm.

These (too) often-ignored funds are set to spike because the last time Powell & Co. acted like they are now, CEFs’ prices soared—and they handed their lucky investors big price gains to go along with their huge dividends.

If 2023 Is 2019 Redux, CEFs Will Explode Higher

To see what I’m getting at here, think back to late 2018.… Read more