Here’s a “DIY” Plan for 6.1% Dividends, Yearly 11% Returns

Michael Foster, Investment Strategist
Updated: June 7, 2021

If you’re on the lookout for an expert to help you build your nest egg—and bulk up your dividend stream to, say, a 6%+ yield—you have two main choices: a professional wealth manager or an investment advisory service (or a newsletter, as they’re more commonly known).

Which is for you? Let’s break down both options. Then we’ll dive into the kind of three-fund portfolio a newsletter might tip you off to, with a healthy 6.1% income stream and a history of double-digit yearly returns, too.

Wealth Managers Charge More, But They’re a Help in a Crisis

With active wealth management, the main concern most people have is fees.… Read more

Dividends up to 10.7% in America’s Small Business Recovery

Brett Owens, Chief Investment Strategist
Updated: June 4, 2021

Business development companies (BDCs) are big dividend paying companies that tend to thrive as rates rise. Today, we’ll discuss three inflation-powered payouts up to 10.7%.

BDCs extend loans to small businesses and often their loans have a “floating rate” component included. So, the BDC tends to make more money as long-term rates rise.

A quick background on BDCs. Since traditional banks have backed off on lending over the years, BDCs have stepped in. They provided much-needed debt, equity and other financial solutions to small businesses.

Congress whipped up business development companies with a few pen strokes in 1980, creating a structure that’s incentivized to provide smaller companies with financing.… Read more

These 2 Unusual CEF Moves Can Boost (or Slash!) Your Profits

Michael Foster, Investment Strategist
Updated: June 3, 2021

There’s an obvious reason why we love closed-end funds (CEFs): the dividends!

CEFs’ payouts average around 7% as I write this, and there are plenty paying well into the double digits. One fund we’ll touch on below, for example, yields more than 16%. A payout like that gets you $2,000 a month in dividends on just $150,000 invested.

But, as we often discuss in my CEF Insider service, when picking CEFs, we always need to look past those big yields.

We also need to examine the discount to net asset value (NAV, or the value of the fund’s portfolio) because buying a CEF at an unusually wide discount can net us strong price upside as that discount bounces back to normal, pulling the price up with it.… Read more

These “Fed-Fueled” Dividends Whip Inflation, TIPS

Brett Owens, Chief Investment Strategist
Updated: June 2, 2021

Are the best things in life actually free? It depends how we handle the hidden costs.

Free coffee is good. At home, I drink one mega-cup per day. At fixed income conferences, I typically scale that “complimentary” consumption up to double-digits per day. (Hey, they’re just hotel cups.)

Free breakfast is usually better than just free caffeine. And open bar, of course, reigns supreme for your income strategist.

No doubt these freebies are baked into ticket costs, but I will gladly accept the bacon and beer challenge to get my money’s worth.

When readers write in to ask my thoughts on “risk free” yields on certain bonds, it’s time for us to talk.… Read more

A Stunning “Rinse and Repeat” Play for 40%+ Returns (Again and Again)

Brett Owens, Chief Investment Strategist
Updated: June 1, 2021

With stocks grinding along near all-time highs, decent discounts (and decent dividend yields!) are thin on the ground. But if we look close enough, they are there.

The answer to this no-yield problem is simply going one step beyond the blue chips everyone buys. Our big dividends (at discounts) are lying there in a corner of the market that few serious investors pay attention to. That’s too bad for them, but great for contrarians like us.

I’m talking about closed-end funds (CEFs), which, as a group, yield around 7% on average as I write this.

And here’s the truly underappreciated thing about these high-paying funds: many of them own the big names of the S&P 500 anyway!… Read more

What the AT&T Dividend Cut Really Means (and 3 Huge Dividends to Buy Instead)

Michael Foster, Investment Strategist
Updated: May 31, 2021

The once unthinkable has happened: AT&T (T), a Dividend Aristocrat that increased payouts for 30 years, said it will cut its payout nearly in half.

The move is especially infuriating because, as recently as April, we were hearing a lot about why the company would likely hike its payout in 2021, and management had stood by the dividend.

That’s now out the window—and the market’s not happy.

Dividend Cut Sends AT&T on a Wild Ride

It just goes to show you that even companies among the vaunted Dividend Aristocrats fall from grace from time to time. We all remember back in 2017, when another sacred cow, General Electric (GE), slashed its payout in half, as well.… Read more

Make 5% to 9% Annually in the Oil Patch

Brett Owens, Chief Investment Strategist
Updated: May 28, 2021

Energy prices have rallied furiously, but they likely have further to go. Oil and gas prices last peaked around 2014 and sunk slowly until the black goo hit negative prices in the spring of last year.

A six-year bear market takes more than 13 months to unwind. Which is why energy dividend stocks remain quite attractive.

Oil and gas stocks are 4% yielding on average, which is nearly a full percentage point more than we can get out of real estate investment trusts (REITs) at the moment. And as I’ll show you in a moment, we can squeeze yields of between 5.0% and 9.2% from “Texas tea” if we know just where to look.… Read more

This New Fund Could Upend the CEF World. Here’s What You Need to Know

Michael Foster, Investment Strategist
Updated: May 27, 2021

There’s a new closed-end fund (CEF) on the market, and it comes from one of the biggest CEF issuers in the space: BlackRock.

It’s big—with $4.5 billion in assets under management. You can tell that straight from the ticker symbol: BIGZ. The fund’s full name: the BlackRock Innovation and Growth Trust (BIGZ).

So we know it’s got heft—and it’s got BlackRock’s deep bench of talent behind it (remember that BlackRock is the world’s biggest investment firm, with $7 trillion under management). But does BIGZ have a place in your portfolio? That’s the question we’re going to tackle today.

BIGZ got its start in March, and it’s currently trading flat from its inception and trailing the tech-heavy NASDAQ, which is the best benchmark for the tech-heavy BIGZ.… Read more

Contrarian Alert: Investor Discomfort Means Dividend Deals

Brett Owens, Chief Investment Strategist
Updated: May 26, 2021

No doubt, there is a lot to be worried about right now in the financial world. Fortunately, there is finally a lot of worrying happening.

We contrarians welcome unease. Broader discomfort means dividend deals.

Investor sentiment is at last falling back to earth after months in the clouds. Sometimes these emotional drops are drawn out. Or the breakup can be short and swift.

Last September and October, too-cheery bulls got splashed with cold water. Their wake-up call, fittingly, came just weeks after we chatted about their “over the top” sentiment. We specifically discussed the likelihood of a 10% pullback given the extreme levels of investor cheer.… Read more

How a Simple Indicator Led Us to a Fast 102% Return (It’s Happening Again)

Brett Owens, Chief Investment Strategist
Updated: May 25, 2021

“I have no clue what to do,” said a friend recently over backyard beers. “On the one hand, stocks are still rising. On the other, everything is pricey.”

I know you’re feeling my buddy’s pain—I get similar sentiments from readers of my Contrarian Income Report service all the time.

The last few weeks of wild swings sure don’t help. No doubt your finger has hovered over the buy button but you’ve hesitated, worrying you’re getting in at the top.

That’s understandable: no one wants to be the last buyer in a bull market!

Let the Market’s “Fear Indicator” Guide You to Big Gains (and Dividends)

The solution to this dilemma is a strategy only a contrarian could love—we’re going to navigate by the VIX—the market’s so-called “fear indicator.”… Read more