Few folks know it,  but there’s a comically ignored indicator that regularly hands out safe 8%+ dividends—plus payouts that surge double-digits.

I’m talking about insider buying.

When it comes to the buys and sells of the folks in corporate C-suites, Peter Lynch said it best: “Insiders may sell their shares for any number of reasons, but they buy them for only one: the think the price will rise.”

Far be it for me to “edit” Lynch, but I’d add one more thing: these ballers also think the dividend is safe.

Think about it for a second: dividend safety is priority No.… Read more

Don’t listen to the bubble worrywarts: even with the 2023 bounce, stocks are well off their late 2021 peak. In other words, they’re still cheap!

Stock Rebound Still Has Room to Run

We can get in even cheaper through discounted closed-end funds. Consider two leading equity CEFs, the Liberty All-Star Growth Fund (ASG) and the Eaton Vance Tax-Managed Diversified Equity Fund (ETY), which yield 7.8% and 8.2%, respectively.

Both deal in blue chips like Visa (V), Amazon.com (AMZN) and Microsoft (MSFT). ASG also adds some lesser-known midcaps for extra growth (hence the “growth” in the name), such as property manager FirstService Corp.… Read more

Is there still a chance to buy the bank dip? You bet—with nifty yields up to 9.4%!

We’re going to avoid the regional lenders, which pains me to say because I love banking with the small guys. But I’m not looking to own them as the economy slows down.

No, nothing personal, but I’ll take the banking behemoths. None of them yield 9.4%, of course, but we engineer these payouts easily via their preferred dividends.

Preferred stocks are often referred to as stock-bond “hybrids” given that they share some characteristics of each asset. A quick breakdown:

• They represent ownership in a company (like a stock)
• They typically don’t offer voting rights (like a bond)
• They pay dividends (like a stock)
• Their dividends are typically fixed at a certain level (like a bond)
• They can rise and decline based on the performance of the underlying company (like a stock)
• But they tend to be much more stable, trading around a “par value” like a bond)

Most noteworthy, for income fanatics like you and I, is that their dividends are plump.… Read more

Does the name William Bengen ring a bell? If not, don’t worry. Many people haven’t heard of him. But he’s likely to have a major influence on your financial situation (if he hasn’t already).

Bengen is the (now retired) financial advisor who came up with the so-called “4% rule,” which is seductive due to its simplicity: it says you can safely withdraw up to 4% of your assets in retirement without having to worry about running out of money.

Obviously, such a vague rule has critics, with most of them suggesting 4% is too lenient. Most of these folks are financial advisors who take fees to manage people’s money, so they definitely have an incentive to keep their clients working and investing!… Read more

You and I, my fellow contrarian, are old enough to remember when “I bonds”—US savings bonds designed to protect you from inflation—yielded 9.62%.

It was May 2022. Just 14 months ago!

Ah, the good ol’ days. Since then, Series I savings bond rates have tumbled to 4.3%.

Many readers wrote in with I bond questions earlier this year. The savings vehicles boasted a still sweet 6.89%. But they had two major limitations:

• I bonds tie up our money for a year.
• We can only invest $15,000 in them annually.

(The annual limit is $10,000 per person, plus an extra $5,000 per year if using a federal tax refund.… Read more

If I can give you just one piece of advice as we pass the midpoint of 2023, it’s this: do not trust your dividend income to ETFs!

Instead, look to the simple “payout-powered” strategy we’ll talk about in a second. As we’ll see, it generated a tidy 83% gain for readers of my Hidden Yields service in just over two years.

Now is the perfect time to put it to work again, with corporate earnings—and dividends—likely to rise next year after slumping a forecast 16% in 2023, according to a recent report from Morgan Stanley (MS). For 2024, the bank is calling for S&P profits to soar 23%, then tack on another 10% gain in 2025.… Read more

It’s no secret that stocks—especially tech stocks—have soared this year. And today I’m going to show you a contrarian dividend play I see as the perfect way to take advantage.

And before you ask, no, we’re not too late here, even though it may look like we are, in light of the NASDAQ’s 40% rise in half a year.

The key to unlocking tech-driven gains is not buying overbought darlings like Meta (META), Alphabet (GOOGL), Apple (AAPL) and Amazon.com (AMZN). Instead we’re buying through a closed-end fund (CEF) yielding an outsized 10.6% and trading at a 15.7% discount to net asset value (NAV, or the value of its underlying portfolio).… Read more

AI is popular. Emerging market bonds, needless to say, are not.

Which is perfect for us responsible contrarians striving to retire on dividends. The more neglected an asset, the better.

But what’s the catalyst for these big yields? I’m talking dividends between 6.5% and 12.1%, by the way.

That’s easy. When the buck gets banged up, these funds soar. And that is exactly what is playing out today.

The US dollar has been en fuego for the past decade. I know, it’s hard to believe given noise from the “demise of the dollar” crowd. But these guys have lost a lot of money betting against the buck.… Read more

One mistake I’ve seen investors make time and time again is leaning too heavily on the latest “investment product” their bank is pitching them.

The problem arises because at the heart of the banking system lies a key conflict of interest: banks make money off fees and interest charged on investments, loans, credit cards and other products, so they’re motivated to get you to use those tools more.

But that usually lies at cross-purposes with our goal as income—and more specifically closed-end fund (CEF)—investors: to retire early on a high income stream (and ideally on our dividends alone), with no need for banks’ expensive loans and debts.… Read more

I’m sure you probably know this—but it is usually a really bad idea to pay 43-times sales for a stock.

Note that I did not say earnings. I said sales. Revenues. The ol’ top line. Before everything.

Scott McNealy, the co-founder of Sun Microsystems, famously told investors it was insane to pay 10-times sales for Sun’s stock. Ten!

At 10 times revenues, to give you a 10-year payback, I have to pay you 100% of revenues for 10 straight years in dividends.

 

That assumes I can get that by my shareholders. That assumes I have zero cost of goods… that assumes I have zero expenses… that assumes I pay no taxes… assumes zero R&D.