3 “Dogs of the Dow” Paying Up to 4.3%

Brett Owens, Chief Investment Strategist
Updated: January 10, 2017

The “Dogs of the Dow” are back. And this year, the biggest dogs are not just generous yielders –  they’re cash cows with price upside to boot.

For the uninitiated, the Dogs of the Dow strategy is simply buying the 10 Dow Jones stocks with the highest yields, typically at the beginning of a given year. The basic premise is that, when it comes to blue-chip stocks, high relative yields are the best sign of value. They simply highlight firms at the weakest part of their business cycles.

Blue chip names are rarely cheap, which is why we only want to buy them when their businesses are in the tank.… Read more

5 Cheap Dividend Stocks to Grow Your Retirement Portfolio

Brett Owens, Chief Investment Strategist
Updated: January 9, 2017

By now, I bet you’re sick of “Best Stocks for 2017” articles.

That makes two of us.

So today, we’re going to take the long view, starting with a strategy you can use to steadily bulk up your nest egg—even if you’re 10 years or less out from retiring—and trigger a reliable income stream once you do.

Then I’m going to reveal 5 of my favorite dividend-growth retirement stocks to buy now.

“Wait a minute,” you’re may be thinking. “Aren’t dividend payers going to get crushed as interest rates rise?”

2 Keys to Beating Rising Rates

I have two answers to that.… Read more

Buy This 8.5% Yielder Now and Hold It Forever

Michael Foster, Investment Strategist
Updated: January 6, 2017

If you want to diversify, get high-quality dividend growth and avoid risky speculation, the SPDR S&P Dividend ETF (SDY) may seem like a no-brainer.

But buying this fund would be a big mistake.

Today I’m going to show you why … and help you avoid a couple other seemingly obvious moves that could steer you into big trouble in 2017. Further on, I’ll reveal a terrific fund to buy now and tuck away for two decades or more.

First, back to SDY, which has handily beaten the S&P 500 over the past decade:

A Long-Term Outperformer


At the same time, more dividends have been paid out, and SDY’s payout is now larger than the broader market’s:

A Strong Income Stream


So why not just buy this fund and call it a day?… Read more

5 Diversified Vanguard Funds Paying 4% or More

Brett Owens, Chief Investment Strategist
Updated: January 5, 2017

Vanguard’s offerings don’t usually attract much attention from income investors. But they should – and I’m going to analyze five of the firm’s highest yield (and low cost) offerings shortly.

Three of them are compelling portfolio conveniences, while two have lagged their competitors in disappointing un-Vanguard-like manners.

While Vanguard provides a few actively managed funds, for the most part, it sticks to basic index funds and straightforward smart-beta funds in both the equity and bond arenas. The firm doesn’t delve much into the kinds of riskier strategies that tend to result in higher yields, nor does it deal in exchange-traded notes or leveraged funds that would allow it to gin up extra income.… Read more

The Best 7%+ Dividends for 2017

Brett Owens, Chief Investment Strategist
Updated: January 4, 2017

What will 2017 hold for income investors?

Let’s sort through the current hysteria regarding interest rates, Trump and inflation. Thanks to some first-level insanity, there are once again pockets of value that pay meaningful dividends of 6%, 7% or better.

And many have some price upside to boot! Why?

Because Rate Hikes Will Probably Disappoint

This time last year, the Fed was promising four rate hikes over the next twelve months. The “smart money” crowd (via Fed Funds futures prices) was betting on two. And both parties were too aggressive as we saw just one rate hike in 2016.

Today we have Yellen & Co promising three hikes in 2017, while the futures markets say just two:

The Smart Money Bets 2 Hikes in 2017


Given their track records, I’m inclined to take the “under” on both predictions.… Read more

4 Cheap Dividend-Growth Stocks to Buy for 2017

Michael Foster, Investment Strategist
Updated: January 3, 2017

2016 is in the books, and the S&P 500 gained over 11% on the year. That’s great news if you’re already in the stock market … but it’s bad news if you’re looking to buy.

The market’s price-to-earnings (P/E) ratio is now 26.1, which is 17.6% higher than it was at the beginning of the year. In other words, if you buy stocks now, you’re paying nearly a fifth more for those companies’ earnings than you would have nearly 12 months ago.

Stocks Getting Expensive


Making matters worse is the fact that the S&P 500 has soared over 8% in the last two months alone—accounting for much of the year’s total gains.… Read more

These 3 Dividends Could Get Slashed in 2017

Brett Owens, Chief Investment Strategist
Updated: January 2, 2017

The S&P 500 is near record highs. The pundits see an elderly bull market with more room to run. The Federal Reserve says it will likely hike interest rates multiple times in the next 12 months.

Sound familiar? It should. Because it’s exactly what we were as 2016 dawned.

Here’s what happened in the following six weeks:


I know what you’re thinking: Yes, but the index did go on to recoup those losses and more, with big rallies following the Brexit vote in June and Donald Trump’s surprise win last month. In the end, it wound up the year with a 10.1% rise.… Read more

How to Beat the Market and Collect an 8.5% Yield in 2017

Michael Foster, Investment Strategist
Updated: December 30, 2016

It’s been a great year for high-yield bonds. If you’ve held them during 2016, congratulations.

But if you’re like me, you’re probably wondering whether to keep holding or take your profits and invest them somewhere else.

That’s the question I’m facing with a high-yield bond fund that has gone up over 22% since my purchase.

To decide what to do, I first want to look at how the asset has performed relative to alternatives. The leading index for this asset class (the Bank of America Merrill Lynch US High Yield B Total Return Index) has risen 17% in 2016:


High-Yield Bond Index Soars

Meanwhile, the S&P 500 has gone up 13% in the same period, including dividends:


Stocks Doing Well, Too

Of course, no one will be crying themselves to sleep at night for getting “only” 13%, but it is less than high-yield bonds paid out.… Read more

3 Emerging Market Funds Paying 6.4%, With 30% Upside

Brett Owens, Chief Investment Strategist
Updated: December 29, 2016

When you think of emerging markets, what comes to mind? Growth opportunities are likely first on the list … followed ever so closely by stomach-churning volatility.

What you probably don’t think about is income. But even in EMs, investors can dredge up some considerable dividend yield.

We all know the basic emerging market investment thesis: These “emerging” countries typically feature much more robust economic growth and quickly expanding middle classes. As a result, the companies there are expected to rapidly grow as they both feed off that greater economic pie, and as their operations become international in nature, building revenues around the rest of the world.… Read more

Why Rising Interest Rates Won’t Kill Stocks (and What to Buy Now)

Michael Foster, Investment Strategist
Updated: December 29, 2016

I’m sick of hearing people worry about the Federal Reserve raising interest rates.

The mainstream media and the market go into panic mode when they fear rates are going up. I’m hearing more worries about a major stock correction coming in 2017. Since Janet Yellen’s interest rate hike, the market has taken a dip—and the trend is worrying:


The Rally Is Over

Investors are losing faith in the Trump rally, and many people are anticipating more declines to come. The Fed said it’s going to raise rates three times next year—and each rate hike is expected to drive more investors out of the stock market and into safer and better-yielding US Treasuries.… Read more