Dividend growth stocks deserve a place in your portfolio, no matter how modest the allocation, simply because they often return 100% to 200% or better relatively quickly as their payouts rise.

You’ve probably noticed you rarely see your favorite stock paying more than 2% or 3%, even if the company raises its dividend every year. That’s because its price gets bid up as its payout rises – so you never quite get the bargain 4% yield you’re always waiting for, unless something really bad happens (like 2008).

Take industrial firm 3M (MMM), which boosted its dividend by 141% over the past decade for 170% total returns:

3M’s Dividend Growth Drives 170% Returns

Yet aside from the financial crisis, you never had a chance to buy the stock at a yield above 3%.… Read more

The REIT market has been on a tear in 2016. From the start of the year to October 1, the SPDR Dow Jones REIT ETF (RWR) gained over 6% while heavy-hitters like the Realty Income Trust (O) and Digital Realty Trust (DLR) rose more than 28%.

Now we’re in the midst of a REIT correction, and it’s hitting the best-performing REITs the most. That’s to be expected—after so many months of relentless strength, these names need to come back to Earth. And now it’s happening – just look at this chart:

What Comes Up Must Come Down—But How Far Down?

After months of massively outperforming the market, both O and DLR are now falling fast.… Read more

Looking for consistent, double-digit dividend hikes?

Bad news: your job is getting harder.

According to S&P Dow Jones Indices, US companies collectively increased their dividends by $6.0 billion in the third quarter (net of cancellations).

Sounds great, right? Too bad that number has plunged from the $7.3 billion in hikes announced in the second quarter—not to mention the $10.0 billion of increases rolled out in the third quarter of 2015.

The bottom line? Dividend growth is slowing—and faster than most investors think.

Worse, your odds of getting whacked by a surprise dividend cut are on the rise: the number of companies slashing their payouts hit 667 in the 12 months ended September 30, up 55.5% from the previous 12-month period.… Read more

Most financial advisor hacks are dead wrong. You CAN comfortably retire on a modest $500,000 investment portfolio.

Of course you’ve heard the warnings that retirement is getting harder – and they’re true. With U.S. Treasuries paying paltry returns, it is harder to find a risk-free income stream for your golden years.

But there are low-risk “bond proxies” that can offer over $50,000 in dividends per year on an initial investment of $500,000. All you have to do is buy now and sit tight. The secret is a superstar dividend growth portfolio that follows a few simple principles.

First, we don’t want to overpay – so we’re only going to choose stocks with P/E ratios below 25 (and most of these stocks actually have a P/E ratio below 20).… Read more

Closed-end funds (CEFs) are finally starting to get their due attention as the yield machines they are. Some can still be purchased at a steep discount to their net asset values (NAVs) – which means you can buy the underlying assets for $0.90 on the dollar, or less.

Last week we discussed how to select the safest 7% yields in the field. In a 2% dividend world, many of these funds look great paying more than triple that.

But you’ll need to choose your CEFs carefully. A steep discount is a great start, but many funds simply grind sideways (including dividends) because they have no means to close that discount window.… Read more

What the heck are you supposed to do with your retirement portfolio between now and the November 8 election? Cash it out and put the greenbacks under your mattress?

If that’s what you’re thinking, you may be having flashbacks to 2012, when volatility spiked in the month leading up to voting day, as shown by rise in the CBOE S&P 500 Volatility Index (VIX), the so-called “fear indicator”:

And of course, 2008 is still seared into everyone’s mind, when the financial crisis was mauling the economy and stocks as Barack Obama and John McCain squared off.

Here’s the good news: if your timeline is long, you have little to fear from the occupant of the White House, even in an unprecedented election like this one.… Read more

Is it too late to buy REITs (real estate investment trusts)? It depends. Some lesser-known issues are still great bargains, while others have rallied to nosebleed valuations.

I’ll highlight three specific buys – and tell you what you should sell – in a moment. First, let me show you why investors are hesitant about REITs:

How Hot is Too Hot?

These are the price-only returns (not including dividends) of four REITs. Three of them are quite popular, while one—Government Properties Trust (GOV)—is extremely controversial. Note the controversial one is up 49% year-to-date!

That’s amazing, but the usual stability of popular dividend payers like Realty Income Corporation (O) and National Retail Properties (NNN) means they should not be up 30% in less than a year.… Read more

If you feel trapped grinding out dividend income at 3% or so, listen up. The Fed’s latest “no hike” call has provided big 7% to 9% yields with the “all clear” signal for another year or two, at least.

In a world where a million bucks worth of dividend aristocrats will only net you about $29,000 annually, you’re probably looking for higher yielding options. Some closed-end funds (CEFs) paying up to 9% can be good candidates – if you choose wisely.

You’re probably familiar with their mutual “cousins”. Closed-ends are a bit different. While mutual funds tend to buy individual stocks and mirror the market, CEF managers tend to have wider mandates and longer leashes.… Read more

Energy is a dangerous sector. With declining profits and even dividend cuts hitting some companies, it’s becoming harder and harder to invest in energy and for a reliable income stream.

But this doesn’t mean we need to avoid energy altogether—we just need to choose our stocks carefully.

I don’t see oil climbing much above its current price anytime soon, considering the major output from America-based firms and plans in Iraq and Norway to increase output. But OPEC is also looking to control pricing by limiting output, so we may see a supply/demand standoff that will keep the commodity range bound. In fact, oil has been range bound for quite a while already:

Temporary Dips and Peaks

Although WTI crude oil futures dipped to below $30 per barrel earlier this year and climbed over $50 last summer, those volatile prices didn’t last more than a couple months.… Read more