You just can’t argue with the power of index investing, right?

After all, index funds boast ultra-low fees and simply track the market. And since stocks return about 7% per year on average, you should do well in the long run. Vanguard, founded back in 1975 on this very idea, built a massive firm (current assets under management: $7.2 trillion) on it.

And to be honest, for many folks, index funds do work. The company’s Vanguard S&P 500 ETF (VOO) is a go-to in the space, along with rival Select Sector SPDRs’ SPDR S&P 500 ETF Trust (SPY). (Though I always prefer VOO due to its lower fees; when you’re simply tracking the index, fees matter a lot.)… Read more

“We remain on track to deliver on our best in class 12% to 15% annual distribution per unit growth expectations…”

Translation: We’re going to hike our dividend by 12% to 15% per year.

Kirk, you have my full attention. Please continue.

“Through at least 2026…”

Kirk, we’re talking three more years of 12% to 15% dividend growth?! We’re in.

Our man is the chief financial officer (CFO) of NextEra Energy (NEE). NEE is the largest developer of renewable energy in North America. It’s one of the fastest dividend growers in the utility space.

NEE is one of those great dividend stocks that is rarely cheap because everyone knows it’s awesome.… Read more

Interest rates are topping out—and it’s finally time for us contrarians to get greedy. We’ll start with a group of funds throwing off double-digit yields and trading at big discounts.

In fact, I’ll hand you a ticker that’s throwing off a 10% dividend—paid monthly—shortly. We’re buying bonds again today because interest rates are topping. And when rates fall, bond prices rise. It really is that simple.

To see what I’m getting at, think back to last fall. Stocks and bonds were both hammered, putting a big dent in the idea that the vaunted 60/40 portfolio—a long-touted retirement mix of 60% stocks and 40% bonds—was safe.… Read more

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

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

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

The Wall Street Journal Reports:

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

IT’S A BANKING CRISIS. DON’T BUY DIVIDEND ETFs AT ALL!

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

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

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

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