Inflation is falling—but is a recession next, or will we get that vaunted “soft landing” Jay Powell keeps talking about? Wouldn’t it be great if there was a dividend-payer built for either outcome?

Just such an income play exists—it’s called a covered-call closed-end fund (CEF). They’re smart buys now because they pay big dividends: the CEF we’ll break down today—the Nuveen Dow 30 Dynamic Overwrite Fund (DIAX)—yields a healthy 7.8%.

That not only gives us a high income stream, but it also increases our safety, as we’re getting the vast majority of our return in safe dividend cash.

That’s one part of DIAX’s appeal—especially if a recession is headed our way (more on that shortly).… Read more

We contrarians, we’re not ashamed to admit, make our big money dumpster diving for discarded dividends.

When vanilla investors toss trash, it is often our treasure!

I have a hunch this is unfolding in the natural gas market. Prices literally can’t go much lower, which means that eventually they must go higher. Check out this chart—prices are down by 80% in one year!

Nat Gas is Dirt Cheap 

“Natty” prices have fallen from roughly $9 per million British thermal units (MMBtus) to a little more than $2, flattened by unseasonably warm weather and months of dogged supply surplus. Reuters reported in February that “depletion so far this heating season has been around half the seasonal average for the last 10 years.”… Read more

Let’s talk about this banking “crisis” one more time. Because even though it’s starting to fade from the headlines, it’s still giving us a terrific setup for 9% dividends and upside.

What we’re going to talk about today is the very essence of contrarian investing. I’m talking about profiting from the gap between what the media is (often breathlessly!) reporting and what regular folks on the ground actually think.

And if you’ve been to any news website lately, you could be forgiven for thinking this banking issue sounds like it could spark a mass panic and a bank run, taking down the economy with it.… Read more

As we head towards the most telegraphed recession in recent memory, US Treasuries are receiving a lot of attention. And rightfully so.

In recessions, interest rates go down. This boosts bond prices (which trade opposite rates).

But not all bonds are created equal—especially during recessions. Slowdowns tend to make the safest bonds the most attractive.

After all, it can be a slippery slope from slowdown to meltdown, so many investors prefer the safety of Treasuries. In 2008, for example, the S&P 500 sank 38% but US Treasuries rallied sharply. The iShares 20+ Year Treasury Bond ETF (TLT) delivered a 28% gain for the year:

In 2008, T-Bonds Did Great 

I don’t think we’re in for a repeat of ’08, but this “buy Treasuries before a recession” trade has worked superbly since we called it in November.… Read more

Worried the economy is teetering on the brink? I don’t blame you.

Rather than running for the hills, let’s focus on recession-resistant dividend stocks. Big payout growers. We’re talking 25% to 56% dividend growth (yes, that’s no typo).

The safest dividend is the one growing the fastest. Take UnitedHealth Group (UNH), the largest health insurance carrier in the US. Its business is beautifully recession resistant. As a result, UNH is one of the most consistent growth stocks out there. Mark it down for 10%+ gains, per year, every year.

Gains in what? Every metric that matters. UNH’s sales soared 13% year-over-year.… Read more

With yields north of 7%, closed-end funds (CEFs) should be a staple of every American’s portfolio. Especially when you consider that the vast majority of these funds pay dividends every single month.

But the truth is, CEFs remain a niche product—only folks have taken the time to try them out realize what incredible income generators they are. (This is why I started my CEF Insider service: to bust the myths around CEFs and give members a selection of diversified funds they can use to build a retirement-changing income stream.)

Why are CEFs still off most people’s radar? Mainly due to the financial press and financial advisors, both of which have preached for decades that any yield of 7%, 9%, 10% or higher is unsustainable.… Read more

We’re all about the dividends here at Contrarian Outlook. Often we take it for granted that we’re not looking to lose 17% in just a few weeks while we collect income!

BAC Reaches (and Reaches!) for a Bottom …

The share-price chart for Bank of America (BAC) may appeal to dividend dumpster divers. And heck, it may work, as BAC stands to gain as more people pull their savings from regional banks and plunk them into “too big to fail.”

Why deal with this nonsense? This is exactly why we’re fading “cardiac” price charts like BAC’s and shifting toward the smooth and steady growth of dividends:

… While We Climb the “Dividend Staircase”

That’s more like it!… Read more

Here at Contrarian Outlook, we love to get questions from readers, and I recently got one from a CEF Insider member about commercial real estate, after Bank of America (BAC) recently said the sector could be the next one to tumble.

Let’s dive into that, because this fear has been driven by the same kind of overwrought media coverage we saw with regional banks (an issue that’s been addressed, by the way, with no depositors or taxpayers losing money).

And that fiasco, you no doubt know, gave us a nice “buy the dip” opportunity on, well, pretty well everything.

The media has set up these commercial real estate worries, too, and that’s highlighting the value of an 8.1%-paying closed-end fund (CEF) holding real estate investment trusts (REITs) we’ll talk about below (not to mention the five REIT CEFs in our CEF Insider portfolio).… Read more

Looking to profit from oil-powered dividends? Look no further than this discounted payer dishing 9.6%.

Oil prices had plunged in recent months on recession fears. However, there’s still no recession. Oops. One point for the energy bulls.

Meanwhile, OPEC said enough “cheap” oil. On Sunday the cartel announced production cuts. Oil prices popped.

Will OPEC’s move prompt the Federal Reserve to raise rates even higher to cool demand for oil? I don’t think so because the Fed has a problem. It broke the banks! Higher rates could do more damage.

High oil is painful, but a banking crisis is worse.… Read more

I hate to see folks trying to time this banking mess with regular stocks like JPMorgan Chase & Co. (JPM). Especially when they can easily swap their big-bank stocks for “preferred” dividends yielding 8% and up!

That’s a far sight better than the magic trick mainstream investors are attempting, as they try to dodge into big banks like JPM at just the right moment.

JPM Looks for a Bottom

Worse, JPM only yields 3% today. And you and I both know that markets can thrash around for weeks looking for a bottom.

That’s why, instead of squinting at price charts, we’re calmly picking up some sweet “backdoor” dividends from these very same banks, but with a yield that’s 173% bigger.… Read more