Our “1980s Redux” Bond Strategy for 9.9% Dividends

Michael Foster, Investment Strategist
Updated: August 24, 2023

It’s back to the 1980s in the corporate-bond world—with yields through the roof. (I’m talking safe 9.9%+ payouts when we buy bonds through high-yielding funds like the one we’ll delve into below.)

If you were investing back then, you may recall that bond yields soared well into double-digit territory before falling back to earth:

Source: Economic Report of the President (2012), Government Printing Office

In other words, if you bought a corporate-bond fund in 1981, you’d have gotten a 14.2% return every year for the bonds’ duration, which in some cases was a decade. And you’d have gotten that return in cash.… Read more

New Trade of Decade: Favor Bonds Over Stocks

Brett Owens, Chief Investment Strategist
Updated: August 23, 2023

Three years ago, I wrote to you from the La-Z-Boy in my kids’ room. Which wasn’t unusual. We were all stuck at home staring at whatever immediate family we were sheltered in place with. It was April 3, 2020.

(Ah, 2020. Family walks were the highlight of the day. Our investment strategist—and survivalist father—took no chances when leaving the house. Here’s one from the archives that recently resurfaced on my wife’s phone…)

Six packs in a stroller? The norm. What was unusual was the content of the note I penned to you before the big walk. Favor Stocks Over Bonds was the topic, strange coming from a guy who writes about bonds for a living.… Read more

3 “Electric” Dividends Set to Soar in ’24 (They’re Cheap Now)

Brett Owens, Chief Investment Strategist
Updated: August 22, 2023

I know it’s only August, but I’m ready to make my first “dividend prediction” for 2024: utilities—especially growth utilities—will surge.

That means now is the time to dust off our parents’ playbook and grab these rock-steady payers before the mainstream crowd comes around. When they do, it’ll be goodbye NVIDIA (NVDA) and hello Consolidated Edison (ED)—one of the three stocks we’ll discuss below.

The Coming “Rate Rollover” Just Got Moved Up

We’re bullish on utilities now because this economy is bogging out. We got more proof of that last week, with China posting an anemic 0.8% growth rate in Q2.… Read more

These Safe 8% Dividends Are On Sale (Thanks, Jay!)

Michael Foster, Investment Strategist
Updated: August 21, 2023

It’s prime time to grab two bond funds tossing out 8%+ dividends now—and we have the Fed (of all things!) to thank for this opportunity.

Last year, as we all know (too well), the Fed raised interest rates at the fastest pace in history, bringing them to their highest point in nearly 20 years. As a result, many corporate bonds (represented by the red line above) are yielding a lot more than they used to.

Take, for instance, two bonds from Apple (AAPL), one issued in August 2020 (when the world looked a lot more precarious than it does today, as we still had an unresolved pandemic worldwide) and one issued in May 2023.… Read more

3 Dividend Stocks Soaring While the Market is Sinking

Brett Owens, Chief Investment Strategist
Updated: August 18, 2023

As contrarian investors, we have no desire to buy the stock market while it’s hot. We wait for it to cool off. And cooling off it is.

Three weeks ago, I warned that NVIDIA Corp (NVDA) was pricey. On cue, the stock sank 10%!

It’s since bounced, but I’m not sure the bottom is in for this bubbly darling. More tears are likely.

So what to buy instead? I’m intrigued by stocks that have the ability to soar while the broader market sinks. That’s a strategy we employed previously with semiconductor maker Texas Instruments (TXN).

Below is a chart of TXN’s performance over the last decade.… Read more

These Snubbed Funds “Convert” Paper Gains to Huge 9% Dividends

Michael Foster, Investment Strategist
Updated: August 17, 2023

I just read one of the best articles on personal finance I’ve ever seen.

The piece, titled “I Saved Too Much for Retirement: What I Wish I’d Done Instead,” by Martin Dasko and published on Yahoo Finance, warns of a very real danger: “If you save too much for retirement,” Dasko writes, “you could find yourself missing out on your best years, and even end up with a higher tax liability when you stop working.”

Of course, the article also says that it’s better to overprepare financially and warns of how difficult it is to retire on your own (“hire a professional!”… Read more

How to Get Filthy Rich with Safe Dividend Stocks

Brett Owens, Chief Investment Strategist
Updated: August 16, 2023

Please keep this between you and me. I don’t want to have to explain this again to every vanilla income investor out there.

But it’s important. And timely, thanks to the current revival in volatility.

Dividend stocks, at times like these, can do more than simply dish out income. They can make us filthy rich, too.

Yeah, I know. The promise of price gains can be “over the top” here in Dividendland. Most of us are content to grind, grind, grind. Send us our payouts and keep our portfolios intact.

If you’re a current Contrarian Income Report subscriber, you are well versed in this approach—and better than most!… Read more

This Fat Dividend Is Growing Fast (Name and Ticker Below)

Brett Owens, Chief Investment Strategist
Updated: August 15, 2023

There are plenty of stocks out there, right now, with payouts growing fast—heck, some of them give shareholders a “raise” every three months.

You won’t find these “Dividend Accelerators” among the big names of the Dow.

A number of them are real estate investment trusts (REITs)—“landlords” of everything from apartments to warehouses. And they’re not just dividend-growth machines; most throw off higher current yields than the typical S&P stock, too.

And I mean much higher: right now, the REIT benchmark Vanguard Real Estate ETF (VNQ) yields 4.5% as I write. The typical S&P 500 name? A sorry 1.5%.

You can thank the federal government for that: it gives REITs a pass on corporate taxes as long as they pay 90% of their income as dividends.… Read more

These 3 Funds Could Pay You $4,000 a Month

Michael Foster, Investment Strategist
Updated: August 14, 2023

Let’s go ahead and build ourselves an “instant” income portfolio throwing off a rich 8.8% yield. A yield like that, after all, could put a dividends-only retirement within our reach. Or at the very least help you scale back your day job and make up the difference with dividend payouts.

This, of course, is the essence of financial freedom, and my favorite high-yield assets, closed-end funds (CEFs), are our best play here. When we build our retirement with CEFs, we get to hold the top stocks, bonds and other assets, like publicly traded real estate investment trusts (REITs), out there.… Read more

This 6%-Yielding Portfolio Is Cheap. But Is It a Value?

Brett Owens, Chief Investment Strategist
Updated: August 11, 2023

Let’s talk about the cheapest dividend payers in the world. With respect to cold hard cash flow.

We contrarians are too savvy for P/E ratios. We know that earnings are accounting creations. “Profits” are all fugayzi.

Free cash flow (FCF), on the other hand, is what it is. The cash a company brings in, minus capital expenditures. This cash can be reinvested in the business or, better yet, paid out to income investors like us.

We like companies that dish dividends because their businesses are running on relative autopilot. They needn’t plow every dollar they raise back in. Which is great—more yield for us.… Read more