This Bad Dividend Decision Pays Up to 76%: Be Careful

Brett Owens, Chief Investment Strategist
Updated: January 31, 2024

Ten years ago, the city athletics director wrote:

Hi Guys,
I need to place an order for championship softball shirts. It should say West Sacramento’s Summer 2014 C/D Division Champions. Bad Decisions.

Bad Decisions was our team name, a nod to our personnel. I mean that in the most endearing way possible, of course. A lineup filled with guys light on responsibility (at the time) who enjoyed the postgame rehydration process as much as the in-game competition:

With two kids, my postgame rituals are different these days. First, a trip out can only occur after our final YMCA basketball game on Saturdays—my third and final game to coach that day.… Read more

Let’s “Convert” Our Lame ETF Dividends Into Ironclad 8%+ Payouts

Brett Owens, Chief Investment Strategist
Updated: January 30, 2024

This market bounce is strangling the payouts on everybody’s favorite ETFs. But it’s also given us a sweet setup to grab another group of funds kicking out big dividends, to the tune of 9%+ yields.

Even better, many of these funds—wallflowers to “popular-kid” ETFs—were left off the invite list for the 2023 market party. That means they’re (still) cheap today.

I know a 9% payout has a lot of appeal to most folks, with Treasury yields now down to around 4%, not too far above inflation.

And if your cash is stuck in an ETF, you’re getting a lame payout, well, almost all the time, but especially if you buy now: the SPDR S&P 500 ETF Trust (SPY)—which, as the name says, holds the entire S&P 500 index—yields a sorry 1.4% as I write this.… Read more

This $6-Trillion “Cash Stash” Will Ignite Stocks (and This 9.7% Dividend)

Michael Foster, Investment Strategist
Updated: January 29, 2024

Worried stocks are going to crash after breaking fresh all-time highs?

Well, let me allay those concerns with not one, not two, but … six trillion reasons why that fate—pushed more and more in the media these days—is far from inevitable (or even likely).

That six trillion number is the hoard parked in money-market funds: those “as-good-as-cash” options for people who don’t really want to grow their money but want to keep it “safe” and have access to it.

The 2022 sell-off and rapid rise in interest rates in 2023 caused money-market balances to soar, doubling from where they were just five years ago—a far bigger increase than the historical trend.… Read more

Should You Lock in These Monthly Dividends Up to 16.7%, Or Is It Too Late?

Brett Owens, Chief Investment Strategist
Updated: January 26, 2024

Today we’ll discuss five monthly dividends with yields between 7.3% and 16.7%. But let’s be careful—market participants are showing signs of greed right now.

Source: CNN

Monthly dividend stocks can help settle down a seasick portfolio. First, they pay every 30 days. What a concept! Their payments line up with our bills. Brilliant.

Quarterly payers aren’t as nice. Let’s look at a $500,000 portfolio split evenly among a group of five mega-cap dividend payers. This is a set of wildly popular blue chips you can find in the top 10 or top 20 holdings of just about every major large-cap fund—and despite this, they deliver a downright miserly sub-1% yield!… Read more

Forget What You Know About Dividend Investing (This Changes Everything)

Michael Foster, Investment Strategist
Updated: January 25, 2024

These days, I’m seeing something I’ve frankly never seen before in the markets: a lot of people questioning so-called investment “truths” they thought were frankly unmovable.

Most people’s natural instinct is to withdraw in times like these, but that would be a mistake in this case, especially for closed-end fund (CEF) investors, as it may result in funds that seem to always trade at a discount suddenly seeing those “eternal” sales come to a swift end.

I know that’s quite a bit to unpack, so let’s start with the skepticism that seems to be rolling through the markets today, starting with the S&P 500’s new—and long-awaited—all-time high.… Read more

Why I’d Rather Chug Whiskey Than Buy Stocks Here

Brett Owens, Chief Investment Strategist
Updated: January 24, 2024

“You want a shot?”

My single friend Roy is always looking for a whiskey partner. I winced. In a past life, I’d be in.

“I can’t,” was my excuse, grimacing and nodding at my nine-year-old daughter who accompanied me to our local watering hole for a late lunch and playoff football.

Responsibility makes us evolve. Usually, hopefully for the better. Some of the evolutions are obvious. Stay responsible while you’re parenting. Don’t buy stocks when everybody else loves them.

In my younger whiskey days, “investing” was all about action. Give me that new stock idea. The monthly pick. Be in it to win it.… Read more

Toss the Spreadsheet! Here’s How to Manage Your Dividends Like a Boss

Brett Owens, Chief Investment Strategist
Updated: January 23, 2024

Three weeks into 2024 and here’s the state of play: rates have fallen and likely headed lower. That’s going to light a fire under our favorite dividend payers.

It already has!

Think back three months, to mid-October. Back then, 10-year Treasury yields sat at just under 5%. Now they sit at 4.1%—a 19% drop! It’s been great for our dividend payers, as income-hungry folks start to look for other options.

That shift has just started, and it’s got plenty more room to run.

Consider the 8.5%-paying Cohen & Steers Infrastructure Fund (UTF), a closed-end fund (CEF) that’s a classic dividend play, holding shares of “recession-resistant” utilities like NextEra Energy (NEE) and Southern Company (SO).… Read more

12% Dividends, Monthly Payouts, Big Discounts. These 3 Funds Have ‘Em All

Michael Foster, Investment Strategist
Updated: January 22, 2024

Today we’re going to dive into three funds that, put together, could hold nothing less than the key to financial freedom.

I know that sounds like a bold claim, but it’s tough to argue when you’ve got a three-fund “mini-portfolio” that does all of the following:

  1. Pays a 12%+ yield that’s sustainable over the long term.
  2. Pays dividends monthly, making it even easier (and more convenient) for these funds to completely replace your salary.
  3. Offers a discount today, providing an opportunity for capital gains tomorrow.

Here’s how the numbers work out on this three-fund setup, consisting entirely of a special kind of fund called a closed-end fund (CEF): a 12% yield means you’re getting $100 per month for every $10,000 you invest.… Read more

Feels Like the First Time: 5 Fresh Dividends with High Targets

Brett Owens, Chief Investment Strategist
Updated: January 19, 2024

I was at the State Fair with one of my best friends from Elementary School. We were 2,000 miles from our old school stompin’ grounds. And my buddy had been, ahem, a bit overserved.

“It feels like the first time!” he belted alongside Lou Gramm, the former lead singer of Foreigner. No longer kids, we had matured. Now we were slamming beers within sud-splashing distance of the Lou Gramm Band.

We’ll channel Lou and Foreigner today as we consider five fresh dividends. They don’t happen often but, when they do, it’s a special moment. A sign of actual corporate maturity. Management saying we’re no longer kids chasing growth, we’re going to start dishing cash to shareholders.… Read more

11% Dividends for 10% Off. Inside 2024’s Biggest Buying Opportunity

Michael Foster, Investment Strategist
Updated: January 18, 2024

Don’t buy into the fear around office real estate investment trusts (REITs). Truth is, this is our moment to buy strong REIT dividends. We’re going to do it with a well-diversified 11.4%-yielding closed-end fund (CEF) trading at a ridiculous bargain.

Our opportunity lies in the fact that the fear around office landlords (Will the work-from-home crowd ever return? Will lease rates plummet? Is any of that priced in?) completely misses the point for investors.

Negativity Around Office REITs Has Been Off the Charts

To get a sense of the scale of fear around office REITs, consider that Fortune magazine, despite its staid reputation, told us nine months ago that the “office real estate apocalypse” was here and “even worse than expected.”… Read more