3 Toxic ETFs to Sell Yesterday (and 3 Picks Growing Payouts Up to 420%)

Brett Owens, Chief Investment Strategist
Updated: January 16, 2024

Look, I get it: many folks love ETFs, mainly because of the cheap management fees.

I mean who doesn’t love a deal? And it is true that ETFs’ fees are a fraction of those levied by the typical mutual fund or closed-end fund (CEF).

Trouble is, most ETF buyers get exactly what they pay for! Some of the worst performers in ETF-land are dividend-growth ETFs, which sound like a nice “1-click” way to load up your portfolio with soaring payouts.

Too bad they can’t stop tripping over their own feet!

Look at how three major dividend-growth ETFs, the iShares Core Dividend Growth ETF (DGRO), Vanguard Dividend Appreciation ETF (VIG) and ProShares S&P 500 Dividend Aristocrats ETF (NOBL), have fared in the past year:

Stocks Lap Dividend-Growth ETFs

As you can see, the S&P 500 (in orange) blew past this trio, with a 24% total return.… Read more

Big Payouts, Lousy Returns: Avoid These Funds (Yielding Up to 8.9%) in ’24

Michael Foster, Investment Strategist
Updated: January 15, 2024

Here’s the thing about high-yield closed-end funds (CEFs): sometimes a CEF will seem to have all the earmarks of a terrific investment: high (and monthly) dividends, reasonable fees and reputable management. But it’ll still come up short.

We, of course, love CEFs and see them as the critical pieces of our income portfolios. The portfolio of my CEF Insider service, for example, holds plenty of top-quality buys and yields 9% as I write this.

But when picking these funds, we need to make sure we don’t let a big name, high yield or so-called “low” fees dominate our thinking. We also need to look deeper, at factors like past performance and even management’s track record with its other funds.… Read more

As Inflation Eases, These Dividend Stocks will Soar

Brett Owens, Chief Investment Strategist
Updated: January 12, 2024

As inflation calms down, these dividend stocks are going to fire up. I’m talking about five stocks with payouts popping between 33% and 100% per year.

And these are safe, profitable businesses powered by good ol’ fashioned cash flow. I know, what a concept. These stocks should never be cheap, but they are, thanks to the recent stock market panic in September and October.

This five-pack highlights the power of a phenomenon called the “dividend magnet.” This is where payout growth pulls a stock’s price higher regardless of whatever the broader economy is doing.

Dow component UnitedHealth Group (UNH) is a perfect example of the dividend magnet.… Read more

My Outlook for Tech Stocks (and One 6.2%-Paying Fund) in 2024

Michael Foster, Investment Strategist
Updated: January 11, 2024

The first week of 2024 was a rough one for stocks—and that, oddly enough, suggests we might see a good year for stocks in 2024.

But as we’ll discuss below, recent market moves also suggest some parts of the technology sector are starting to look just a little overbought now—especially one 6.2%-yielding tech-focused closed-end fund (CEF).

I know that’s a lot to lead off with, so let’s break it down.

A week and a half before Christmas, and before last year’s Santa Claus rally, I wrote that we didn’t want a Santa Claus rally to end ’23. That’s because these year-end market bounces have historically led to the following year to be weaker for the markets.… Read more

11 Easy Rules for Dividends Up to 11% with Safe CEFs

Brett Owens, Chief Investment Strategist
Updated: January 10, 2024

If you don’t like these 8%, 9% and even 10%+ dividends, well, you’re not really an income investor.

That’s right. As I write, select closed-end funds (CEFs) yield 10.8%.

Ten. Point. Eight. Per. Cent!

We contrarians are locking in yields up to nearly 11%. When the market seas become choppy, we’ll stick to our script. Here it is, broken down in an 11-step playbook for these 8%, 9%, even 10.8% yields.

CEF Rule #1: Buy the Best 

Fixed-income behemoth DoubleLine runs some well-known big funds as well as smaller, lesser-known CEFs. There’s a raging dividend party in the ignored CEF corner of DoubleLine’s portfolio, with yields up to 10.8% via

DoubleLine Income Solutions Fund (DSL).… Read more

This Is Where We’ll Find Winning Stocks (and Surging Dividends) in ’24

Brett Owens, Chief Investment Strategist
Updated: January 9, 2024

Let’s cut to the chase on dividend investing in 2024: our strategy this year will be all about interest rates.

Sure, there are other trends out there, like AI. And yep, there’s some steak behind the sizzle.

But when it comes to grabbing fast-growing—and high-yielding—payouts at the right times, rate moves will rule the roost. That’s not much of a surprise, really, as stocks have hung on Jay Powell’s every utterance for the last couple years.

But here’s the twist: Powell won’t be the headline-grabber in ’24. Look for him to fade into the background, with the Fed likely to move rates lower, maybe by a percent or so.… Read more

Why Fund Fees Will Plunge in ’24 (and the High-Yielders That’ll Win Big)

Michael Foster, Investment Strategist
Updated: January 8, 2024

ETFs, mutual funds—and, yes, high-yielding closed-end funds (CEFs)—all have one surprising new year’s resolution this year: cutting their management fees.

But unlike my resolution to stop eating donuts and work out three times a week, this is a resolution that managers of these funds will likely keep—setting their funds up for higher returns as a result.

Why? Because their feet are being held to the fire.

Activists Push for Big Fee Cuts

Truth is, there’s a quiet shift happening in the world of fund management, with more people clamoring for lower fees on all kinds of funds, including CEFs like those we recommend in my CEF Insider service, whose portfolio yields 9.0% today.… Read more

Dogs of the Dow 2024: Cheap Dividends, But Are They Values?

Brett Owens, Chief Investment Strategist
Updated: January 5, 2024

The 2024 Dogs of the Dow are particularly homely hounds—which means we’re talking big dividends.

This year’s Dogs yield more than three-times the broader market’s paltry payout. So, should we hold our noses and buy? Let’s grab some peanut butter treats and investigate. But first, a review of the “Dogs” strategy.

The “Dogs of the Dow” strategy means buying the Dow Jones Industrial Average’s laggards. It’s a simple three-step strategy that often outperforms in the year ahead:

  • Step 1: After the final trading day of the year, identify the 10 highest-yielding stocks in the Dow.
  • Step 2: Buy all 10 stocks in equal amounts and hold them for a year.
Read more

My #1 Prediction for 2024 (and Our CEF Dividend Strategy to Profit)

Michael Foster, Investment Strategist
Updated: January 4, 2024

Today I want to go over what the economic data is telling us about the future of the financial markets in 2024.

Truth is, we are likely inching toward a recession, which means it’s time to be a bit more cautious. But at this point I only see us “backing into” a recession—and likely not till 2025, 2026 or maybe even later.

The upshot here is that when a recession does hit, we’ll want to make sure we have a steady income stream so we can keep on collecting our high payouts right through to the other side. As part of this strategy, we’re going to “lock in” the 8%+ yields (often paid monthly) available on some of our favorite closed-end funds (CEFs) while they’re still cheap.… Read more

Sell Now! 20 Dicey Dividends for 2024

Brett Owens, Chief Investment Strategist
Updated: January 3, 2024

I don’t want to be the messenger of bearish news to kick off the new year. But, as a card-carrying contrarian, I can’t help it either.

We should sell our dicey dividends now. While the market is high.

The best time to buy was October, when vanilla investors were fearful. We discussed “backing up the truck” to buy anything and everything week after week after week.

CNN’s Fear and Greed Index (FGI) had bottomed out at 16 out of 100, an Extreme Fear reading only seen during stock market panics:

1 Rally and 3 Months Ago: Extreme Fear

Meanwhile the bastion of basic financial thinking, MarketWatch.com,… Read more