There’s a lot of rhetoric flying around about the debt ceiling these days, and it’s set up a very nice opportunity for us to buy a 7%-yielding closed-end fund (CEF) we always have on our watch list.

That would be the Nuveen Nasdaq 100 Dynamic Overwrite Fund (QQQX). 

A good way to think of QQQX is like a NASDAQ index fund but with higher dividends and a smart way to turn volatility into extra dividend cash. I say QQQX is like a NASDAQ index fund because its holdings mirror those of the Invesco QQQ Trust (QQQ), including all the big-cap techs we all know well:

Source: Nuveen

QQQX, like QQQ, tracks the NASDAQ 100, so it’s no surprise that you’ll see great tech firms in its portfolio.… Read more

Vanilla energy bulls stare at XLE. So basic.

Meanwhile, we “second-level” contrarians consider NRGX as a high-yield play on higher oil prices.

What’s the difference? Well, PIMCO Energy & Tactical Credit (NRGX) yields 6.1% while first-level favorite Energy Select Sector SPDR Fund (XLE) yields 4%.

So we bank 50% more dividend when we look past the popular ETF for a little-known CEF (closed-end fund).

But wait, there’s more. XLE always sells for fair value. It holds blue-chip producers like Exxon Mobil (XOM) and Chevron (CVX). Fair enough. But we’re paying $1 for a dollar in assets.

That’s OK.… Read more

This week, we’re going to pick up some rich 8%+ payouts alongside … Taylor Swift?

You read that right. Turns out the favorite singer of everyone from, well, my two daughters to the attorney general of the United States is a fan of our favorite income plays: closed-end funds (CEFs).

That news broke in the form of a tweet from billionaire investor Boaz Weinstein, head of Saba Capital Management. Weinstein apparently heard from Swift’s dad (who used to work for Merrill Lynch) that the singer does, indeed, hold CEFs.

“Having a blast watching our daughters sing every lyric tonight in Philly,” Weinstein tweeted.… Read more

When I talk to investors about closed-end funds (CEFs), I get an almost universal reaction: they simply can’t believe the outsized dividends—and upside potential—these funds boast are for real.

I’ll admit, if you’re not familiar with CEFs, their many benefits do sound a bit over the top: a pocket of funds that yield 7.5% on average, yet hold investments we’re all familiar with, such as shares of Alphabet (GOOGL) and Mastercard (MA)? 

The outsized payouts seem particularly unreal when you consider that most of these blue chips pay low (or no) dividends themselves. And that’s before we get into the fact that CEFs can hold a range of other investments beyond stocks, like corporate bonds, real estate investment trusts (REITs) and municipal bonds.… Read more

The stock market has a potential to be a hot mess this summer. Banks are failing. We’re heading towards the most telegraphed recession of all time. I could go on…

But I’ll spare you and say hey, just show us the dividends, baby!

A select group of income heroes are displaying notable “relative strength” right now. This is a fancy way of saying these stocks are going up while the market meanders sideways or lower.

Which, of course, is what we want. Contrarian favorites that will zig while the market zags (or sags!)

A few years back, I saw this quality in A.O.… Read more

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