With the press bleating about the yield curve inverting (again!) and scaring everyone with recession talk, we dividend (and particularly closed-end fund!) investors need to talk strategy.

I’ll drop a ticker that’s perfectly suited for these weird times in a second. First, let’s dive into what the inverted yield curve is—because it actually sets up a nice buying opportunity for us.

The “yield” in “yield curve” refers to the yields on the 10-year and 2-year Treasury notes. In normal times, the 10-year yields more than the 2-year, but in recent days, that gap has shrunk to nearly nothing:

2-Year Yield Reels in the 10-Year: Recession Ahead?… Read more

“C’mon daddy.”

Pause. And a sigh.

“I’ll pay you back?”

Ah, there it was. The fiscal responsibility we’ve been working to instill in our seven-year-old clicking in. An acknowledgement that money does not grow on trees.

(Everyone knows that greenbacks only grow on the Federal Reserve’s balance sheet!)

My daughter’s intentions were sweet. She had successfully lobbied to reroute the “daddy bus” to a boutique retail store. The young boss had her eyes on a toy, and offered to buy one for her sister, too.

Well, I should clarify. Initially she offered me the opportunity to purchase both. Your income strategist offered a compromise:

“How about you pay for your own.… Read more

If this mess of a market has taught us anything (and it’s fair to say it’s taught us many things!), it’s the value of dividend reinvestment plans (DRIPs).

DRIPs are always a popular topic here at Contrarian Outlook—they’re a smart “set it and forget it” way for us to plow the payouts we don’t need back into our favorite dividend-paying stocks.

Markets Crackups Make DRIPs Profitable

At their core, DRIPs essentially take dollar-cost averaging (which you likely used to build your portfolio) and apply it to our dividends. By reinvesting a fixed amount of dividend cash at specific times (i.e.,… Read more

If you’re like most investors I hear from these days, you’re suffering from a serious case of market vertigo.

On the one hand, stocks have posted strong gains over the last couple of years: with an annualized average return of over 19% since the start of 2020, the main US indices are up over double their long-term average of 7.5%.

Stocks Soar—Even With the Early 2022 Dive

But of course, the last two months have been stomach-churning, and more pullbacks are likely: the Fed has made no bones about the fact that it plans to raise rates quickly. And while the US economy recently cracked $24 trillion in annual GDP, an impressive 10.5% jump from before the pandemic, that’s still short of the 19% rise in stocks in that time.… Read more

Sir John Templeton and his 16 rules for investment success are required reading for any serious investor. And amid the volatility lately, I’ve been thinking a lot on one of these rules in particular:

“The investor who says, ‘This time is different,’ when in fact it’s virtually a repeat of an earlier situation, has uttered among the four most costly words in the annals of investing.”

Yes, it feels like the Russian invasion of Ukraine has opened a new chapter in geopolitics. And yes, it feels like we are on the cusp of something big with inflationary pressures, the threat of higher interest rates and other disruptions.… Read more

When I talk to investors these days, I hear three main reasons why they’re feeling unsettled. All three fears are interconnected (and none of them will likely surprise you!): inflation, the Federal Reserve and the war in Ukraine.

But the funny thing is, these factors are all actually enhancing the appeal of US stocks right now, particularly if we buy them through our favorite income investments: high-yielding (and often monthly paying) closed-end funds (CEFs).

Let’s take a closer look at each of these fears now, then talk about a CEF that’s well suited to the unsettled investor mood these days. It yields 7%, trades at a particularly attractive 6% discount to net asset value (NAV) and boasts a unique strategy that tones down its volatility and strengthens its dividend, too.… Read more

I’m an investor in Invesco QQQ, a fund that gives me access to Nasdaq-100 innovations like volumetric video technology.

• Invesco TV ad for its Nasdaq-100 ETF 

My fellow hoops fans watching March Madness are seeing a million commercials for Invesco QQQ Trust (QQQ). They feature flashy camera angles with average investors “dropping knowledge” about the tech stocks they are proud to own via this ETF.

In the spot, the investor humble brags about her “volumetric” video technology investment. English translation: The use of many cameras at different angles to make a sporting event look three dimensional on TV. (Last week, ESPN broadcast a professional basketball game for the first time using this technology.)… Read more

Here are eleven highly rated charities that benefit Ukrainians. Our extra dividend dollars can go a long way towards helping the millions of people who are suffering as a result of the Russian invasion.

All eleven nonprofits have a four-star rating from CharityNavigator.org, an independent service that rates charities for their financial efficiency and their transparency.

From there, I (Brett) cherry picked the very top candidates based on their individual Financial and Accountability & Transparency rating from CN. I have donated to each of these charities myself. Here they are in alphabetical order.

• A Chance in Life is preparing to help the 900,000 Ukrainian refugees (mostly women and children) that are expected to flee to Italy.

Friday morning, I mentioned to my wife that it was time for us to log into her 401(k) and move it back into stocks.

“Funny,” she said. “On NPR they just mentioned that money managers are moving into cash.”

If that isn’t a contrarian confirmation that a short-term low may be in, I don’t know what is!

Aside from the scaredy cats running money, there is also a misinformation campaign floating around about closed-end funds (CEFs). Since these vehicles are a favorite source of 7%+ dividends for us, we’re going to bust apart these lame claims today.

Then we’re going to roll into two CEFs that are savvy buys now, as Jay Powell starts cleaning up the inflationary mess he made by leaving the switch on his money printer stuck in “high.”… Read more

A contrarian indicator just flashed, and it’s telling us that now is the time to buy one of my favorite high-yield investments: closed-end funds (CEFs). Today we’re going to look at three yielding an outsized 11.6%.

Yield hunters that we are, we know the power of such a payout: with a $520,000 investment, we can kickstart a $60,000-a-year income stream. That’s a cool $5,000 averaged out on a monthly basis. And the three funds we’re going to cover in a moment give us the safety of diversification, going well beyond stocks to give us access to bonds, gold (a decent inflation hedge on its own) and real estate (ditto!).… Read more