AI is in and energy is out. As usual. Which is just dandy for contrarian dividend investors like us.

Let’s talk about dividends up to 6.6% and stock prices that are dirt cheap. How cheap? Stocks trading for as little as half their sales!

The best time to buy energy is before the next supply shortage. I was just “upwind” of Hurricane Hone on the Big Island of Hawaii—‘tis the season for storms. Plus we have a volatile Middle East. And an economy that may get a bit of juice as the Federal Reserve begins to ease.

The 2020s, make no mistake, are a bullish decade for energy.… Read more

Think back just a couple weeks: The “yen carry trade” had investors running scared, and we had a terrific opportunity to buy stocks—better still our favorite income plays on stocks: closed-end funds (CEFs) yielding 8%+.

But wow, was that window brief! Stocks have more than recovered since, and are what I’d call highly valued, with a price-to-earnings ratio of around 27.5.

Let me be clear: I’m not saying stocks are overvalued: They’re likely to keep posting good returns because earnings are rising, and the economy is still dodging the recession we’ve been warned about for three years now.… Read more

How about two bold election predictions—and two payouts that will thrive regardless of the results?

My first forecast: Americans will still want to eat food after November. Inflation is a hot topic on the campaign trail, but this is not a bad time to be hungry. Grain prices—corn, soybeans and what—are as cheap as they have been in years.

As contrarian investors, this commands our attention. Farmers are planting less corn, soybeans and wheat. The acreage is going to more profitable crops. Or, nothing at all.

Remember, the cure for low prices is low prices. Cheap grain squeezes farmers, who plant less.… Read more

If you’ve been watching utility stocks over the last few months, you might think our chance to buy these big dividends is history.

It’s not: There are two still sweet utility deals on the board, offering both high dividends (up to 7%) and steadily growing payouts. Why are these bargains still available? We’ll get to that shortly.

First, let’s talk about why utilities have been at the top of our buy list this year: When interest rates fall, “utes” fly.

Most people see utilities as bond proxies, which is why they got crushed when rates spiked in ’22. Why bother with even low-volatility utilities when you can get a guaranteed near-5% payout from a 2-Year Treasury?… Read more

When I see people touting the 60/40 portfolio, I kind of feel like Haley Joel Osment’s character in the Sixth Sense. But instead of seeing dead people, I see dead ideas.

You likely know what I’m talking about: a portfolio that seeks to automatically balance risk by holding 60% in stocks and 40% in bonds.

It sounds sensible enough, but history shows that people who invest by this rule have been leaving a lot of money on the table for a long time:

60/40 Portfolio Pays Too High a Price for Low Volatility

One quick glance at US stocks, seen above in purple through the Vanguard Total Stock Market ETF (VTI), and bonds, in orange through the Vanguard Total Bond Market ETF (BND), over the last decade shows a problem.… Read more

In case you haven’t heard, the Federal Reserve is about to cut interest rates. That is big news for this trio of dividend payers, dishing between 11.1% to 12.6% per year.

These stocks survived the high-rate cycle. Are they about to thrive as the Fed eases?

Yeah, probably—so long as the Fed doesn’t also put them out of business in the process! Let me explain…

Mortgage REITs (mREITs): High Risk, Even Higher Dividends

Mortgage real estate investment trusts, colloquially known as mREITs, are a real estate niche

When we think about REITs, we typically picture equity REITs. They own (and sometimes operate) physical real estate like apartments, strip malls, hospitals, ski resorts.… Read more

With stocks again on the upswing after the August 5 pullback, the appetite for risk is back!

Rising markets are terrific, of course. But they do bring dangers. One is that they might tempt some people to abandon sound long-term investing and take a stab at more speculative approaches, like day trading.

Before we go too far into whether you can actually make a reliable return from day trading, I’d say that to be a successful day trader, you should be aiming to beat the market … and a lot of ink has been spilled about how active managers—and I’d include individual investors here—can’t do that on the regular.… Read more

Over the past two Wednesdays we have discussed 10 timely high-yield stocks and funds. Talk may be cheap, but these income streams are generous.

Let’s talk dividend details using data from Income Calendar, the dividend tracker app we developed in-house here at Contrarian Outlook.

First, the projected income from these 10 payers. A $10,000 position in each tees us up for a $5,065.22 income stream over the next 12 months. A 5.07% average yield.

(Which, by the way, is over four times what the S&P 500 pays. Four times.) 

Our 12-Month Projected Income

Source: Income Calendar

Here’s the income contribution broken down by position.… Read more

I have to laugh when I hear people say Jay Powell has been tough on rates. Sure, he’s been talking tough. But when he’s not doing his Dirty Harry act at the mic, he’s been keeping the liquidity party going through the back door!

I call this “Quiet QE.” If you’ve read my articles in the last couple of years, or are a member of one of my premium services, you’ve no doubt heard me talk about it before.

It’s one-half of the opportunity we’re looking at in corporate bonds today.

The other? The arrival of what I call “real” QE, in the form of rate cuts slated to start up in September.… Read more

Stock market predictions, of course, are just that—predictions. All of them (including mine!) should be taken with a grain of salt.

I normally prefer to avoid making them. But every now and then I partake because, well, the prediction game is fun! And we do need some kind of forecast to work from when it comes to buying stocks—and our favorite income plays: 8%+ yielding closed-end funds (CEFs).

The key, of course, is knowing when to stick to your forecasts and when to change tack. So as we move past the August 5 correction and toward the final third of 2024, it’s a good time to check in on a couple predictions I made back in January and see how they’re playing out.… Read more