The retirement-income battle never ends! Last summer, we watched cautiously for the next dividend cut. This summer, we’re tracking inflation.

No matter the worry, we can apply my “2-step retirement income plan.” It’s designed to keep inflation, another virus wave or pretty well any other calamity from impacting our dividend streams.

Inflation Sideswipes Retirees

First, though, we can “thank” Jay Powell and his runaway money printer for our sleepless nights. You can’t tell me that goosing the money supply by 30% in a little more than a year doesn’t have something to do with rising prices:

Powell Drains Retirees’ Buying Power

And retirees—the folks with the least amount of wiggle room in their monthly income—are taking the brunt.… Read more

Imagine getting $100 per month in passive income for every $10,000 you invest. That amounts to a $35,000 annual dividend stream with less than $300,000 saved.

It’s not impossible. In fact, investors do it all the time with my favorite high-yield investments—closed-end funds (CEFs). While the average yield on CEFs is currently 6.2%, a third of these funds yield upwards of 7%, and 17 boast payouts of 10% and higher.

Source: CEF Insider

CEFs’ payouts are particularly impressive considering the SPDR S&P 500 ETF Trust (SPY), an index fund tracking the S&P 500, yields a paltry 1.3% today—the lowest yield for the stock market in 20 years.… Read more

For the past few weeks, I’ve been drawing up a roadmap of how income investors like us can fend off inflation’s impending march.

Utility stocks. Small banks. Heck, small businesses.

But they all center around one central theme you can find in just about any corner of the market: dividend growth. Show me a payout that is heading higher, and I’ll point you to a stock price that is likely to follow.

We’ve got a big summer ahead, with 48 dividend raises on the way! Here’s why these stocks are must-watches for the months ahead.

Why We All Need Bigger Dividends Over Time

It’s simple math.… Read more

Once folks get a taste of closed-end funds (CEFs), they typically rave about one thing: the dividends! Yields of 7% and up are common with CEFs, and they often come your way monthly.

We also love the fact that even though CEFs are a small corner of the market (with only about 500 or so out there), we can build a diversified portfolio with them: there are CEFs that hold US and international stocks, bonds, real estate—even private equity. You name it.

This broad range gets us around a problem most income-seekers face: being forced to stake significant sums in single stocks just to get big payouts.… Read more

Unlike the broader market, REITs (real estate investment trusts) haven’t been messing around this year. The Vanguard Real Estate ETF (VNQ) has convincingly broken out to new highs.

For us dividend stock traders, the choice between the confident VNQ and tip-toeing S&P 500 has been an easy one. With short-term time frames, it’s usually best to ride the hot trend:

Money Cycles Towards REITs

REITs are on fire—the good kind, not 2020 dumpster variety—but they still have upside thanks to last year. Many perfectly good real estate stocks were tossed into the trash. These are high-quality landlords still trading on the cheap side as that 2020 stench slowly fades from their shares.… Read more

When it comes right down to it, we dividend investors really only need three things:

• Bargain stocks with …
• High current yields and ideally …
• Monthly payouts—so we can line up our income with our bills and reinvest our dividend cash without having to wait for three long months.

I know—this list is cute, but it sounds wildly out of step with the times.

After all, the COVID rally has sliced the typical S&P 500 stock’s yield to an unlivable 1.4%. And bargain valuations? Ha! Stocks trade at a helium-powered 37-times their last 12 months of earnings right now.

And we all know that to get monthly payouts, we must look beyond the popular stocks to lesser-known plays like real estate investment trusts (REITs) and closed-end funds (CEFs).… Read more

A couple weeks ago, we talked about the “index boomerang effect,” my favorite way to grab fast double-digit price gains in closed-end funds (CEFs).

It’s a simple one-click indicator that can hand you huge price gains on a CEF you pick up today. And those gains are in addition to the huge dividends these funds pay—the typical CEF yields a life-changing 7% today, and plenty pay out even more than that (often monthly, too!).

Here’s how my strategy works: all things being equal, CEFs focusing on a certain asset class (corporate bonds, say) will perform similarly, and will likely outperform their index.… Read more

The Federal Reserve is finally beginning to admit that it’s here and, at the moment, it’s spectacular. Chairman Jay Powell is still sticking with his “it’s only transitory” story, at least for now. Mr. and Ms. Market were spooked for a moment, until they remembered that money printing flows directly into the stock market.

So, we dividend investors continue our hunt for safe, meaningful yields amidst this mania-of-sorts that has enveloped everything from tech to lumber to crypto to big tech again. We’ll discuss five safe utility dividends—paying up to 9.9%!—in a moment.

First, let’s review the agency’s acclaimed “dot plot” which showed not only that the central bank was now expecting rate hikes by 2023, but that we’d get a pair of them.… Read more

Plenty of investors will tell you that the higher an investment’s dividend yield, the greater the risk you’ll suffer a big dividend cut, especially in a market downturn.

To that I have one response: these folks have never invested in closed-end funds (CEFs)!

The portfolio of our CEF Insider service is a case in point. It yields a healthy 6.6% on average—five times more than the income-starved S&P 500 crowd gets—and the payouts on our funds have held up beautifully throughout this crisis.

Like the Eaton Vance Tax-Advantaged Global Dividend Fund (ETG), which we bought in January 2020, when it yielded a handsome 6.7%.… Read more

Let’s take advantage of this pullback! In a moment, I’m going to outline two generous CEFs (closed-end funds) that pay 6.6%.

Thanks to last week’s market action, each fund trades at a generous 9% discount to its NAV (net asset value). In other words, each CEF trades for just 91 cents on the dollar. Great deals.

Academic “quants” would buy these funds if they could. I can recall this from the time I was scribbling furiously on my “ETF Managers Group”-sponsored notepad at the Inside Fixed Income conference in San Diego, CA. (in-person to boot, how 2019!). Full “dividend geek” mode took over and I wrote faster and faster.… Read more