The Omicron variant is here—what does it mean for us dividend investors?

Simple—we’ll simply do the same thing we did the last time COVID spooked markets: buy tech-focused closed-end funds (CEFs) with huge payouts!

Members of my CEF Insider service will remember that we did just that in March 2020, at the trough of the market’s initial pandemic plunge, buying the BlackRock Science & Technology Trust II (BSTZ) when it yielded 7.3% and traded at a 6.6% discount to NAV. We then rode it to a nice 21% total return in just two months!

BSTZ Gave Us a Nice Profit in the First COVID Panic

Our first hint that tech is the right thing to buy now is came in last Friday’s chaos, in which all countries saw their markets dip, but interestingly only the tech-focused NASDAQ 100 (QQQ) fell less than 2%

That’s telling, because if governments around the world institute new shutdowns, the last sector to suffer will be tech.… Read more

A “great reset” is underway in our economy. We were reminded of that yet again last Friday, when select stocks sailed through an otherwise brutal half-holiday on Wall Street.

Financial talking heads bemoaned the losers. But who cares about these dinosaurs? We contrarians should pay attention to the winners—and their stocks—because that’s where fortunes will be made.

I’ve seen this trend unfolding firsthand. My second software company, which focused on marketing for e-commerce stores, launched a Shopify (SHOP) app in 2013. At the time, Shopify was a fledgling platform that helped retailers sell their wares online.

We were a startup ourselves, newly minted a year prior.… Read more

No matter the financial headlines, all roads will—eventually—lead to (even higher) inflation. So, we should use pullbacks and rallies alike to make sure we are inflation-protecting our retirement portfolios.

We’ll talk specific stocks and funds in a moment. First, let’s review the mechanics of money printing.

The accommodative Federal Reserve has already increased the M2 Money Supply by 38% since the start of 2020! That’s a lot of dough that has flowed into the financial markets. With the Fed continuing to stand by to support the stock and bond markets, we should look past current concerns and realize that the “solution” to any setbacks will be more easy money.… Read more

Today we’re going to dive into two closed-end funds (CEFs) that have what everyone is on the hunt for these days—massive yields! Both pay more than 8% on average and tempt us with big upside, too, as they’re far cheaper than most other CEFs.

Let’s stop there for a second and talk a bit about CEFs: they’re a small group of funds known for their high yields (averaging around 6.8% across the board currently). They’re like ETFs in that they’re diversified, with each CEF typically buying hundreds of assets within a specific investment strategy.

Unlike ETFs, though, CEFs often trade for less than the actual market value of the assets inside the fund.… Read more

What if I told you that, in a market this expensive, there are nine dividend stocks with price-to-earnings (P/E) ratios under nine?

And that this low P/E ratio paid 6.9% per year in dividends?!

If I didn’t research and write it, I wouldn’t believe it myself. But in a minute I will share the details on this 9-pack, which yields 4.2% to 19.2%.

We’re unlikely to see these hidden gems touted on mainstream financial websites. With the S&P 500 in the stratosphere, these ground-level bargains are being overlooked. But we contrarians see these dirt-cheap dividend stocks that:

1. Boast P/E ratios that average just 8.5.

Another day, another sign the first-level crowd is (wrongly!) losing its head over inflation—and yet another opportunity for us to tap those fears for big dividends!

Let’s start with the number the headline-focused crowd can’t move past: 6.2%, which is the jump consumer prices took in October 2021, compared to a year earlier.

Inflation Lurches Higher …

But something strange is going on here—the stock market doesn’t care. While we’ve been hearing about inflation pretty much all year, the S&P 500 still jumped 25% in 2021. That’s because, while the “dumb money” panicked and sold out at various points during the year, the big institutional players—or the “smart money”—stayed long, and indeed bought more.… Read more

Successful dividend investing is simple, though not necessarily easy. There are nuances which trip up many investors (including most professionals!). These twists and turns create opportunities for contrarian-minded income investors like us.

So, ready to retire on dividends? Follow these five steps and we’ll do it together. Let’s start with an obvious yet underappreciated rule for income investors.

Step 1: Count Your Dividends

Since we focus on high yield, most of our returns come from the “yield” component of stocks. For example, we added this high-paying bond fund to our portfolio 2016 and its price-only returns look quite pedestrian.… Read more

We’ve just hit the best time of the year to roll out one of our most potent dividend “hacks.” Timed just right, it’ll deliver us stout payouts yielding upwards of 5%—and growing triple-digits, too.

Best of all, we can “work” this proven dividend-growth system in just two quick steps, which we’ll dive into now. Then I’ll name three stocks you can buy today to give yourself a shot at “front running” double-digit payout hikes—and swift capital gains, too!

Step 1: Buy Just as a Dividend Hike Is Announced

We’ll start by “timing” our buys just as dividend hikes are announced. That’s a veteran move because a company’s shares almost always rise with its payouts, and there’s often a lag between the announcement of the hike and a rise in the stock.… Read more

I hate to see everyday folks grinding it out with “has-been” dividend payers like AT&T (T) when there are dozens of safe 7%+ yielders out there, many with incredible performance histories, too. 

Trouble is, most people don’t know where to look. But I’ll take you on a personal tour of this overlooked corner of the market (and reveal the ticker of one of the best of these investments, which is throwing off a 10.2% yield as I write this) today.

First, back to Ma Bell: sure, she yields a high 8.4%, but the stock is one of the biggest yield traps on the market!… Read more

“Regular” REITs typically buy physical properties, find someone to manage them, and lease them out. They collect rent checks and avoid paying taxes on most of these profits if they pay most of their earnings out as dividends (per the terms of their tax loophole, which frees them from paying taxes if they distribute 90% of their profits as payouts). This is the reason REIT stocks typically boast big yields.

Mortgage REITs (mREITs), on the other hand, don’t own buildings. They own paper. Specifically, they buy mortgage loans and collect the interest. How do they make money? By borrowing short (assuming short-term rates are lower) and lending long (if long-term rates are, as they tend to be, higher).… Read more