Nick Patterson was one smart dude. Math genius, stats wiz and perhaps the top code breaker for the British government for many years.

But even he couldn’t figure out how his new employer was minting so much money.

Patterson joined up with hedge fund manager Jim Simons and his “math dream team” in 1993. Simons was a renowned mathematician who plucked top academic talent from leading universities in setting up one of the world’s first major “quant” funds.

“Quant” is of course slang for “quantitative.” These guys developed math models and built computer programs that profited from clues delivered by price action alone.… Read more

Fact: there are still lots of big, cheap and safe dividends out there—but they’re going fast as this market floats higher.

So today we’re going to get right to it and look at four options for your portfolio now, ranked from worst to first.

“Worst to First” Income Play No. 4: 10-Year Treasuries

The 10-year Treasury offers a “safety feature” mainstream investors love: no matter what happens, you’ll get your principal back after 10 years.

That’s actually a trap, though, because inflation gnaws at your nest egg the whole time, and your yield—1.6% today—won’t help you: it’s 40% below the rate of inflation, which jumped 2.6% year over year in March!… Read more

In investing, it pays to follow the old adage from Warren Buffett: never put your money in anything you don’t understand—especially if no one can explain it.

We’ve seen the consequences of ignoring that advice play out with a mutual fund called the Infinity Q Diversified Alpha Fund (IQDAX). If you’re not familiar with the story, IQDAX investors were sideswiped when an independent analysis of the fund showed it had lost $500 million.

Losses are part of the game in investing, of course, and the fact that the fund was worth $1.7 billion means it won’t go to zero because of this situation.… Read more

Dividend growth is back. And we have a great opportunity to “front run” 26 upcoming dividend increases.

And if you’re wondering what exactly is so exciting about a 9% dividend hike. Well, it’s the secret to 900% total returns—I’ll explain in a moment.

First, let’s appreciate the payout raise trend, which is currently our best friend as dividend investors. This “hike-to-cut” ratio has rallied to its highest level in years:

As I alluded to, payout increases have a habit of making their investors wealthy beyond their wildest dreams. We can think of this as “the dividend magnet.”

Here’s how the magnet produced 900% returns over a decade.… Read more

One of my favorite quotes about closed-end funds (CEFs) comes from Richard Thaler. When writing about why investors bought some CEFs for more than they’re worth, he simply said: “There are idiots,” and that this was “the only satisfactory answer to this … puzzle.”

That, er, very direct, quote comes to mind now because these days, it’s actually pretty easy to pick up CEFs (which yield around 7%, on average) trading at nice discounts to net asset value (NAV, or the value of their underlying holdings). There are literally hundreds of examples, some of them extreme.

The most discounted equity CEF trades at a whopping 26.7% discount as I write this.… Read more

Like many wise money quotes, nobody is quite sure who originally said:

     “When the facts change, I change my mind. What do you do, sir?”

It’s frequently credited to economist John Maynard Keynes. A popular story goes that Keynes changed his mind on a financial issue, was criticized for his “flip flop”—and then delivered the zinger.

QuoteInvestigator.com researched the quip and concluded that Keynes never actually said it. (Keep that bit of market trivia in your back pocket.)

Regardless, the facts have changed on big oil dividends. On September 9, 2015, I warned readers that Big Oil was a “Big Dividend Trap.”… Read more

What the heck would a jump in inflation mean for our dividends? I’m getting that question from readers a lot these days, so today we’re going to take a closer look.

Then we’ll dive into three sectors—and three dividend payers (including one yielding an eye-popping 10%)—you’ll want to put on your radar now.

All three of these stocks boast high yields and/or strong dividend growth, plus big upside potential. Taken together, I expect their total returns to easily outrun any rise in inflation—and interest rates—we’ll likely see.

Money Printer Revs Up

The argument that we’re heading for a jump in inflation is pretty clear—a few days back, we saw the consumer price index (CPI), the go-to measure of inflation, pop 2.6% in March from a year ago, way more than expected.… Read more

This “stocks-up, yields-down” market is clobbering income investors. With stock prices floating higher, yields are crumbling to dust: with the 1.3% payout on the typical S&P 500 stock—a 20-year low—you’d need to invest $2.2 million to get just $2,500 a month in dividends!

(And let’s not forget that the typical S&P 500 stock pays dividends quarterly, not monthly, so your lame income stream would also be pretty lumpy!)

The 10-year Treasury note—long an income go-to—isn’t much better. With a 1.6% yield, you’d still need $1.8 mil to get that same $2,500 a month.

An Oasis in the (Dividend) Desert

Of course, none of this is a surprise to anyone who’s been investing for income over the last decade or so—it’s a slightly worse version of the same old story.… Read more

It’s a no-yield world we dividend investors are living in. But believe it or not, there are some payers with serious yields that get zero mainstream attention. We’ll discuss five in a moment.

I’m talking about dividends between 9.5% and 13.6%! Yes, you read that right—one of these stocks dished 13.6% back to its happy income investors over the past twelve months.

Are these yields safe? That is always the question. The backdrop is certainly better than last year. One year ago, the emergence of the COVID-19 pandemic in 2020 triggered a slew of dividend cuts and suspensions as companies scrambled to preserve cash and remain solvent through the uncertain future.… Read more

Many people spot a closed-end fund (CEF) with a high dividend, a double-digit discount and a big recent price gain and automatically hit the buy button, thinking they’ve got a clear winner on their hands.

But you need to go deeper to make sure your pick is a solid one, as one CEF, the Clearbridge MLP and Midstream Fund (CEM), clearly demonstrates.

CEM holds shares of “midstream” master limited partnerships (MLPs)—or companies that operate pipelines and storage facilities for oil and gas. The fund sports a 12% discount to net asset value (NAV, or the value of the MLPs in its portfolio) today, as well as a 7.9% dividend.… Read more