2 Quick Steps for $40,000 in Dividends, and Upside, in 2021

Brett Owens, Chief Investment Strategist
Updated: December 29, 2020

If you’re making buy decisions based on the daily gyrations of the S&P 500, you’re setting yourself up for big losses—and costing yourself a shot at big dividends, too.

Why? For starters, at a 1.6% average yield, the popular names simply don’t pay enough. You’d need to save $2.5 million just to generate $40,000 in yearly dividends!

We need a better option—one that lets us save a reasonable amount of money (I’m talking $500,000 to $600,000 here) and still generate meaningful income.

I’ll give you two of my best contrarian strategies for doing that in a moment. First, let me show you why it pays to be patient right now, even though many folks are rushing to buy stocks, with the S&P 500 up 14% as I write this.… Read more

3 Little-Known Funds With Monster Dividends (up to 23%)

Michael Foster, Investment Strategist
Updated: December 28, 2020

As contrarians, we know we need to buy when everyone’s selling. Because that’s when we get gains like this:

Buying Into the March Crash Was Hard—But It Paid Off

Of course, anyone who sold their stocks in the depths of the March crash learned just how damaging that can be. But if you played the contrarian and bought in March, you did great.

But where should contrarians be shopping today, with US stocks, especially tech stocks, at all-time highs? We’re going to explore beyond big tech and focus on a contrarian hunting ground few investors consider: emerging markets.

One reason why developing economies don’t make it onto most investors’ radar is that they’ve been underperforming: in the last three years, their returns have been a fifth of those of US tech stocks, even as these markets have seen strong growth and technological improvements (especially in less-developed Asian nations).… Read more

Wall Street’s 2021 Dividend Dogs: Buy, Hold or Sell?

Brett Owens, Chief Investment Strategist
Updated: December 25, 2020

Exactly who is retiring on the income from safe bonds in 2021?

You might remember when, once upon a time, the 10-year Treasury was a source of acceptable retirement yield:

  • Thirty years ago, we could get 7% or more for sitting on high-quality U.S. debt,
  • Twenty years ago, we could still gather 6%,
  • Even a decade ago, we were pocketing a respectable 4%.

Today? We can’t even collect a lousy 1% yield!

Buying Treasury Bonds? Congrats—You’re Broke!

Put a million bucks into 10-year Treasuries and we’re banking just $9,500 per year in income. That’s below poverty levels. Yikes.

Things aren’t any better on the stock side.… Read more

Market Shift Ahead: Here’s How to Play It for 7% Dividends (and Upside)

Michael Foster, Investment Strategist
Updated: December 24, 2020

Let’s take a look at how the new stimulus bill affects our portfolios—and dividends!—then look at how we’ll invest in closed-end funds (CEFs) for 7%+ dividends as 2021 unfolds.

Cash to Consumers = Bigger Corporate Profits (and Dividends)

One thing’s for sure—unlike the spring package, this one eliminates the problem of big companies absorbing billions in aid. This package is focused on putting cash in consumers’ hands, which I think we can all agree will do a better job of stimulating the economy.

For starters, taxpayers will get $600 in checks sent to them, while people on unemployment will get an extra $300 per week.… Read more

27% Returns After a Dividend Cut? Here’s How

Brett Owens, Chief Investment Strategist
Updated: December 23, 2020

When this closed-end fund (CEF) lowered its monthly dividend for the first time in 17 years, many income investors (understandably) panicked and sold.

Too bad for them. They missed out on 27% returns over the next 20 months.

Can a dividend cut actually be a good thing? Like life itself, it’s complicated—but my short answer is “yes.” Here’s when (and why).

CEFs are the exception to the “dividend cuts are bad” rule. In CEF-Land, payouts are taken from a fund’s portfolio, which is represented by a fund’s net asset value (NAV). Sure, the funds that we buy generally have income streams that are supposed to “power” NAV higher.… Read more

A Powell-Proof, Yellen-Proof Strategy for 2021 (7% dividends ahead, 20% gains)

Brett Owens, Chief Investment Strategist
Updated: December 22, 2020

What are we dividend investors to expect in 2021? Let’s look to Washington, DC, where the switch on Jay Powell’s printing press is stuck in “high”:

Money Supply Surges—With No End in Sight

With Powell’s fiat money keeping (what’s left of) the Main Street economy afloat, you can bet that his “instant” cash will keep rolling in. He’ll have a willing partner in incoming Treasury Secretary Janet Yellen, who followed the same strategy when she was Fed chair:

New Boss Same as the Old Boss

This is a recipe for inflation once the economy gets back on its feet. Back in September, we discussed some stocks that make solid inflation hedges by hiking their dividends faster than prices (and inevitably, interest rates) rise.… Read more

This 7.3% Dividend (With Upside) Is Perfect for 2021

Michael Foster, Investment Strategist
Updated: December 21, 2020

There’s a grinding pandemic and stocks are still up 15%! It’s tough to believe, given the year we’ve all lived through, but here we are.

So what the heck do we do now? Is there more upside ahead or is another big plunge around the corner?

You’re not the only one asking this question—everyone is. And the media and Wall Street, as always, feel they have the answer. A quick glance at the CNN Fear and Greed Index shows that we’re at the top end of “greed”—not exactly in “extreme greed” territory but getting there.


Source: CNN Business

Usually, when the market has gotten too greedy, it’s time to get fearful.… Read more

3 High-Yield ETFs (Paying Up to 11%) to Avoid in 2021

Brett Owens, Chief Investment Strategist
Updated: December 18, 2020

Here at Contrarian Outlook, our beat is income, and we’re often asked for analysis on high-yield ETFs. Today, we’ll look at three funds paying up to 11% (yes, that’s no typo).

I appreciate the ETF popularity. They’re cheap. They’re tax-efficient. They’re  well-marketed. They’ve got cutesy tickers.

But income investors who blindly buy into the hype, unfortunately, are not getting the most dividend for their dollar.

The real dividend deals are found in ETFs’ lesser-known cousins, closed-end funds (CEFs), which often dish even bigger payouts (and a monthly cadence, to boot). CEFs can also trade at discounts to their net asset values, because they fly under Wall Street’s radar.… Read more

3 Big Dividends That Soared in 2020 (Time to Take Profits)

Michael Foster, Investment Strategist
Updated: December 17, 2020

I’ve been hearing from a lot of readers who are sitting on some nice gains this year—and now they’re wondering if it’s time to sell.

Should you?

As with so many other things in 2020, it depends. What are you planning on selling? With many closed-end funds (CEFs), this is the time to buy more, as they haven’t fully priced in the vaccine- and stimulus-fueled recovery we’re likely to see in 2021. But with some CEFs, there are plenty of reasons to consider taking some money off the table.

Today we’re going to zero in on three such funds. They boast attractive portfolio holdings and high dividend yields—more than 8% in one case.… Read more

6 Dividend Questions for 7%+ Yields in 2021

Brett Owens, Chief Investment Strategist
Updated: December 16, 2020

Thank you to our 1,581 Contrarian Income Report subscribers who attended our webcast last week! My publisher described it as a “firehose of information”—hopefully, that was a good thing!

We have you, our thoughtful reader and income investor, to thank for the inspiration behind the firehose. We fielded 45 questions before the event and another 127 on the call, for a total of 172. Amazing.

As promised, I have read each and every question (as has our excellent customer service team). In the weeks ahead, we’ll discuss as many as I can find white space for. Let’s start with six today.… Read more