Many investors believe that financial markets react to the news. But it’s a bit more nuanced than that. Asset prices move with respect to their expectation of the news, versus the actual events that play out.

It’s a cliché, but true: Markets don’t like uncertainty. As I write, it appears that we will (eventually) have a clear winner to the 2020 election. Social unrest also appears to be less than feared. Plus, the likelihood of Congressional gridlock increases the chances that taxes will not rise.

All-in-all, a “slam dunk” for Mr. and Ms. Market, who went to bed Tuesday night fearing worse.… Read more

Tech has taken a punch in the face this past few weeks—prompting many readers to wonder if it’s time to sell after booking some big gains in the sector this year.

No way. We’re dividend investors first and contrarians second, so we’re going to take the other side of that bet and buy this tech “mini-dip.” We’ll do it with closed-end funds (CEFs) yielding 7% (and more) that also give us a unique “double discount” to hedge any downside we might see in the coming months (this is 2020, after all) and a good shot at outperforming tech and the broader market, too.… Read more

If you woke up this morning and thought to yourself:

“Well, at least that’s over with!”

You’re not alone. Historically speaking, financial markets in the US don’t seem to care which side wins on Election Night (or, in the drawn-out days and weeks that will follow). The important thing for the markets is that the election uncertainty is largely over.

As the political carnival fades into our rearview mirror, we’re left with some dividends that made out better than others. Let’s review these winners and losers now.

Winner: Financial Markets

Since March 2009, the long-term (multi-year) trend of the stock market has been up.… Read more

I sure hope you haven’t listened to the bleating pundits begging us to sell everything ahead of Election Day. These talking heads don’t realize that, historically speaking, cash has already turned to trash.

It’s at times like these—when everyone is panicking and another big selloff seems right around the corner—that fortunes are made. And they’re not made by being out of stocks for the six months when they tend to rally (November 1 to May 1).

I know this sounds strange, but hear me out. Because we’ve got a shot at big gains (and dividends!) setting up our portfolios before E-Day comes and goes.… Read more

They’re here again: more articles warning us of the “dangers” of municipal bonds. Don’t take the bait, because these wrongheaded articles will steer you away from some of the safest (and highest) dividends out there.

One claim you’ll read in many of these pieces is that states are losing tax revenue, which could mean they’re gong to default on their debt or go bankrupt. In reality, municipal-bond bankruptcies are really rare.

And I mean really rare: since 1970, the municipal-bond default rate has been 0.0043%, according to Moody’s Investor Services. To put that in perspective, the CDC says your chance of getting hit by lightning is 0.0002%.… Read more

Why choose between dividends and growth when we can have both?

Thanks to popular payout programs from the likes of Apple (AAPL) and Microsoft (MSFT), investors can buy a growthy tech stock and even enjoy a little income on the side.

“63% of the (information technology) sector constituents paid a regular dividend,” says Todd Rosenbluth, Head of ETF & Mutual Fund Research for CFRA. In other words: While tinier tech stocks might have to plow everything into M&A, larger tech stocks that have already reached scale generate lots of cash—which they can shower shareholders with.

But there’s just one catch with these tech dividends.… Read more

I really hope you’re not following the antiquated “4% rule”—which says you should withdraw 4% of your nest egg (and no more!)—in retirement. Because if you are, you’re staying in the workforce way longer than you need to.

In fact, you may already be financially independent and not even know it!

Today we’re going to look at why this theory could needlessly delay your retirement (in the words of the 4% rule’s author himself!).

I’ll also show you an easy way to grab almost twice as much from your retirement nest egg in every one of your golden years—I’m talking 7% easy here—and go one step further: live on dividends alone.… Read more

Last week, on our dividend trading webcast, several readers asked me how I manage my own money. Well, it’s a bit different from the “buy and hold” (or hope!) strategies employed by most income investors. Here’s why…

I don’t like holding full positions during downturns. When the market looks like it’s about to roll over, or when it actually begins to roll over, I (personally) head for the sidelines.

And when the pullback is over, I flip my cash back into the market. It’s that simple.

Following this strategy, there have really only been four “trades” to make all year.… Read more

It’s rare when we get not one but two crashes bigger than 10%+ in a single year—but hey, it’s 2020. Anything goes.

But take just a second and imagine that you dodged both of those disasters, resting easily on the sidelines during the chaos. Then you moved into stocks for the rest of the year. In that case, 2020 just may be your best year yet!

 A “Dream” Strategy (That’s Possible to Achieve!)

Of course, no one can precisely predict the market’s next move. But what I’m about to show you is as close as I’ve ever seen an investing system get.… Read more

Four years ago, I published an article detailing how a young upper-middle-class professional could quit working and still survive on dividends alone in just five years. It was a claim that many folks thought was impossible to achieve (and they told me so in the comments!).

But history has proven that, in fact, it was true.

Today I want to show you how following the advice I gave back then would have produced financial independence (or an income stream that could cover basic needs) in just five years—and how you can replicate that same success today.

How It Works

Back then, I made three arguments:

1. A young professional earning $70,000 a year and, being very disciplined, managed to save about two-thirds of that income, could use the stock market to build a substantial nest egg in half a decade.