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

Our man Jay Powell is talking a little more about raising rates. Right on cue, stocks have dropped, and dividend yields have popped!

Our contrarian buying opportunity is here.

But wait. Even with the latest pullback, the yields on the popular names of the S&P 500 are still only 1.3%. And how can you call the S&P 500 cheap when it still trades at a nosebleed P/E of 37?

You can’t.

But lucky for us, there are always overlooked assets out there. To find them, we’re going to skip the S&P and go with another acronym: “C-E-F,” for closed-end fund.

If you’ve heard of CEFs, you know that they’re famous for huge dividends.… Read more

I get plenty of questions about specific closed-end funds from members of my CEF Insider service, which focuses on quick-moving smaller CEFs (here I mean those with sub-$1-billion market caps).

We love these CEF “small fry” because they hand us big dividends (7%+ yields are common in this corner of the CEF market) at a bargain, because these funds get little coverage from Wall Street and the mainstream media.

But when they do get “found,” their discounts disappear fast, catapulting us to some nice price gains to go along with our big payouts.

New 6.5%-Yielding PIMCO Fund: Buy, Hold or Sell?… Read more

Healthcare—along with consumer staples (“buying stuff”) and utilities (“keeping the lights on”)—provide portfolio stability. Plus, they usually pay dividends, too!

Of the three safety sectors, healthcare is a steady growth market, too. Consider these stats from the Centers for Medicare & Medicaid Services:

• National health spending is projected to grow at an average annual rate of 5.4% for 2019-28 and to reach $6.2 trillion by 2028.
• National health expenditures are projected to grow 1.1 percentage points faster than gross domestic product per year during that same time period.
• Between 2019 and 2028, healthcare’s share of the economy will rise from 17.7% to 19.7%.

Far too many investors think inflation is bad news for closed-end funds (CEFs), for a simple reason: they fear it’ll boost CEFs’ borrowing costs. (Because CEFs, of course, use leverage to varying degrees.)

That sounds like a reason to worry. Inflation, after all, boosts interest rates, and higher rates obviously mean CEFs would have to pay more to service their loans.

Bad news, right?

Not so fast! Because nearly everyone forgets the other side to the story—that inflation (at least these days) comes with a strong economy—and that drives investment returns that’ll more than offset any small rise in CEFs’ borrowing costs.… Read more

I recently accomplished something that had been on my “to do” list for no fewer than three months.

I figured out how to log into my 401(K)!

You would think a simple “password reset” would not be that difficult, especially for a guy who has started a software company or three in his day. Well, I’m not embarrassed, just glad that my long personal investing nightmare is over.

What is it about 401(K) access? It’s a circus when we try to log into my wife’s retirement plan, too. (Any task that starts with “logging into her company’s VPN” is off to a rough start.)… Read more

In a levitating market like today’s, we dividend investors absolutely must have a portfolio that does three things:

1. Automatically “times” the market for us.
2. Frees up cash for us to grab bargain dividend stocks on pullbacks and, of course …
3. Pays us a growing income stream!

We’ll get to point No. 1 in a second. Let’s start with point No. 2.

Most people panic when the market drops, but we dividend investors know that volatility is our friend. It’s easy to see this just by looking at what the S&P 500 benchmark SPDR S&P 500 ETF Trust (SPY) has done in the last five years.… Read more

Let’s say you want to generate a middle-class wage using only dividends, but you’ve only got $300,000 to invest. Can it be done?

It certainly can—and it’s easy to do with just three funds you can buy right now.

Drop $300K into these three income generators and you’ll get an outsized 9.8% dividend stream. That translates into a steady $2,450 every single month. And since these funds pay dividends monthly (as opposed to your typical S&P 500 stock, which pays quarterly), you’ll start getting that income in just 30 days (or less) if you invest right now.

Best of all, none of these funds force you to buy into risky small companies, toxic financial derivatives or any other speculative investments.… Read more

There are dozens of huge yields out there that no one ever talks about. I’m talking about payouts 6-times (or bigger) than the pathetic 1.4% dividend the typical blue-chip stock pays.

Swapping Dividend Yield for Shareholder Yield 

These big “hidden yields” really are hiding in plain sight. The key to finding them is to set aside dividend yield for a moment and focus on shareholder yield.

Shareholder yield is a simple measure that goes beyond dividends to show you the big-picture view of what you’re pulling in from a stock—including another way companies pay us that doesn’t get nearly enough press (or at least nearly enough positive press!).… Read more