I had some friends over last weekend and the weather was gorgeous. So of course, I fired up the grill. This wasn’t flipping a few premade burgers and dogs though – we’re talking a dozen steaks, cooked to a perfect medium rare.
In all humility, I cook a steak with the best of them. But there’s not much of a secret to it. I just pick fresh, quality cuts of meat from a local butcher and let the grill do the work.
I approach my personal investing portfolio the same way as my grilling. Namely, it’s all about HIGH QUALITY INGREDIENTS.
This is fundamentally why I have such a problem with many of the most popular index funds out there.
Consider the nearly $170 billion Invesco QQQ Trust (QQQ). It’s benchmarked to the Nasdaq 100 index, but weighted by market value – so Apple Inc. (AAPL) and Microsoft Corporation (MSFT) alone represent more than 22% of the portfolio at present! The massive SPDR S&P 500 ETF Trust (SPY) is only slightly better, with the pair representing just over 12% of the portfolio.
Even worse are the dividends. The SPY yields 1.4%, and the QQQ offers a pathetic 0.6%.
Why not simply go out and buy Apple and Microsoft stock, if you want a tech-heavy portfolio with meager yield?
Or better yet, if you want a diversified portfolio of high dividend stocks that deliver… Why not just cook that up yourself?
At Contrarian Outlook, we have plenty of ideas to help you take control of your investing future and trounce the typical low-yield index fund.
And today, I’ll offer up one more – via a financial services giant that offers a generous and growing dividend thanks to its increasingly dominant position in real estate.
Not only is this pick a great individual holding, it’s also a great example of knowing what goes into your investments.
Real Estate is What Drives Blackstone Dividends
Many of you have likely already heard of investment manager Blackstone Inc. (BX), a $145 billion Wall Street powerhouse. But what you may not know is that BX isn’t just a big name that serves high net-worth individuals via private equity and hedge fund services. It’s also increasingly one of the biggest real estate investors in the world.
Consider that just before the pandemic, Blackstone raised $20.5 billion in a SINGLE PRIVATE EQUITY FUND dedicated to real estate – the largest such amassing of cash in history. Or more recently, there was news that Blackstone just acquired a $13 billion student housing REIT as it continues to push into the space
And why wouldn’t BX be focusing its operations in this way? The stock market is in turmoil, bonds are under pressure amid rising rates… but real estate always delivers.
While some real estate trades directly in public stock markets via REITs, it’s important to acknowledge that the vast majority of commercial real estate is held through consortiums including private equity firms – or companies like Blackstone. That’s because it’s such a capital-intensive sector that you need deep pockets and financial expertise to ink the most exclusive deals.
As Blackstone increasingly gets into this business, it has turned into an income-generating powerhouse.
Consider that in 2012, BX paid total distributions of 53 cents that calendar year… but over the last four payouts, the stock just offered $4.56 per share back to stockholders.
That’s NINE TIMES THE DIVIDENDS after just 10 years, good for a yield of nearly 4% at current prices!
No wonder shares have rallied strongly over the last 12 months amid a “flight to quality” on Wall Street.
If you want to stick with the typical low-yield index fund, go ahead. But if you want an income-oriented portfolio that continues to increase its distributions steadily, it’s time to think differently.
Even Better than Blackstone
Look, I get it. Many folks gobbling up conventional index funds may not be aware there are better options out there. And even if they think there are alternatives, they are intimidated about how to deploy them in their own portfolio.
So let us help.
Contrarian Outlook is built with individual income investors in mind. We know what to look for, and we know what to avoid.
And right now, we’re offering risk-free access to our “Recession-Resistant Portfolio” as a way to help you take control of your financial future.
These hidden-yield stocks have what it takes to weather all the uncertainty the market throws at you. And like Blackstone, they have the potential to deliver rising share prices even as they offer a growing stream of dividends.
The reliable returns of this portfolio can’t be matched by conventional index funds. Instead, we focus on only the highest quality “ingredients” in our portfolio to ensure you maximize your income while minimizing your risk.