These Mega-Dividends Shell Out Up To 19% … But Are They Safe?

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These Mega-Dividends Shell Out Up To 19% … But Are They Safe?

As we return Mariah Carey to the ocean depths for another year, we turn our attention to our next seasonal siren—double-digit dividend stocks.

They are, after all, the perfect way to retire on dividends, right? Put $500,000 in a portfolio of 10% payers and we’re looking at $50,000 in annual dividend income. Plus we get to keep our principal.

Right?

Not always. Most double-digit divvies are “cheap for a reason.” These are dogs dressed up as dividend payers. But the payouts are often in danger. Which means price stability is equally dicey. Which is why we often say no thanks to these mega-headline yields.… Read more

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This Old-Timey Stock Ploy Is Dead (Try This “1-Click” Dividend Plan Instead)

If you’ve been investing long enough, you’ve no doubt run across the 60/40 portfolio. Maybe you’ve used this approach yourself. Or maybe your financial advisor told you about it (it’s an advisor favorite!).

As the name suggests, the 60/40 portfolio is simply a portfolio that seeks to automatically balance risk by holding 60% in stocks and 40% in bonds.

It sounds sensible enough, but history shows that people who invest by this rule have been leaving a lot of money on the table for a long time:

60/40 Portfolio Pays Too High a Price for Low Volatility

One quick glance at US stocks, seen here in purple through the Vanguard Total Stock Market ETF (VTI), and bonds, in orange through the Vanguard Total Bond Market ETF (BND), shows a problem.… Read more

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4 Dividend Resolutions for 2024

Raise your hand if you want to actively work for income in 2024.

(Please note your dividend strategist already has his pointer finger in the tip of his nose. Not it!)

Here at Contrarian Outlook, we prefer passive dividend income to active income, thank you very much. Because trading hours for dollars is, let’s just say it, such a drag.

A job? Tired. Dividends, meanwhile, are wired. Since ‘tis the season for resolutions, let’s discuss my top four to retire on dividends in 2024.

Dividend Resolution #1: Project Our Income

If you’re a serious dividend investor, I hope you took my advice last week and grabbed your risk-free trial to Income Calendar.… Read more

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These 8%-Paying Funds Are “Must Buys” in 2024 (With 1 Critical Caveat)

If there’s one thing we need to remember when we buy high-yield closed-end funds (CEFs), it’s this: always demand a discount.

Well, make that two: always demand a high dividend, too! Because CEFs are renowned for their high—and often monthly—payouts, with the average CEF yielding around 8% today.

But back to discounts. Luckily for us, they’re common with CEFs: of the 422 CEFs tracked by the CEF Connect screener, 384 trade at discounts to net asset value (NAV).

That’s a great place to start our search for top-notch CEFs, because these discounts are basically free money: they let us pick up, say, Mastercard (MA) for 85 cents on the dollar through a CEF like the Gabelli Dividend & Income Trust (GDV).… Read more

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Your Retirement Playbook: How Much You Need + 3 Big Dividends to Get There

Let’s go ahead and use the quickest, most reliable strategy I know of to kickstart a reliable 7% income stream that rolls our way every month.

My specialty is writing about stocks, bonds and closed-end funds (CEFs), but all of these are really a means to the end of achieving financial independence. What really matters is how much income you can pull out of these investments to fund your lifestyle.

The answer is a lot more than you might imagine. I’m going to show you how to pull 7% out of three funds that pay monthly and offer diversified income streams based on bonds issued by large, well-established companies (think of this portfolio as being like a big commercial bank, but one diversified across the world).… Read more

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Really Rich REITs: 7 Massive Yields up to 15%

Select real estate may be the income investing play for 2024. As I write, seven real estate investment trusts (REITs) are dishing dividends from 8.7% all the way up to 15.4%.

These REITs—and their ilk—are literally designed to deliver dividends. That’s how Congress wrote the rules when they legislated these real estate investments into existence back in 1960.

REITs avoid taxes at the corporate level. But in exchange, they need to pony up at least 90% of their taxable income and redistribute it to investors as dividends.

As a result, our average REIT yields somewhere around 2x to 3x the market.… Read more

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The “3 Winds” That Will Drive Our 8%+ CEF Dividends in 2024

The stock market’s 2023 recovery begs the question: are we in for a reversal next year? And if so, what does that mean for our closed-end funds (CEFs)?

It’s a natural concern, but it’s important to remember that bull markets don’t die of old age. Plus, we aren’t in a bull market—the S&P 500 still hasn’t fully recovered from its drop over the last two years, let alone priced in the economic growth over that time.

Whether stocks will or won’t price in that growth in 2024 depends on three things we’re likely to hear a lot about next year. The first will be something that’s seemingly been everywhere for the last two years.… Read more

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Are You Dedicated to Dividends? If So, You’ll Know This Answer.

If you are a serious dividend investor, then you know the answer to this question:

How much dividend income are you going to make in 2024?

In other words, what are your projected dividends next year?

If you don’t know, then you’re not as dedicated to dividends as you thought. Disappointing, but fixable with Income Calendar.

And please, don’t tell me I’m being hard on you. If that’s the way you feel, then this is the tough love that you need. Your wakeup call for 2024.

It’s time to treat your dividend investing like a business. Because it is.… Read more

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Can ChatGPT Project Dividends? Not as Good as This Tool

I hear that robots are standing by to run the world.

Fine—just have them send us a nice, neat report on our dividends. Preferably daily. Thanks.

Seriously, my fellow contrarian, enough with the hype. I tried, albeit briefly, to use ChatGPT as a research assistant for this column. Really it was a softball that I knew the answer to:

Hello ChatGPT, how much did iShares 20+ Treasury Bond ETF (TLT) drop in 2022?

The answer, of course, was 31%, but the robot hadn’t been fed the info so didn’t know. I lost interest and carried on as usual, “manually” verifying my numbers.… Read more

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A 7.9% Dividend With No Taxes? This Ticker Does That (and More)

Today we’re going to use a simple strategy to (legally!) beat the tax man. The key is a (too) often-ignored group of funds whose dividends are beyond the reach of the IRS.

The low-risk assets behind this income stream really should be part of any income investor’s portfolio. And the three tickers we’ll discuss below, which yield up to 7.9%, are a great place to start. Thanks to their tax-free status, their “real” yields will likely be considerably more for us.

Enter “Boring But Beautiful” Municipal Bond Funds

Here’s the truth on taxes: If you’re an American and you receive any kind of income, you’re going to get taxed.… Read more

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