My No. 1 Strategy for Big Gains (and Dividends) in 2018

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With 2017 in the books, it’s time to turn our attention to 2018.

And if you invest in closed-end funds (CEFs)—and you should—there’s a lot to look forward to.

In a moment, I’ll show you the one type of fund not to buy in 2018—and give you a simple 2-step plan that lets you zero in on the funds set to outperform the market and deliver you outsized dividends, too.

First, I want to give you my prediction for the market as a whole in 2018. You’ll be pleased to hear that a lot of the things that made 2017 fantastic for investors are still in play as we roll into the new year.…
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Tax reform has been signed into law, giving the market a booster shot as we kick off 2018. Republicans took a hatchet to the corporate tax rate, which should translate into more profits, which in turn should trickle down to investors in the form of earnings-driven gains, buybacks and dividends.

Generally speaking, that’s fantastic news for anyone holding blue-chip dividend stocks. But that’s not the same thing as saying every last well-known income play is worth carrying right now.

They’re not.

Eventually, some blue-chip stocks get caught in a rut where the growth that made them a household name in the first place starts to disappear.…
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2017 was an amazing year for closed-end funds (CEFs)—and 2018 is setting up to be just as strong, if not stronger.

So if you’re on the hunt for big dividends and upside this year (and who isn’t?), this is a perfect time to take a closer look at high-yielding CEFs.

That goes double for the 10 unloved CEFs I’ll show you in a moment.

In fact, I’ll go as far as to say this: I predict these 10 funds will be this year’s biggest comeback story, after investors mostly threw them over the side in 2017.

More on those in a moment.…
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What will 2018 hold for income investors?

Well, it depends where you look. Buying pricey blue chips for 2% or 2.5% yields looks like a crowded, low upside trade. Same with most mainstream bonds, which don’t pay much more.

But – thanks to a lack of attention from “first-level” financial websites – there are some bargains still worth buying in 2018. I’m talking about dividends of 8% or more, with extra price appreciation potential to boot.

What are these best buys? And how are they possible in this 2% world?

First Let’s Thank Fed Fears, Which Are Probably Overblown (Again)

This time last year, I told you that Fed rate hikes wouldn’t affect us income investors in 2017.…
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You and I both know the spoils from the GOP tax plan will go right into shareholders’ pockets—so let’s discuss how we can grab our piece of the action. And outsized dividends with 20% price upside to boot!

It all comes down to zeroing in on companies that do 2 simple things. I’ll reveal what they are—and give you 3 terrific “tax plan buys” as I go along.

But first, let me be clear that I’m not taking a side here: no matter if you think the tax plan is a masterstroke or a catastrophe, as an investor, you need to check your politics at the door and take a hard look at the landscape in front of you.…
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Worried that a bursting bitcoin bubble will sideswipe stocks in 2018?

Don’t be. Because as I’ll explain in a moment, the hysteria over the so-called “cryptocurrency” is actually good for stocks this year, no matter if bitcoin explodes for a 10,000% gain … or flames out and crashes back to earth.

I’ll also show you the one surprising group of stocks poised to benefit from bitcoin in 2018, no matter what happens.

First, if you’re like most people and find bitcoin a complete mystery, stick with me for a minute and I’ll show you how it works—and what’s pumping up the bulging bitcoin bubble.…
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Investors looking for income with low risk tend to gravitate heavily toward bonds, but their efforts are often better spent in preferred stocks. These “hybrid” securities commonly pay 5% or 6% but gyrate far less than common stocks – certainly less than most shares that offer a similar amount of yield.

So, what exactly is a preferred stock?

Preferreds are simply another way companies raise capital. However, unlike common stock whose value fluctuates with the success (or lack thereof) of the company, preferred stock trades around a “par value” much like a bond, and they pay fixed dividends – often yielding far more than the common shares.…
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This single chart (from Yardeni Research) reveals the secret to 55.8% dividend yields:

The Power of Dividend Growth

Source: Yardeni Research

What are we looking at here?

Simply this: if you’d invested in the average S&P 500 stock back in 1970, you’d be yielding 55.8% on your original buy today. (And in just a few minutes, I’ll reveal 5 stocks whose strong payout growth will get you there a lot faster than that.)

Think about that: 55.8% is more than half of what you originally invested—returned to your pocket every year in dividend checks!

Even if you didn’t buy in till 1990, you’d still be yielding a hefty 14.6% today.…
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Today I’m going to show you the 3 best closed-end funds of 2017—and reveal a surprising prediction for each of these powerhouse CEFs in 2018.

The prediction? That after soaring up to 58.8% in 2017, these 3 rock-solid CEFs aren’t done yet. In fact, I see all 3 posting double-digit gains in the next 12 months, too!

More on these 3 winning funds in a moment. (And if you’re unfamiliar with CEFs, click here for a full primer on them.)

First, let’s take a very fast look at…

The Year That Was in CEFs

In CEFs, the biggest winners of 2017 had a lot in common, and that made it easy to separate the losers from the winners, because the whole market seemed to agree on 3 things:

  1. Tech is where to put your money.


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Q: Are REITs (real estate investment trusts) going to be hurt by the new tax reform?

Not at all. In fact, the new tax plan actually favors these generous dividend payers.

Let me explain why – and then point you towards the best REITs to buy for 2018.

A Smaller Tax Bill on REIT Dividends

The IRS already allows REITs to avoid paying income taxes if they pay out most of their earnings to shareholders. As a result these firms tend to collect rent checks, pay their bills and send most of the rest of the cash to us as dividends.…
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About Author

Brett

Hi, I’m Brett Owens – and I’m a financial junkie. My “problem” started incollege, when I got a little dose of the stock market – man, was I hooked…in no time, I was reading the Wall Street Journal religously.

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