How This Weird “Dividend Magnet” Drove 252% Gains (and Crushed ETFs)

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How This Weird “Dividend Magnet” Drove 252% Gains (and Crushed ETFs)

If I can give you just one piece of advice to start 2023, it’s this: do not trust your dividend income to ETFs!

It’s one of the biggest mistakes I see people make—especially with the market’s gains this year. These first-level players (wrongly!) think that in a rising market, they can buy pretty well anything and be A-OK.

Not so.

In fact, a rising market when you’re most likely to buy low-quality investments, puts your portfolio in danger in the next downturn. Just ask anyone who bought crypto or profitless tech in 2021!

And dividend ETFs are at the very top of our list of assets to avoid, not only now but always.… Read more

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Buying This Fund Is Like Buying Apple With a 12.1% Dividend

We’ve seen a big bounce (and 12%+ dividends!) in one particular type of closed-end fund (CEF) this year—and all of my buy indicators suggest this profitable play is still in its early stages.

Specifically, I’m talking about tech-focused CEFs—which we’re getting a nice second chance to buy thanks to last week’s earnings whiffs from the likes of Apple (AAPL) and Alphabet (GOOGL).

Buying a tech CEF is like buying an ETF that focuses on technology, but with two key differences:

  • Big dividends: the CEF we’re going to analyze today yields 12.1%—and it pays dividends monthly, too. You and I know that both of these things are unheard of in the world of “regular” stocks and funds.

… Read more

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This 11% Dividend Stock Has 11%+ Upside, Too

What’s better than a safe 11% dividend? How about one with 11% upside or more, too!

Oil and gas stocks are in the midst of a multiyear bull market. China is about to reopen, which will reignite energy demand.

Which means the time to buy the dip in the black goo—especially dividend-paying energy stocks—is right now.

Let’s start with that 11% payer which also boasts a unique dividend distribution model.

A Twisted Path to Big Energy Dividends

Pioneer Natural Resources (PXD), a Texas-based oil exploration company that’s a pure player in the enormous Permian Basin, yields 11%.

Eleven percent!… Read more

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This REIT Is an MVP That Yields Nearly 3X the Competition

It’s a new year, and that means a lot of suggestions for new approaches to investing.

But here at Contrarian Outlook, we’re not interested in change as the illusion of progress. We’re only interested in one thing – long-term investments that allow us to retire worry-free!

So don’t worry, friends… no gimmicks for you today! Just another case-study in our proven investing strategy.

As I have outlined in previous analysis, my go-to income investments are what I like to call “MVP” stocks. Those are companies that have strong Management, an attractive current Valuation for shares, and generous and sustainable Payouts to provide reliable income.… Read more

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CEF Return of Capital Explained (Hint: It’s a Benefit, Not a Flaw)

We’ve been getting a number of questions from CEF investors in the last few weeks about return of capital, or ROC.

This is a measure that shows up regularly with CEF dividends—and it makes many folks wonder if their funds are simply handing back the money they’ve invested as part of their payout.

(Note that much of what we’re going to discuss below is tax related. I’m not a licensed tax professional, so I can’t give you tax advice. You should consult a tax professional for details on your own personal situation.)

First, let’s be clear that all CEFs that are publicly traded on US exchanges are actively investing in something, with funds specializing in municipal bonds, real estate, stocks, preferred shares, real estate investment trusts (REITs) and other assets.… Read more

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This Fund Pays 13% and We Dumped It. Why?

A few weeks back, bond giant PIMCO trimmed a bunch of payouts from its closed-end funds (CEFs). Which was no bueno for income investors, who buy CEFs solely for their dividends.

We don’t own any PIMCO funds in our premium portfolios currently. But readers, who rightfully recognize me as a PIMCO fanboy, have written in to ask what’s up.

“Any thoughts on PIMCO recent slashing of dividends? Do you think they will also cut PDI’s dividend?”—John S 

John, you know me well. Maybe too well! Here’s a live look at my nightstand which boasts a copy of The Bond King: How One Man Made a Market, Built an Empire, and Lost It All.… Read more

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Our 3-Part Strategy for 20%+ Dividend Growth in 2023

If 2022 taught us anything, it’s that we need to swing our portfolios away from this:

We’re Fading “Cardiac” Share-Price Action Like This … 

That’s the chart of “America’s ticker”—the SPDR S&P 500 ETF Trust (SPY)—last year. I call SPY “America’s ticker” because it’s by far the most popular way to track the S&P 500.

But its popularity does not translate into safety. Just holding this simple index fund last year meant taking a 20% haircut—with plenty of heart palpitations along the way! That’s why we want to shift our portfolio returns toward the smooth and steady growth of dividends:

… And Toward the Serene Upward Drift of Dividend Growth

That’s more like it!… Read more

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3 Reasons Why 19%+ Dividends Are Dangerous for Your Retirement

Imagine what you could do with a 19% dividend.

To be clear, any dividend that high simply isn’t sustainable. So if you do see one, I don’t recommend buying.

Still, the thought’s nice. With a 19% yield, financial independence becomes easy. Want to live on $60,000 per year? Well, conventional wisdom says you’ll need at least $1.5 million to generate that kind of income, and some advisors will tell you to save $2 million, just to be safe.

But a 19% dividend? Suddenly it only takes $316,000 in savings to secure $60,000 in yearly income. That cuts down how long one needs to work and save by decades.… Read more

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2 Cheap 11.2% Dividend Stocks and 1 Paying “Just” 9.5%

Today we’ll discuss a duo of cheap dividend stocks paying 11.2%. And, for good measure, we’ll throw in another bargain even though it “only” yields 9.5%.

I jest because I love. Dividends, that is. And bear markets don’t usually last much longer than this. So, it is double-digit yield shopping we go.

These are serious yields we’re looking at—the kind we need to retire on dividends alone. They’re hard to find among over-followed, over-analyzed and over-owned blue-chip stocks. But they’re abundant in BDCland (populated by business development companies (BDCs), of course).

Like real estate investment trusts (REITs), business development companies are a creation of Congress.… Read more

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Why This “RAVEN” 10%+ Dividend Strategy Will Win in 2023

These days, it seems like every investor is chasing that one big thing that will make them rich—the newest stock, technology, fad or whatever.

We contrarian dividend investors know these folks well—you probably have a friend or family member who chased down gains in crypto, NFTs, profitless tech or heaven knows what else over the last few years.

Heck, they may have even taken a poke or two at you about your “boring” dividend stocks and closed-end funds (CEFs)!

Then 2022 came along. And while everything got hit last year, we CEF investors had the last laugh, as we could use our funds’ 7%+ dividends to pay the bills.… Read more

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