Yes, You CAN Beat the Market. These 7%+ Dividends Do It All the Time

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Don’t fall into the trap of thinking you can’t beat the market. It’s total nonsense—and that goes double if you look outside stocks, to other assets.

Consider preferred stocks for example—they’re “bond-stock” hybrids that trade on an exchange, like stocks. But like bonds, they trade around a par value.

The best part is the income. Our favorite way to buy preferreds—through actively managed (we’ll come back to that in a second) closed-end funds (CEFs)—gets us yields of 7%+.

And select preferred-stock CEFs trade below their net asset value (NAV, or the value of their portfolios) today—with some of those discounts reaching well into double-digits.… Read more

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Is there still a chance to buy the bank dip? You bet—with nifty yields up to 9.4%!

We’re going to avoid the regional lenders, which pains me to say because I love banking with the small guys. But I’m not looking to own them as the economy slows down.

No, nothing personal, but I’ll take the banking behemoths. None of them yield 9.4%, of course, but we engineer these payouts easily via their preferred dividends.

Preferred stocks are often referred to as stock-bond “hybrids” given that they share some characteristics of each asset. A quick breakdown:

  • They represent ownership in a company (like a stock)
  • They typically don’t offer voting rights (like a bond)
  • They pay dividends (like a stock)
  • Their dividends are typically fixed at a certain level (like a bond)
  • They can rise and decline based on the performance of the underlying company (like a stock)
  • But they tend to be much more stable, trading around a “par value” like a bond)

Most noteworthy, for income fanatics like you and I, is that their dividends are plump.… Read more

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I hate to see folks trying to time this banking mess with regular stocks like JPMorgan Chase & Co. (JPM). Especially when they can easily swap their big-bank stocks for “preferred” dividends yielding 8% and up!

That’s a far sight better than the magic trick mainstream investors are attempting, as they try to dodge into big banks like JPM at just the right moment.

JPM Looks for a Bottom

Worse, JPM only yields 3% today. And you and I both know that markets can thrash around for weeks looking for a bottom.

That’s why, instead of squinting at price charts, we’re calmly picking up some sweet “backdoor” dividends from these very same banks, but with a yield that’s 173% bigger.Read more

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Boring is perfect when we’re talking retirement investing.

We’ll let others take the S&P 500’s sad 1.7% yield and frequent mood swings. While we direct our attention to an elite trio that yields 8.2%.

You read that right. Eight-point-two-percent per year… in dividends alone! That’s an excellent $82,000 in annual income on a million dollar portfolio. Or $41,500 on a $500K nest egg. You get the idea.

Plus our yield cushion will help soften a September selloff. (Because let’s face it, this is most likely a bear market rally we’re in the middle of.)

No, the stock market doesn’t just give out 8.2% yields for nothing.… Read more

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With the press bleating about the yield curve inverting (again!) and scaring everyone with recession talk, we dividend (and particularly closed-end fund!) investors need to talk strategy.

I’ll drop a ticker that’s perfectly suited for these weird times in a second. First, let’s dive into what the inverted yield curve is—because it actually sets up a nice buying opportunity for us.

The “yield” in “yield curve” refers to the yields on the 10-year and 2-year Treasury notes. In normal times, the 10-year yields more than the 2-year, but in recent days, that gap has shrunk to nearly nothing:

2-Year Yield Reels in the 10-Year: Recession Ahead?Read more

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Preferred stocks are the little-known answer to the dividend question:

How do I juice meaningful 5% to 6% yields from my favorite blue-chip stocks?

“Common” blue chips stocks usually don’t pay 5% to 6%. Heck, the S&P 500’s current yield, at just 1.3%, is its lowest in decades.

But we can consider the exact same 505 companies in the popular index—names like JPMorgan Chase (JPM), Broadcom (AVGO) and NextEra Energy (NEE)—and find yields from 4.2% to 6.9%.

If we’re talking about a million dollar retirement portfolio, this is the difference between $13,000 in annual dividend income and $42,000. Or, better yet, $69,000 per year with my top recommendation.… Read more

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Members of my CEF Insider service often tell me they’d love to know a lot more about the people at the helm of closed-end funds—the good, the bad and the ugly.

It makes sense: after all, when you buy a CEF, these folks play a huge role in whether you notch a big gain (and income stream) or, well, not so much.

An Insider’s View

As one of the few analysts who focuses solely on CEFs—especially smaller CEFs, with market caps of $1 billion or less—I’ve had several conversations with managers at CEF companies from across the market.

A common theme?… Read more

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It’s a question that’s absolutely critical when judging a closed-end fund: how safe is the dividend?

This is particularly crucial when you consider the huge yields the average CEF offers compared to their ETF cousins. For the 2,918 ETFs available to US investors, the average payout is 1.9%, partly because 735 of these funds pay nothing at all. But even without those, the average ETF yield is still a pathetic 2.5%.

CEFs? For the over 450 covered by my CEF Insider service, the average yield is 7.3%, and only nine yield less than 1%. In fact, over 85% of CEFs yield more than 4%, while just 9% of ETFs do!… Read more

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Members of my CEF Insider service often tell me they’d love to know a lot more about the people at the helm of closed-end funds—the good, the bad and the ugly.

It makes sense: after all, when you buy a CEF, these folks play a huge role in whether you notch a big gain (and income stream) or, well, not so much.

An Insider’s View

As one of the few analysts who focuses solely on CEFs—especially smaller CEFs—I’ve had several conversations with managers at CEF companies from across the market.

A common theme? They’re all frustrated that the average investor doesn’t know the many benefits CEFs deliver.… Read more

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I get a lot of questions from readers about high-paying “preferred shares.” And most of these queries have one thing in common: worry!

You see, many of these folks are concerned that preferreds—known for their outsized dividend yields funded by safe cash flows—will get swamped as interest rates rise.

So today I’m going to show you why you can set these fears aside. Further on, I’ll reveal a preferred-stock fund that lets you rope in an outsized 7.3% cash dividend and price upside, too.

First, I should say that preferred shares aren’t alone in stoking investor fears. Other high-yield investments are, too, such as real estate trusts (REITs) and utilities.…
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