Late Cycle Investing: Dividend Stocks for 2020 and Beyond

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Late Cycle Investing: Dividend Stocks for 2020 and Beyond

Until a flu-like virus emerged halfway around the world, it’s been three peaceful months since we’d seen a “1% up or down day” in stocks. As usual, the volatility inspired investors to reflect upon the advanced age (almost eleven years) of our current bull market.

To paraphrase the legendary rock band Chicago, does anybody really know what time it is in the rally right now? “Late cycle” is a popular guess. But how late?

Did the streetlights just pop on, or is it 2am with money managers stumbling into their taxis and Ubers outside?

Most rallies don’t make it to eleven, but then again, most don’t follow financial crises either.… Read more

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How to “Inoculate” Your Portfolio From Coronavirus (and Get 6%+ Dividends)

I’m sure you’ve noticed stocks whipsawing in the past week on fears of the spreading coronavirus. We’ll talk income investment strategy shortly, with a specific focus on safe dividends and profits, regardless of where the markets go from here.

First, I should say that I’m not going to go into the health or political implications of this outbreak, which has infected thousands as I write this, with 99% of those in China.

As investors, we need to look at the situation through a clear, logical financial lens. And the good news is that right now we have a great opportunity to safeguard (and even grow) our nest egg—and our dividend income, too.… Read more

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5 Steps for 15% Per Year (Whether Bull or Bear)

Will this bull market actually die of old age this year?

The macro picture is dicey and stock valuations are pricey, but we must stay invested. The stock market goes up about two-thirds of the time. Permabears miss out on compounding and it’s not as easy to be a part-time bear as it sounds.

To illustrate this let’s consider a study by Hulbert Financial. The firm looked at the best “peak market timers”–the gurus who correctly forecasted the bursting of the Internet bubble in March 2000 and the Great Recession in October 2007.

These were the clairvoyant advisors who had their clients out of stocks and mostly in cash when the S&P 500 was about to be chopped in half.… Read more

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Perfect Dividends for the Roaring (or Recessionary?) 2020s

Are we kicking off another episode of the “Roaring 20s” today?

Who knows. Nobody really predicted the 2010s would be an end-to-end bull market. Yet the most hated rally of all-time resulted in stocks nearly quadrupling:

The Epic Rally Few Investors Believed In

A million bucks that sat in a boring S&P 500 fund a decade ago would have grown to $3.5 million. Unfortunately, many experienced investors did not participate in this full rally, still being shell-shocked after 2008.

(Which illustrates why it is important to always be fully invested. Investors who slept through the ’08 carnage quickly made their money back in the years to follow.… Read more

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These Brazen Insiders are Buying Their Own 9.7% Yields Like Crazy

Insider buying can be a great indicator for us income investors to buy alongside management. After all, when the big bosses reach into their own pockets to purchase their own payout streams, it’s a signal that they are confident in more than just the next dividend.

They believe their stock has upside, too. Often this results in total returns (including dividends) up to 214%. I’ll show you some examples, and also break down some current “buy” signals, in a moment.

First, let me make sure we are not mixing up insider buying with insider trading. They are two different things.… Read more

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These 7.5% Yields Will Survive a 2008 Repeat

“I’m 11 years older now. Brett, I just can’t have a repeat of 2008,” my new subscribers often share.

“Now tell me which of these dividends will survive a bear market like that. I want to buy only the safest yields,” they continue.

Fortunately I’m no stranger to dividends that thrive in bear markets. We fittingly launched the Contrarian Income Report months before the market’s tantrum in 2016. The S&P 500 promptly dropped 10% as a welcome present!

It was no problem for our strong dividends, however. In fact, subscribers who focused on their own holdings rather than the financial news likely have missed the broader carnage altogether.… Read more

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How to Collect a “Yield-Curve-Proof” $6,166.67 in Monthly Income

The yield curve is now “inverted.” This warning has preceded “seven of four” recent bear markets (more on this in a moment). Time to be safe and sell everything?

Before we stash cash in the mattress, let’s review the actual facts. Fundamental Capital’s Troy Bombardia, one of my favorite historical finance quants, has run the numbers on what happens to the S&P 500 when the 10-year “long” yield dives below the three-month rate:

  • In 1966, 1973, 2000 and 2006, an inverted yield curve indeed preceded a big stock market pullback (usually by a year or two).
  • Meanwhile in 1978, 1980 and 1989 it didn’t mean much.

… Read more

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I’ve Kept My 2 Top Dividend Stock Tips Secret—Until Now

Let’s face it: this frothy market has made it much tougher to uncover the big, cheap dividends you need to fill out your retirement portfolio. So today we’re going to fight back with my top 2 “off-the-record” strategies for honing in on 7.4%+ dividends that still have a lot of upside ahead.

First, to get a sense of the vice the rebound has locked income investors in, check out this chart:

Stock Bounce Crushes Yields

That amounts to an 18% bounce since Christmas Eve, which has sliced 15% off the S&P 500’s dividend yield (because yields fall as prices rise). As I write, the average S&P 500 name dribbles out a 1.9% payout—less than inflation!… Read more

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Rally Got You Nervous? 3 Mutual Funds Paying Up to 8.6%

If you’re worried that stocks are expensive again, well, they are. The current bull market is making a run at history. But it’s also costly to stay in cash (and lock in zero income). Fortunately, it’s possible to buy some downside protection with yield.

I understand the “I’m worried so I’m sitting in cash” concern. And I know many investors who continue to sit on their money and hope for a big pullback. But wouldn’t it be nicer to bank 32% total returns with 8%, 9% or even 10% or more of it coming as dividends?

Our Contrarian Income Report subscribers who smartly stayed with Omega Healthcare Investors (OHI) – a big paying REIT – have done much better than their scared cash hoarder friends, as well as the broader market in general.… Read more

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My Personal 5-Step Plan for 6%+ Dividends in REITs

If you’re hunting for income, your job just got a lot tougher, and it’s all the Federal Reserve’s fault! Fed Chair Jerome Powell’s recent cave-in on rate hikes means the central bank is out of action for the rest of 2019—and its next move could even be a cut.

Sure, this has been great for stock prices, which surged 8% since the new year. But it’s crushed dividend yields, leaving you with far fewer buys to get the 6%+ yields you need to retire on dividends alone.

Look at how this past month’s price gain has compressed the average S&P 500 stock’s yield from a pathetic 2.1% to a very pathetic 1.9%!… Read more

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