3 Trade-War Winners for 7% Dividends and Big Upside

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Monday’s major jump in stocks is the beginning of a trend that will catch a lot of investors by surprise: fundamental strength thanks to trade war fears abating.

We aren’t out of the woods yet, as Tuesday showed us. While the market cheered the tentative cease-fire between Xi and Trump on Monday, the lack of details and confusion hit the market on Tuesday.

And that’s a good thing, because it’s set up investors for an opportunity to buy equities cheap before the relief rally around the corner.

Trade Ceasefire Opens Buy Window …

The way I see it, the trade-war ceasefire is likely the beginning of a deal coming down the pipe in the next three months.… Read more

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I’m sure you noticed that when America decided on a Republican-majority Senate and Democrat-majority House, the markets jumped.

The best news: it’s just the beginning of what’s likely to be a long-term uptrend in stocks. So if you sold during the recent market panic, you’re going to miss out on that upswing—that is, unless you buy now.

But what to buy? While the SPDR S&P 500 ETF (SPY) is already up 3.6% since the end of October, it still has gains ahead because of slower investors who haven’t come back into the market  after last month’s panic selling. If you buy now, you might beat a lot of them to the punch.… Read more

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From what I hear from readers these days, a lot of people out there are compulsively clicking the “refresh” button, living in fear of the next 500+-point drop in the Dow.

But is now the time to actually start panicking?

We’re going to dive into that question today. I’ll also reveal 1 fund that protects your nest egg with a unique form of “insurance” while handing you a huge 7.5% cash payout.

More on this lifesaving “pullback-proof” dividend a little further on. First, we need to talk about …

Why the Pundits Are Wrong (Again)

The market wipeout has had one extra element that’s added even more terror: dire warnings from the semiconductor industry, which sent Advanced Micro Devices (AMD), Texas Instruments (TXN) and Nvidia (NVDA) into free-fall and badly beat up the benchmark VanEck Vectors Semiconductor ETF (SMH).Read more

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Something strange is happening in the investment-bank and hedge-fund world: a growing sense that the next recession (which, by the way, Wall Street has long been wrongly predicting for years) finally has a due date: 2020.

The number of Wall Street firms predicting this date is staggering.

Bloomberg’s Joe Wisenthal has collected a few predictions, such as one from Moody’s Analytics chief economist Mark Zandi, who said 2020 will be the economic “inflection point,” and Société Générale’s economic team, who said the likelihood of a 2020 recession has risen due to, among other things, a tight labor market and higher borrowing costs.… Read more

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There are 20 elite closed-end funds (CEFs) that have proven their toughness in the last 10 years (including through the Great Recession, the most brutal test of all) and have still handed investors market-beating returns.

And below we’re going to look at all 20 of them.

So if you’re looking for a proven dividend payer that will hold its own through today’s troubles—trade wars and rising interest rates, to name just two—these 20 funds are a great place to start.

The Toughest of the Tough

Some of these cash machines throw off dividends of 6.8% or more (and one I’ll tell you about in a moment pays a sky-high 12.4%!).…
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Exchange-traded funds (ETFs) can be an easy “one-click way” to diversify your dividends. Instead of grinding on the viability of any single payout stream, why not build a basket of them?

But be careful – some pooled payouts are all bad and don’t even keep up with the broader market. In a minute, we’ll review ten dividend dogs masquerading around under the perceived “diversification safety” that ETFs provide.

Make no mistake, there’s a recent rush to ETFs. The 2016 U.S. Exchange Traded Funds Study by Greenwich Associates shows that institutional investors, including pension funds, are increasingly pouring their money into ETFs, from 18.9% of all ETF assets in 2015 to 21.2% last year. And they’re being driven by a number of factors, such as decreasing risk and adding diversity to their portfolios. …
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In my last article, I showed you funds that pay 6.4%+ yields and give you “crash insurance” in case of a market meltdown. The great thing about these funds is that they also offer tremendous upside in steady or up markets.

If that sounds like the best of both worlds, it’s because it is.

Instead of just buying the S&P 500 in an index fund, for example, you can choose the Nuveen S&P 500 Dynamic Overwrite Total Return Fund (SPXX). It tracks the index, provides extra downside protection and pays out a much higher dividend than index funds, too.

This isn’t the only fund that does this trick. There are dozens more.

In fact, if you’re nervous about the market and want as much safety as you can get while still staying invested, there’s one fund that’s an even better choice than SPXX: …
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The past year has been good for the S&P 500: it’s up about 15.7%, including dividends.

So if you’re simply tracking the index through an exchange traded fund, congrats. That’s a decent gain.

But I’ve got one simple trick—and a far superior fund buy—that can help you do even better … and grab a big chunk of your gain in cash, too.

That trick? Covered calls.

Covered what?

Covered calls are a strategy in which investors buy stocks and sell call options against those stocks.

Think of call options as a kind of insurance; investors buy them if they are short the market and want to protect themselves from blowing up in case the market rallies. If you sell those options to investors, you’re essentially becoming an insurer, giving these gamblers the protection they crave to cover their risky bets. …
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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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