Toss the Spreadsheet! Here’s How to Manage Your Dividends Like a Boss

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Three weeks into 2024 and here’s the state of play: rates have fallen and likely headed lower. That’s going to light a fire under our favorite dividend payers.

It already has!

Think back three months, to mid-October. Back then, 10-year Treasury yields sat at just under 5%. Now they sit at 4.1%—a 19% drop! It’s been great for our dividend payers, as income-hungry folks start to look for other options.

That shift has just started, and it’s got plenty more room to run.

Consider the 8.5%-paying Cohen & Steers Infrastructure Fund (UTF), a closed-end fund (CEF) that’s a classic dividend play, holding shares of “recession-resistant” utilities like NextEra Energy (NEE) and Southern Company (SO).… Read more

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If there’s one thing we need to remember when we buy high-yield closed-end funds (CEFs), it’s this: always demand a discount.

Well, make that two: always demand a high dividend, too! Because CEFs are renowned for their high—and often monthly—payouts, with the average CEF yielding around 8% today.

But back to discounts. Luckily for us, they’re common with CEFs: of the 422 CEFs tracked by the CEF Connect screener, 384 trade at discounts to net asset value (NAV).

That’s a great place to start our search for top-notch CEFs, because these discounts are basically free money: they let us pick up, say, Mastercard (MA) for 85 cents on the dollar through a CEF like the Gabelli Dividend & Income Trust (GDV).Read more

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Were you able to refi your home when rates were low? I hope so.

Don’t tell my wife, but we almost missed the low-rate era. My better half kept asking about refinancing. “Yeah, yeah,” I said. “We will when rates bottom.”

In early 2021, they took off right under my nose. I stare at the bond market all day and nearly missed this thing!

Fortunately, we got a pullback in rates. I called my buddy, a mortgage broker, who dialed me in with a sweet 2.2% rate on our remaining balance. Two point two!

Had we missed that deal, I’d never live it down.… Read more

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If there’s one thing we need to remember when we buy high-yield closed-end funds (CEFs), it’s this: always demand a discount.

Well, make that two: always demand a high dividend! Because CEFs are renowned for their high—and often monthly—payouts, with the average CEF yielding around 8% today.

But back to discounts. Luckily for us, they’re common in the CEF world: of the 433 CEFs tracked by the CEF Connect screener, some 390 trade at discounts to net asset value (NAV).

These discounts are basically free money because they let us pick up, say, Mastercard (MA) for 83 cents on the dollar through a CEF like the Gabelli Dividend & Income Trust (GDV).Read more

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Let’s talk about legitimate financial engineering today. An easy, real and (honestly) no-brainer move to boost a timid 2.5% yield into an 8.4% dividend.

Just type this ticker, not that ticker, and we’ve got it. An 8.4% dividend. Pay up, Wall Street—and give us a 5% discount to boot!

The Wolf of Wall Street would term this type of move fugayzi. Slang for BS. The suits ripping off the little guy.

This reverse fugayzi is our revenge. The wolves are scavenging for this 2.5% yield. We’ll buy the same stock, at a discount, and boost our dividend to an elite 8.4%.… Read more

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I’m hearing from a lot of CEF Insider members who are worried about inflation these days, and there’s a good reason why: consumer prices raced up 6.2% in October from a year ago!

The good news is that we’ve got an easy setup that lets us work inflation fears to our advantage, grabbing ourselves bigger dividends, and bigger price upside, as we do. All we have to do is buy stock-focused closed-end funds (CEFs) on dips when inflation reports come out.

(Below we’ll discuss two CEFs you can target on these dips. They’re built to protect your portfolio—and your dividends!—if inflation proves more than transitory.… Read more

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By now I’m guessing you’ve heard of the FIRE movement—you may even know someone who’s following this “extreme” form of retirement saving.

An acronym for “financial independence, retire early,” FIRE advocates look to retire earlier than the traditional age of 65—and I mean way earlier. Some even clock out in their 30s!

They do it by building up a huge cash hoard over a period of years, then making steady withdrawals (with some going by the flawed 4%-withdrawal rule) to sustain themselves. Some keep working during their “retirement”; others clock out entirely.

I was thinking of the FIRE folks this week and wondering how they’d fare if they tapped into the wealth- (and income-) generating power of closed-end funds (CEFs), which boast monster yields, sometimes north of 10%.… Read more

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We individual investors have many edges on the Wall Street suits. Betting on the next government handout, however, is not one of them.

Megatrends, on the other hand, are our wheelhouse. Professionals excel at “looking ahead” three to six months. Fortunately for us, their eyes glaze over beyond a year! This is where you and I can regain our advantage when it comes to infrastructure income investing.

While Wall Street weighs the trees, we will consider dividends from the broader megatrend forest. Let’s highlight some aspects of the potential American Jobs Plan that also happen to be infrastructure trends already in motion.… Read more

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Thank you to our 1,578 Contrarian Income Report subscribers who attended our Q1 webcast a couple of weeks back!

We have you, our thoughtful reader and income investor, to thank for the inspiration behind the firehose. We received 114 questions during our one-hour call, plus several more beforehand. Amazing.

As promised, I have read each and every question (as has our excellent customer service team). Last week, we chatted about CEFs. Let’s tackle some dividend stock questions today.

Q: I love your overall dividend approach. I have some cash on the sideline expecting a correction. Any thoughts on the timing and percentage dip of that correction?Read more

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What are we dividend investors to expect in 2021? Let’s look to Washington, DC, where the switch on Jay Powell’s printing press is stuck in “high”:

Money Supply Surges—With No End in Sight

With Powell’s fiat money keeping (what’s left of) the Main Street economy afloat, you can bet that his “instant” cash will keep rolling in. He’ll have a willing partner in incoming Treasury Secretary Janet Yellen, who followed the same strategy when she was Fed chair:

New Boss Same as the Old Boss

This is a recipe for inflation once the economy gets back on its feet. Back in September, we discussed some stocks that make solid inflation hedges by hiking their dividends faster than prices (and inevitably, interest rates) rise.… Read more

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