3 Ways to Cash in on Rising Rates (and Collect 7.4% Dividends)

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It’s a question I get from investors all the time (including subscribers to my CEF Insider service): how should I invest when interest rates rise?

Because fear of rising rates is common among investors, there’s a hidden trap here: if you react to this worry, you will lose money. Instead, you need a second-level understanding of rates so you can bet against this fear and make money. (I’ll also give you 3 great buys that let you quickly and easily pull this off below.)

What Most People Get Wrong About Rising Rates

Here’s the common thinking on rates: as they head up, rising yields on US Treasuries will make these investments more attractive than large-cap US dividend stocks.… Read more

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We’ve seen a lot of volatility and fear in 2018, and that’s handed us a great buying opportunity—particularly in the 5 unloved funds I’ll show you below.

Make no mistake: each of these 5 despised funds is poised for serious upside before 2018 is out … and they’ll pay us 8.2% average dividends, to boot. That’s enough to hand you $3,400 a month on a $500k nest egg! Before we get to them, let’s take a look back at the year so far and see what’s handed us this terrific opportunity.

History Is Set to Repeat

If you bought closed-end funds (CEFs) back in early March, when the market tanked and I urged investors to buy, you’d be enjoying a nice double-digit total return in just 6 months:

Hated CEFs Turn the Corner

Why did these 3 funds—the Reaves Utility Income Fund (UTG), the Cohen & Steers Infrastructure Fund (UTF) and the DNP Select Income Fund (DNP)—all of which I recommended back on March 1—soar?… Read more

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One of the most reliable income-producing sectors has been hit hard over the past year, handing you a terrific shot at outsized dividend yields running all the way up to 10%.

In a moment, I’ll show you two funds that let you grab these huge income streams at a big discount—and one that looks like a strong buy but is way overpriced and headed for a fall. You’ll want to keep that one as far away from your portfolio as possible.

The sector all three of these picks come from is utilities—one of only two sectors of the S&P 500 that’s down over the past year (the other being consumer staples), with a 2.6% overall decline.…
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If you want high dividends right now (and who doesn’t?), but you don’t want to overpay, there’s one place you need to look: utilities.

There are three ways to tap into this sector, but only one hands you the most upside and fattest dividend yields from these unloved cash-spinning companies:

  1. Buy utility stocks individually
  2. Buy ETFs specializing in utilities
  3. Buy closed-end funds (CEFs) specializing in utilities

The third option is the best one. To understand why, we need to go back a few months.

Back on March 1, I recommended Reaves Utility Income (UTG), a utility CEF that yields 6.9% (spoiler: those big yields are common with CEFs and are a big reason why these funds are an awesome bet for income investors).…
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Remember early February’s stock-market rout?

I know. Seems like a weird question. It was just a few weeks ago, after all. But many folks seem to have forgotten how stocks fell 10% from their 2018 high in a matter of days:

Amnesia Sets In

As you can see, the benchmark SPDR S&P 500 ETF (SPY) is already recovering, and stocks are now up 3.3% for 2018. That’s still well below the 8% climb we saw in January alone, but it’s a solid return, and it means more (formerly) skittish folks will likely trickle their cash into stocks, keeping the market buoyant.…
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If there’s one thing I love, it’s picking up on a “sleeper” income opportunity that first-level investors have walked right past.

And today I’m going to show you not one but three. And one of these stealth buys yields a safe, stable 9.5%.

So a $100,000 investment in this unloved fund would hand you a nice $9,500 in 2018, or a steady $2,375 when its dividends drop into your account every quarter.

I’ll have more to say about these 3 funds—all of which are managed by a real, live human—shortly, including why they’re a better way to go than a “dumb” index fund.…
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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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