Revealed: My 5-Point System for Scoring Safe 7%+ Dividends and 40% Gains

The Contrary Investing Report

Investing and Trading News, with a Contrarian, Sarcastic Twist!

With over 500 closed-end funds (CEFs) on the market, how do you choose the best one?

It’s not an easy question to answer, because there are literally dozens of metrics any CEF investor should look at before buying.

Luckily, I’ve found a way to boil those down for you. In a moment, I’ll reveal the 5-point system I’ve carefully designed to pick winning CEFs for our CEF Insider service.

(If you joined me for my exclusive CEF Insider live webcast on October 25, you know about this proven system and you got 2 of my latest CEF investment ideas for 7.1% dividends and double-digit upside in 2018.…
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Today, the 10-year Treasury pays just 2.3%. Put a million bucks in T-Bills, and you’re banking $23,000 per year. Barely above poverty levels!

Hence the appeal of closed-end funds (CEFs), which often pay 8% or better. That’s the difference between a paltry minimum-wage income of $23,000 on a million saved, or a respectable $80,000 annually.

And if you’re smart about your CEF purchases, you can even buy them at discounts and snare some price upside to boot!

Unfortunately this rising rate environment has income seekers scared of CEFs. Many of my readers have asked me if they should bail on our high paying vehicles.…
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At CEF Insider, we regularly pound the table on top-notch US closed-end funds (CEFs).

And we still see America as our “go to” for huge yields, income and big gains. But if you take a pass on other parts of the world, you’ll miss a proven way to cut your risk (thanks to the tremendous variety in the global economy) and big upside too.

That’s why we constantly keep our eyes trained on the horizon. And today, one particular place has caught our attention: Asia.

For a long time, Asian stocks were a sucker’s bet, for a couple reasons.

The biggest?…
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If I’ve heard it once I’ve heard it a thousand times: if you want big dividends, you can forget about getting big price upside, too.

Clearly, whoever came up with this “wisdom” is clueless about closed-end funds, where hefty 7%+ yields are common. Fast double-digit gains, too—especially if you follow the one true CEF profit indicator I’ll show you now.

It’s called the discount to net asset value (NAV), and you can find it on any online fund screener. In plain English, it’s the difference between a CEF’s market price and its “true” value—or what its underlying assets are worth.

Sounds simple, right?…
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Most investors with $500,000 in their portfolios think they don’t have enough money to retire on.

They do – they just need to do two things with their “buy and hope” portfolios to turn them into $3,279 monthly income streams (or much more):

  1. Sell everything – including the 2%, 3% and even 4% payers that simply don’t yield enough to matter. And,
  2. Buy my 8 favorite monthly dividend payers.

The result? $3,279.69 in monthly income every month (from an average 7.6% annual yield, paid every 30 days). With upside on your initial $500,000 to boot!

And this strategy isn’t capped at $500,000.…
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Remember when I said there were more than 2,400 closed-end funds, mutual funds and ETFs beating the S&P 500?

Well, today we’re going to dive into three of those funds. Unlike many of their cousins, these aren’t one-hit wonders.

All three boast outsized dividend payouts far larger than those of any S&P 500 stock: all the way up to 8.3%!

They also give you instant diversification and world-class management. You can see that in each fund’s stock-picking prowess, which is translating into gains that crush the S&P 500 SPDR ETF (SPY):

Leading the Index by a Mile

So let’s dig deeper to see how these funds tick and what place they might have in your portfolio.…
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Last week, we outlined a smart, sound retirement income strategy funded by dividends alone. Now, let’s talk growth.

We’re already well ahead of the flawed 4% fallacy – the notion that you can (or should) sell some capital every year for retirement income. With our “no withdrawal” technique, we’re already keeping our capital intact – and collecting 8% yields to boot!

Believe it or not, we can do even better with some savvy asset allocation. If you’re not yet as filthy rich as you hoped you’d be by now, don’t worry – we still have plenty of time to get you there.…
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Back in February 2016, I wrote an article titled “4 Reasons to Buy This 9.2% Yielding Equity Fund”. That fund was the AGIC Equity and Convertible Income Fund (NIE).

Since then, NIE has done this:

Almost 50% Gains in a Year and a Half

Oh, and did I mention that NIE pays a 7.4% dividend? That’s right: $100,000 in this fund gives you $616 per month in cash.

Despite the conventional wisdom about dividend yields, that high yield doesn’t come with high risks. Not only has NIE been growing its dividend since 2009, but that income stream is well covered by the fund’s investments—again, thanks to its big returns, as we see in the chart above.…
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I’m going to get straight to brass tacks. Let’s discuss 2 closed-end funds with up to 18% upside in the next 12 months, plus yields up to 5.8%. Both are leading a blockbuster trend almost everyone has missed.

I say “almost” because if you’re a canny contrarian (and if you’re reading this I’m betting you are), you probably know what I’m going to say.

I’m talking about the quiet rebound in actively managed funds (that is, funds with real humans in charge), including CEFs.

So far this year, more than half of active managers are beating their benchmarks. And when human stock pickers take the lead, they keep it, like they did from 2001 to 2011.…
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Today, I’m going to warn you about five stocks with yields of 7% or more that should be avoided at all costs. They are my next “dividend disaster” candidates that are likely to either reduce their payouts, or lose 20% or more in price, or both.

Big current yields have nothing to do with safety. Consider these year-to-date performances from high-yielding companies that started 2017 with juicy yields, but at some point cut or suspended their dividends:

  • Windstream: Yielded 7.5%, lost 75%
  • Mattel: Yielded 5.5%, lost 45%
  • GNC: Yielded 7%, lost 26%

I warned you to sell Mattel late last year, before its dividend cut.…
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