This 7% (Monthly) Dividend, With Upside, Is “2020-Proof”

Our Archive

Search completed

Tech has taken a punch in the face this past few weeks—prompting many readers to wonder if it’s time to sell after booking some big gains in the sector this year.

No way. We’re dividend investors first and contrarians second, so we’re going to take the other side of that bet and buy this tech “mini-dip.” We’ll do it with closed-end funds (CEFs) yielding 7% (and more) that also give us a unique “double discount” to hedge any downside we might see in the coming months (this is 2020, after all) and a good shot at outperforming tech and the broader market, too.… Read more

Read More

Sometimes, picking the best contrarian stocks can be fairly straightforward.

For instance, back in early spring, it seemed obvious to anyone who went a bit deeper than the daily headlines to see that the market wasn’t giving tech stocks their due, given its importance during the lockdown and its potential for big post–COVID-19 growth.

So in April I wrote an article that highlighted the Columbia Seligman Premium Tech Fund (STK), a closed-end fund (CEF) primed to benefit from surging online shopping, rising mobile data use and the fast shift toward working from home. Plus, STK yielded an outsized 9.4%, so you were getting a large part of your profits in dividend cash.… Read more

Read More

It really is possible to find stocks that grow your money 15%+ a year forever—even in the middle of a pandemic.

Better still, these “unicorns” are a cinch to find. We only need to look for one thing: a dividend that’s growing—and ideally accelerating.

I know that sounds like a tall order, with S&P 500 payouts plunging $42.5 billion in the second quarter. But that figure masks the fact that many companies are still hiking their payouts—and will continue to, even if this crisis drags on longer than we expect.

Dividend Growth = Share-Price Growth

Of course, it’s not good enough to simply pick a few stocks with fast payout growth and call it a day.… Read more

Read More

If you’re like most people, you’re wondering how in the world the market can be doing this when the country has been on lockdown for the better part of two months:

Stocks Soaring

As you can see above, stocks spiked 22% since late March, going by the performance of the Vanguard Total Stock Market ETF (VTI). Meantime, the economy is a shadow of its former self: the Federal Reserve expects it to shrink 40% in the second quarter—worse than the 23% drop seen at the depths of the Great Depression.

Before you ask, no, this disconnect isn’t a recipe for another crash.… Read more

Read More

Mainstream financial channels have made a big deal out of the current relief rally (“Is it a ‘V-shaped’ recovery?” they comically muse). Whether it’s a V, W,  L, Nike swoosh or (my favorite) bathtub, the fact is that most stocks are still down on the mat.

(This is no surprise. The average bear market lasts 12 to 18 months. We are just beginning month three—yikes.)

The well-known S&P 500 always leads the headlines. Five hundred of America’s blue-chip firms, sounds like a pretty good sample size, no?

In 2020… no. The index is weighted by market cap, giving favor to Microsoft (MSFT), Apple (AAPL) and Amazon (AMZN)—its top three holdings—which have outperformed the market by a wide margin recently.… Read more

Read More

Today, I’m going to show you how to find fat dividend opportunities in washed-out sectors. Let’s start with retail, where the hits just keep coming. (And the result is a few sky-high yields. Too good to be true? Let’s explore.)

You know the story by now. Amazon.com (AMZN) pioneered e-commerce, taking it from an interesting tech niche to the retail-reaper it is today. The numbers tell it all, as Statista estimates retail e-commerce sales will nearly double between 2018 and 2024.

Yes, the overall retail pie is growing, but not nearly as fast as e-commerce is. In other words, e-commerce is increasingly gnawing on brick-and-mortar’s lunch.… Read more

Read More

When it comes to protecting—and growing—your dividends (and portfolio) in these trying times, there are two sectors you should watch like a hawk: technology and energy.

Both are standouts in this crisis, but in completely different ways. Energy, for example, is a big reason why the second-quarter earnings outlook for the S&P 500 looks so grim:

Take a look at the chart below and you’ll see that energy is by far the biggest loser. Along with a few other industries, it offsets other areas where profits are forecast, such as tech, utilities and healthcare—all three of which are also great spots to shop for big dividends now.… Read more

Read More

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

Read More

If you flip on the financial news this Friday, or click over to your favorite stock website, you’re going to see headlines about retail stocks. After all, they can’t have a Black Friday without weighing in on immediate winners and losers!

In recent years, the retail sector has produced many more losers than winners. Amazon (AMZN) is blamed as the brick-and-mortar-killer, taking down not only unimaginative retailers but also the landlords that rent to them.

The carnage even extends to shopping center rentiers like Macerich (MAC). It promises a 10.2% yield, but this inflated payout is due to a stock that split “the wrong way”—halving in price without the increase in sales!… Read more

Read More

Here’s the funny thing about the inverted-yield-curve talk we’re getting hit with lately: most people are looking at the wrong numbers!

I’m going to show you how we savvy dividend investors can jump on this mistake to bag total returns of 69% and up—fast. First, here’s what I mean when I say investors are looking at the wrong numbers.

These days, all we hear about is the yield-curve inversion we’ve seen a couple times over the last few weeks, where the yield on the 10-year Treasury note fell below that of the 2-year.

It’s certainly worth paying attention to, because the inversion of the 10- and 2-year Treasury yields does predict recessions—though the timeline tends to be around 18 months and maybe even longer than that.… Read more

Read More

Categories