This “Apocalyptic” News Is Our Shot at Cheap 7%+ Dividends

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It’s starting again—the media has its hooks into a new story to scare investors, in yet another effort to gain attention.

The upshot is that we’ve now got a very nice opportunity to pick up a special kind of closed-end fund (CEF) that yields 7%+ and does something unusual to limit downside.

This setup reminds me just a bit of 2022, when buying fear gave contrarians bargains, and historically high dividend yields, too.

The Media-Driven “Crisis” That Doesn’t Exist

Let’s start to trace out our opportunity here by first talking about the media, which I probably don’t have to tell you is more interested in getting an emotional reaction (mainly fear and worry) out of its audience more than anything else these days.… Read more

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I don’t always buy into stock bubbles. But when I do, I prefer dividend plays.

We can’t spell “mania” without AI, of course. Artificial intelligence has been the flavor of 2023. But what if—what if—the excitement around AI accelerates into 2024?

It could happen. Last week I spent half of a recent post-holiday-light-viewing dinner discussing AI with a friend. My buddy is increasingly looking to AI tools like ChatGPT and Bard to help run his services business. After all, why not—they are improving by the week and cheaper than humans. There is some steak behind the AI sizzle.

(What did we spend the other half of dinner doing?… Read more

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I staggered out of my Uber into a sea of orange. My next challenge—a monolithic 100,119-seat stadium—loomed in the distance.

Ever regret something instantly? That was me. Dumb decision. Zero chance your dividend guy could make it in and out of that sports palace.

Fortunately, as if sent from above, my new hype man walked by.

“That’s dedication!” An orange-clad Texas Longhorn fan and fellow father pointed at my CAM walker boot. Which, of course, housed my relatively newly-reconnected Achilles. Which was quickly appreciated outside Darrell K Royal Texas Memorial Stadium.

“Hardcore, man,” my new BFF reiterated. “I respect that.”

I tapped my chest and pointed back at him.… Read more

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This entire market meltdown has been based off of a flawed premise. We income investors must take advantage of it, before sanity returns to the markets.

The 10-year Treasury yield soared above 5%. On its journey to the stars the higher 10-year has clipped equities severely along the way. A high benchmark rate upsets every applecart in finance.

But here’s the thing. This is not a sustainable move.

Inflation isn’t really in a spiral higher. In fact, it’s the opposite. Core PCE (personal consumer expenditures)—the Federal Reserve’s preferred measure of inflation—is dropping like a rock:

Fed’s Preferred Inflation Measure is Dropping Fast

Note, this excludes food and energy prices.… Read more

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Do not miss these huge dividend yields we’re seeing today. In a year or two, you’re going to kick yourself for not locking these income streams in.

Take it from me. This bond guy nearly missed the great home refi opportunity of 2020-21. Fortunately, I managed to wake up and lock in a 2%+ mortgage before rates skyrocketed. Today, 30-year mortgage rates sit at 8%. Eight percent!

I mention that only because we have a similar setup in dividends today. In a moment, we’re going to discuss an elite dividend paying 8.5%. Let’s not miss it!

From Mortgage Refis to “Dividend Refis”

Here’s the upshot: the same trend that delivered that sweet refi opportunity three years ago is driving our dividend opportunity today—just in reverse.… Read more

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One of the most difficult things for me in 2022 was that, with all the doom and gloom in the air, I heard about a lot of people giving up on the dream of financial independence.

The worst part was that they were doing so at exactly the wrong time—right when the market decline had driven the yields on our favorite closed-end funds (CEFs) way up. Even now, after the S&P 500 has posted roughly 15% gains in 2023, as of this writing, plenty of CEFs yield 10%+, including nine in the portfolio of our CEF Insider service.

Worse, these folks were doing it because they’d bought into the media’s false narrative that a recession was looming, a trap I regularly warned about falling into here on Contrarian Outlook and in the pages of CEF Insider.Read more

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One of the most accurate indicators out there is telling us a recession is ahead. And—odd as it sounds—that warning is bringing us a chance to buy a 6.9%-paying fund with two key advantages:

  1. This fund—a closed-end fund (CEF), to be precise, generates extra income when the bull takes a breather, making its 6.9% payout even safer, and …
  2. It’s cheap, in relative terms, and will likely be in higher demand as a recession nears.

That fund, the Nuveen NASDAQ 100 Dynamic Overwrite Fund (QQQX) is at the center of our strategy today because of something that sounds obscure but should be on every investor’s radar: the yield spread between 3-month and 10-year Treasury notes is negative—meaning the yield on the 3-month is higher than that of the 10-year.… Read more

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There’s a lot of rhetoric flying around about the debt ceiling these days, and it’s set up a very nice opportunity for us to buy a 7%-yielding closed-end fund (CEF) we always have on our watch list.

That would be the Nuveen Nasdaq 100 Dynamic Overwrite Fund (QQQX). 

A good way to think of QQQX is like a NASDAQ index fund but with higher dividends and a smart way to turn volatility into extra dividend cash. I say QQQX is like a NASDAQ index fund because its holdings mirror those of the Invesco QQQ Trust (QQQ), including all the big-cap techs we all know well:

Source: Nuveen

QQQX, like QQQ, tracks the NASDAQ 100, so it’s no surprise that you’ll see great tech firms in its portfolio.… Read more

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If there’s one thing we can be thankful for when it comes to the banking crisis, it’s this: at least it means fewer headlines about Fed rate hikes!

That’s actually a good thing for us, because, as the Fed statement hinted on Wednesday, the Fed is getting set to finally pivot. It’s the moment everyone has been waiting for all along! And it feels like almost no one is paying attention.

But we contrarian dividend investors are. And there are a couple of closed-end funds (CEFs) out there that are well-positioned to profit from the Fed’s quiet shift: the Nuveen S&P 500 Dynamic Overwrite Fund (SPXX) and the Nuveen Nasdaq 100 Dynamic Overwrite Fund (QQQX), which yield 7.8% and 7.3% respectively.… Read more

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There is another.


The Jedi Master had last week’s 8.4% dividend in mind, no doubt. David Friar’s Nuveen Nasdaq 100 Dynamic Overwrite Fund (QQQX) is an elite 8%+ payer worthy of a discussion.

But yes, Yoda, there is another. A rival ETF, also based on “the Qs”—the Nasdaq 100. The Force must be strong with this one—it yields 12.7%.

Is this for real? Or a Hollywood fairy-tale?

Well, let’s go back to David, QQQX’s manager. His elite 8%+ yield is no joke either. He’s doing something that many of us have dabbled with. He buys tech stocks and sells (“writes”) covered calls on his positions.… Read more

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