Why These 8%+ Yielding Funds Crush Low-Fee Index Funds (Every Time)

Our Archive

Search completed

Why These 8%+ Yielding Funds Crush Low-Fee Index Funds (Every Time)

If you always wanted a free lunch but thought they don’t exist, well, they kind of do, in the form of the Fidelity group of ZERO index funds, like the Fidelity ZERO Total Market Index Fund (FZROX).

After all, its 0% fees mean it should easily beat a closed-end fund (CEF) with a high expense ratio, right? Well, not so fast.

0% Fees Do Not Equal Outperformance

FZROX—in purple above—may levy no management fee, but it’s underperformed many equity CEFs over a long period. Since inception, it’s trailed the Adams Diversified Equity Fund (ADX), in blue, and the General American Investors Co.… Read more

Read More

Ignore This Stupid Investing Rule (Look to These 3 Reliable Dividends Instead)

I hate to see investors get snared by so-called “rules of thumb” like the 4% rule (which we’ve debunked here on Contrarian Outlook many times before).

The trouble is, these rules only “work” until they don’t. And blindly following them through an unexpected market turn could lead you to investment losses, or to run out of money in retirement.

Heck, some don’t even have a germ of truth to them, like the “100 minus your age” rule, which says you should subtract your age from 100, and that’s how much of your portfolio you should dedicate to stocks. So if you’re 30 years old, 70% should go into stocks and 30% into bonds.… Read more

Read More

Buy This 7.2% Dividend, Save $1 Million Less for Retirement (Ticker Below)

Does the name William Bengen ring a bell? If not, don’t worry. Many people haven’t heard of him. But he’s likely to have a major influence on your financial situation (if he hasn’t already).

Bengen is the (now retired) financial advisor who came up with the so-called “4% rule,” which is seductive due to its simplicity: it says you can safely withdraw up to 4% of your assets in retirement without having to worry about running out of money.

Obviously, such a vague rule has critics, with most of them suggesting 4% is too lenient. Most of these folks are financial advisors who take fees to manage people’s money, so they definitely have an incentive to keep their clients working and investing!… Read more

Read More

Our CEF Playbook for the Rest of 2023 for 6%+ Dividends

Here’s some great news as we head into the summer market doldrums: we’ve got a terrific setup to buy, with stocks rallying, economic data strong—and the S&P 500 (and many high-yielding closed end funds) still cheap.

These bargains exist because of the media’s constant bleating about a recession. But that, of course, has been completely wrong—and I expect it will continue to be.

The key takeaway is that our buying opportunity in CEFs is as strong as it’s been since this rally started in January—which is why five of the six CEFs in the equity section of our CEF Insider portfolio, which boasts an 8.8% average yield as I write this, are buys.… Read more

Read More

This Sneaky-Smart Retirement Play Pays 9.5% a Year (and Grows Your Nest Egg)

TV personality Suze Orman has bad news for anyone hoping to escape the rat race: they’ll probably have to wait until they’re over 70.

In a recent interview, the host of the Suze Orman Show splashed cold water on the idea that anyone can enjoy their golden years without clocking in at the office. “Stop this ‘Oh, I’m going to retire at 60. I’m going to start claiming Social Security at 62!’” she proclaimed to viewers.

The reason Orman is adamant most people don’t have enough money to retire, and won’t until they’ve hit 70? She says the 4% rule—a cornerstone of retirement planning for decades—is “dangerous,” and no one should “be using the 4% rule on any level.”… Read more

Read More

From the Depression to Disco: These “Old-Timer” 8% Dividends Have Seen It All

Let’s face it: yields on Treasuries and “regular” stocks are still pathetic! We need much bigger payouts (I’m talking yields of 7%+ here) to fund our lifestyles in these inflation-weary times.

Trouble is, most of us have been conditioned by the media and Wall Street to believe that all yields that big are dangerous. Nothing could be further from the truth!

Case in point: my favorite high-yield vehicles, closed-end funds (CEFs), which hold all the assets most folks own, like blue chip stocks, corporate bonds and real estate investment trusts (REITs). Except when we buy these assets through CEFs, we get much higher yields than we would if we bought “direct.”… Read more

Read More

Don’t Let This “Fake News” Keep You From Safe 8%+ Dividends

With yields north of 7%, closed-end funds (CEFs) should be a staple of every American’s portfolio. Especially when you consider that the vast majority of these funds pay dividends every single month.

But the truth is, CEFs remain a niche product—only folks have taken the time to try them out realize what incredible income generators they are. (This is why I started my CEF Insider service: to bust the myths around CEFs and give members a selection of diversified funds they can use to build a retirement-changing income stream.)

Why are CEFs still off most people’s radar? Mainly due to the financial press and financial advisors, both of which have preached for decades that any yield of 7%, 9%, 10% or higher is unsustainable.… Read more

Read More

This 8%-Payer Crushes ETFs (and We Get to Buy for 84 Cents on the Dollar)

On the surface, investing through an index fund sounds great. It’s simple, cheap and, as you’ve likely heard over and over, few active managers beat their benchmarks anyway.

But we closed-end fund (CEF) investors know better. Truth is, there are lots of CEFs out there that beat their benchmarks while throwing off healthy dividends north of 8%.

And when you step beyond the world of stocks, into areas like corporate bonds, REITs and municipal bonds, benchmark-beaters are the norm with CEFs. That’s because those markets, which are much smaller than the stock market, give a savvy manager lots of advantages—like a well-stacked contact book—that a “robotic” index fund just can’t match.… Read more

Read More

These 3 “Dividend Dreams” Boast 268% Payout Growth, 12% Yields

Don’t lament the lack of a Santa Claus rally this year, because it comes with a bright silver lining: we dividend investors have more time to pick up big yields on the cheap.

Here’s why: America’s economy is still growing, with analysts booking forecasts for 3.7% earnings growth in the fourth quarter of 2022. What’s more, sales for S&P 500 companies are up 10%, and earnings have been rising all year.

Yet the market is still downbeat.

In other words, share prices are divorced from reality, and it’s only a matter of time before they correct. However, given the year we’ve had, it could still be a while before investors develop an appetite for stocks again.… Read more

Read More

CEF Investors: Here’s How to Navigate the Selloff (With 8%+ Dividends)

This selloff has gone on seemingly forever, and I’m hearing from more investors who are feeling nervous.

I understand completely. Days of red on the indexes are tough on all of us, myself first and foremost. But the key thing to keep in mind as the world seems to be spinning out of control is that when times like these come along, our CEF strategy proves its worth, for two reasons:

  • Our CEF dividends are helping us through the correction, as they have for all the pullbacks we’ve been through since we launched my CEF Insider service in 2017. Our portfolio yields 8.3% today, and 17 of our 23 holdings pay dividends monthly, so those payouts arrive in line with your bills.

… Read more

Read More

Categories