This AI Fund’s 7.3% Payout Looks Tempting (Here’s Why We’re Out)

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This AI Fund’s 7.3% Payout Looks Tempting (Here’s Why We’re Out)

There’s a 7.3%-paying fund out there that looks like the perfect buy—7.3% yield, growing payout and special dividends. Yet, if you hold this one, I urge you to sell yesterday.

It’s a dilemma we’ve all faced: There’s a stock or fund we’re aching to buy—but there are just one or two things holding us back. That’s certainly the case here. In fact, at pretty well any other time, we’d fall all over ourselves to buy this dominating tech play. At my CEF Insider service, we’ve done just that in the past.

But not today. Today we’re putting this one on the shelf—and I urge you to do the same.… Read more

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This 8% Dividend Is AI’s “Secret” Winner

Can we still call ourselves contrarians if we buy into “mainstream” trends like the stunning growth of AI? Of course we can.

Today we’re going to do just that. But of course we’re not picking up obvious names like NVIDIA (NVDA). Instead we’re looking to an 8%-paying fund I see having even more upside than the “go-to” AI stocks everyone else is buying.

For Profitable Contrarian Investing, Think “Oblique,” Not “Direct”

The technique we’re going to use here is a very underappreciated concept called “oblique investing.”

Sounds a bit dry, I know, but it’s anything but. The idea here is, roughly speaking, to invest in big forces driving the market and shifting the economy over the foreseeable future.… Read more

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You Ask, I Answer: Are These 8% Dividends Too Pricey?

I recently got some reader feedback that made me realize something: When it comes to our favorite income investments—8%+ yielding closed-end funds (CEFs)—there are still a lot of misconceptions out there.

It’s key that we put those right, because they’re causing some investors to miss out on CEFs, and the big (and often monthly) dividends they provide. And I know I don’t have to tell you that in turbulent times like these, high payouts like those are a lifesaver.

This reader wrote in response to a recent piece I wrote about how CEFs can be better than ETFs, pointing out two things:

  1. The three CEFs I mentioned in the piece have higher expense ratios than passive funds.

… Read more

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These 6.8% Dividends Are Quietly Minting Millionaires

If you’re like most income investors, you’re on the hunt for stocks and funds that can stand up to a storm these days.

So that’s what I’m going to give you below—in the form of three “all-weather” closed-end funds (CEFs) kicking out an outsized 6.8% average yield.

They’ve stood firm through every headwind imaginable—wars, pandemics, inflation, you name it—and have done nothing but profit over the long haul. Through all that, this trio has kicked out annualized total returns (with dividends reinvested) of 15%+ each.

“Shock-Proofing” Your Portfolio, Crushing ETFs

These funds’ stellar returns come from both the sector they focus on—tech—and smart management that’s kept all three going strong.… Read more

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The Coming “Collapse” of AI (and a 9.1% Dividend to Cash In)

You probably remember the first time you heard about ChatGPT. The AI tool’s lifelike responses seemed like magic—so much so that people were debating whether generative AI tools like it were actually conscious.

Such a debate was honestly a bit silly, and it didn’t last long. But the idea that these large-language models were sentient proved how much AI can emotionally influence people.

Fast-forward to today and that response is much less starry-eyed. You’ve no doubt run across AI-created content and art on the Internet that is, frankly, terrible (not to mention glaringly obvious). That’s prompted outlets like The Wall Street Journal to tell us “The AI revolution is already losing steam” and compare the industry to the “biggest crashes of the first dot-com bubble.”… Read more

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This Ticker Turns Nvidia Into a 9.2% Dividend Payer

Stock market rallies climb walls of worry. Well, we have no shortage of such worries today!

A few days ago, Bloomberg lamented there was “no relief in sight for bonds”. This was ironic because relief—the catalyst for the next big bond rally—is hidden in plain sight. Despite the despair, 10-year Treasury rates are still a ways off from their recent 5% highs last October:

Reality Check: Rates Still Lower Than Last Year

If they put in a “lower high”—as I’m expecting they will, thanks to a slowing economy and labor market—it will be wildly bullish for bonds (which trade inverse rates.)… Read more

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My Outlook for Tech Stocks (and One 6.2%-Paying Fund) in 2024

The first week of 2024 was a rough one for stocks—and that, oddly enough, suggests we might see a good year for stocks in 2024.

But as we’ll discuss below, recent market moves also suggest some parts of the technology sector are starting to look just a little overbought now—especially one 6.2%-yielding tech-focused closed-end fund (CEF).

I know that’s a lot to lead off with, so let’s break it down.

A week and a half before Christmas, and before last year’s Santa Claus rally, I wrote that we didn’t want a Santa Claus rally to end ’23. That’s because these year-end market bounces have historically led to the following year to be weaker for the markets.… Read more

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“Soft Landing” Ahead? I Think So. Here Are the 6.8%+ Dividends to Buy

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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This AI-Powered Dividend Yields 10% (and Pays Monthly)

Few folks know it, but there’s a way to tap the surging AI trend for a growing 10% dividend. Better still, this monster “AI-powered payout” comes our way monthly.

That’s a far sight better than what most folks are doing these days: focusing on a handful of dividend paying blue chip tech stocks like Microsoft (MSFT).

There’s nothing wrong with Microsoft, of course. But it does yield just 0.8%, or about half what the typical S&P 500 stock pays. It makes up for some of that with a dividend that’s growing like a weed—up just shy of 200% in the last decade—but what if you want a decent yield now?… Read more

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This 11% Payout Is the Perfect Way to “Go on Offense” in ’23

Today’s market is ideal for us to grab stock-focused closed-end funds (CEFs) paying outsized 10%+ dividends. Here are three (of many!) reasons why:

  • CEFs’ dividend yields are through the roof: As I just mentioned, many equity CEFs pay double-digit yields today. And as members of my CEF Insider service know, most of these sturdy income plays pay dividends monthly.
  • Deep discounts are everywhere: Of the 447 or so CEFs out there, the average fund trades at a 9.6% discount to net asset value (NAV). That’s near levels we saw in the darkest days of the pandemic! It’s totally overdone, which is why …
  • Equity-CEF discounts have upward momentum.

… Read more

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