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

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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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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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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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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.

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A wild year like 2020 is a great acid test for closed-end funds (CEFs)—and it can tell us a lot about which of these high-yield plays to pick (and avoid!) as we move deeper into 2021.

A Split Market

If 2020 did anything, it widened the gap between winning and losing sectors of the stock (and closed-end fund) market. It just goes to show how critical it is to pick funds in the right sectors, as well as those with savvy management that can shift with the times.

Technology, of course, boomed last year. At my CEF Insider service, we were well-positioned in tech with the BlackRock Science and Technology Fund (BST), which we added to our portfolio in August 2019.… Read more

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These days, I’m hearing from a lot of investors interested in monthly dividend stocks.

It’s easy to see why: monthly dividends line up nicely with our bills, something that’s very helpful in a crisis like this one. And if you’re reinvesting your payouts, monthly payers give your returns an extra lift in the long run because you can put your dividend cash to work faster.

There’s only one problem with these stocks: they’re few and far between.

Monthly Payers a Fraction of the Market

Source: CEF Insider

As you can see above, if we limit ourselves to monthly payers, we’re literally shutting out almost all of the market.… Read more

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