Don’t Fear the Taper: 2 Savvy Moves for 7.3%+ Dividends in 2022

Our Archive

Search completed

Today we’re going to make a couple crafty moves worthy of the canniest contrarian—and in doing so, we’ll grab reliable income plays other investors are snubbing (with outsized yields up to 8.6%).

These moves fly right in the face of the Federal Reserve’s planned rate hikes, potentially starting as early as March, but that’s the whole point: plenty of folks have let the fear of higher rates scare them off these investments. But as mainstream investors almost always do, they’ve taken things too far, nicely setting us up to grab these high yields and some price upside as 2022 unfolds.

Let’s start with our first move, which is into longer-duration bonds, and specifically closed-end funds (CEFs) that hold them.… Read more

Read More

Another day, another sign the first-level crowd is (wrongly!) losing its head over inflation—and yet another opportunity for us to tap those fears for big dividends!

Let’s start with the number the headline-focused crowd can’t move past: 6.2%, which is the jump consumer prices took in October 2021, compared to a year earlier.

Inflation Lurches Higher …

But something strange is going on here—the stock market doesn’t care. While we’ve been hearing about inflation pretty much all year, the S&P 500 still jumped 25% in 2021. That’s because, while the “dumb money” panicked and sold out at various points during the year, the big institutional players—or the “smart money”—stayed long, and indeed bought more.… Read more

Read More

I hate to see everyday folks grinding it out with “has-been” dividend payers like AT&T (T) when there are dozens of safe 7%+ yielders out there, many with incredible performance histories, too. 

Trouble is, most people don’t know where to look. But I’ll take you on a personal tour of this overlooked corner of the market (and reveal the ticker of one of the best of these investments, which is throwing off a 10.2% yield as I write this) today.

First, back to Ma Bell: sure, she yields a high 8.4%, but the stock is one of the biggest yield traps on the market!… Read more

Read More

There are three funds hiding in plain sight that do something everyone thinks is impossible: pay huge dividends—with yields up to 7.2%—and deliver outsized 24%+ total returns, too.

I know I don’t have to tell you what an inflation-fighting weapon a return like that would be these days.

These are no less than the world’s three best-performing closed-end funds (CEFs) over the long term, and today we’re going to rank them from third to first to see if any (or all!) of them have a place in our investment portfolios.

“World’s Best” CEF #3: 24% Annual Returns for Years and Years

The least impressive CEF on the list, the Columbia Seligman Premium Technology Growth Fund (STK), has “only” a 23.7% annualized return, based on its market price, over the last five years, with a dividend that’s held steady throughout that time (and yields 5.1% today).… Read more

Read More

Today we’re going to build a portfolio that can make us totally financially independent with just $500K invested. And we’ll do it on dividends alone—without having to touch our principal.

Now I know that sounds outlandish in today’s low-yield world. Here’s how we’ll make it happen. (Hint: our plan involves three closed-end funds, or CEFs, paying dividends that dwarf the measly 1.3% you’d get from the typical S&P 500 stock.)

The Dividends-Only Retirement Portfolio

The principle behind retiring on $500,000 (or any amount, really) and being guaranteed of not outliving your nest egg is pretty simple: make sure the amount you’re taking out of your portfolio is less than what your portfolio earns you on a yearly basis.… Read more

Read More

It pains me when I see regular folks take the flawed “advice” to simply plow their money into an index fund and call it a day.

The biggest problem with this “strategy” is there’s basically no income: the SPDR S&P 500 ETF (SPY) yields just 1.2% today, so you’d need a million-dollar portfolio just to generate a pathetic $12,000 a year in dividends!

Poverty-level income on a million bucks! That’s unacceptable. And it’s precisely why I’m going to share a much better option with you—yielding an mammoth 7.8%—in a moment.

I was thinking about the “lazy” ETF strategy recently when I was reading a blog post by fintech startup Acorns, which suggested going with an ETF like the Vanguard Total Stock Market ETF (VTI), which invests in a whopping 3,935 US companies of all sizes, and combining it with the Vanguard Total International Stock Index (VGTSX) for international exposure.… Read more

Read More

Something weird is happening in the housing market, and it’s handing us an outstanding opportunity in stocks (including the 8%-yielding pick we’ll dive into shortly).

I know that’s an odd statement. After all, how can housing and stocks really be that connected? And how can we be so optimistic about housing when it has already soared in the last 18 months, and bubble warnings are everywhere?

The answer is that, as we contrarians know, the way the headlines make things appear in the markets is often very unlike how they actually are.

Look at the chart below, which shows, on the right, the average monthly mortgage payment over the past 45 years, in five-year increments, on the typical home (using the median average house price for each year, minus a 10% down payment).… Read more

Read More

Double-digit dividends are rare. A sky-high yield of 27.2% is an outright income unicorn.

Only in the merry world of closed-end funds (CEFs) would we see such a tale. It’s enabled by talented money managers who, thanks to wide investment mandates, serve as the Willy Wonkas of the CEF factory.

These managers have an endless bag of tricks at their disposal. They can put options to work. They can “double down” on their own bets. They can double, triple and even quadruple the yield on traditional investing strategies, leading to average yields in the high single digits and stretching all the way to 27.2%.… Read more

Read More

Imagine getting $100 per month in passive income for every $10,000 you invest. That amounts to a $35,000 annual dividend stream with less than $300,000 saved.

It’s not impossible. In fact, investors do it all the time with my favorite high-yield investments—closed-end funds (CEFs). While the average yield on CEFs is currently 6.2%, a third of these funds yield upwards of 7%, and 17 boast payouts of 10% and higher.


Source: CEF Insider

CEFs’ payouts are particularly impressive considering the SPDR S&P 500 ETF Trust (SPY), an index fund tracking the S&P 500, yields a paltry 1.3% today—the lowest yield for the stock market in 20 years.… Read more

Read More

If you’re on the lookout for an expert to help you build your nest egg—and bulk up your dividend stream to, say, a 6%+ yield—you have two main choices: a professional wealth manager or an investment advisory service (or a newsletter, as they’re more commonly known).

Which is for you? Let’s break down both options. Then we’ll dive into the kind of three-fund portfolio a newsletter might tip you off to, with a healthy 6.1% income stream and a history of double-digit yearly returns, too.

Wealth Managers Charge More, But They’re a Help in a Crisis

With active wealth management, the main concern most people have is fees.… Read more

Read More

Categories