Sayonara, SPY. And Hello, Recession-Resistant Monthly Divvies.

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Sayonara, SPY. And Hello, Recession-Resistant Monthly Divvies.

Well the “index huggers” hurled their positions quickly, didn’t they! Some bad jobs numbers. A rally in the Japanese yen. And it was sayonara, SPY.

The financial “squares” use blunt instruments. When they panic, they dump the only ETF they own. Turns out they were all short the Japanese yen heading into the weekend!

When the margin call came, they sold the only ticker they own: SPDR S&P 500 ETF Trust (SPY).

I warned you about SPY three weeks ago, just before it crashed. My problem with SPY came down to three stocks, Apple (AAPL), Nvidia (NVDA) and Microsoft (MSFT), which made up 21% of the index—and still do!… Read more

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This 10.4% Dividend Ticks Our 2 “Must-Have” Boxes

As folks who are always on the hunt for high-yield investments, we love 8%+ paying closed-end funds (CEFs).

CEFs, of course, are renowned for those high payouts—and the vast majority pay monthly. No “regular” stocks offer such a potent payout combo.

Best part is, many CEFs are on sale now: Of the 422 tracked by the CEF Connect screener, 372 currently trade at discounts to net asset value (NAV, or the value of their underlying assets).

That’s a great place to start our search for top-notch CEFs because a discount to NAV is basically free money: it lets us pick up, say, red-hot tech stocks like Texas Instruments (TXN), Amazon.com… Read more

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2 “Sleeper” 7.5%+ Yielding Funds Set to Soar as Powell Cuts Rates

Here’s a wild prediction for the rest of 2024: “sleepy” (but very high yielding) emerging-market bonds will clobber today’s high-flying AI stocks.

Sounds ridiculous, right?

Well, it’s one of those seemingly weird calls that’s absolutely on the table after the first Fed rate cut drops—a date that, if futures traders are right, will arrive as soon as June:

Interest Rates Are About to Pull a 180

Source: CME Group

Here’s where emerging-market bonds come in: When rates drop, the US dollar gets banged up—it always does. That will light a fire under EM bonds.

And given that the dollar has been en fuego for the past decade, the greenback’s drop could very well be swift.… Read more

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Your Ticket for Yields Up to 12% (But Get Out Your Passport.)

AI is popular. Emerging market bonds, needless to say, are not.

Which is perfect for us responsible contrarians striving to retire on dividends. The more neglected an asset, the better.

But what’s the catalyst for these big yields? I’m talking dividends between 6.5% and 12.1%, by the way.

That’s easy. When the buck gets banged up, these funds soar. And that is exactly what is playing out today.

The US dollar has been en fuego for the past decade. I know, it’s hard to believe given noise from the “demise of the dollar” crowd. But these guys have lost a lot of money betting against the buck.… Read more

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Our Second Chance to Buy the “Bond Bounce” (for 10% Dividends) Is Here

Right now we’ve got a terrific setup happening in Treasuries—and we’re going to use it to “flip” the near-4% yield the 10-year pays into a gaudy 7.9%+, paid monthly, to boot.

And there’s more: we’re going to give ourselves a rare “double discount” on our bond buys.

We’ll do it by taking already-discounted bonds (thanks to Jay Powell’s Dirty Harry act on rates) and applying a second discount by purchasing through two closed-end funds (CEFs) we’ll talk about in a bit.

The window to use this strategy is now open. Take a look at this chart to see what I’m getting at here:

The 10-Year Rate Bounces Off Its 4% Ceiling (Again)

Over the past 15 years, the yield on the 10-year has zoomed higher plenty of times, until it smacks into the 4% “ceiling.”… Read more

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This Oversold Bond Fund Yields 7.5% (And It’s Set to Bounce)

When the market goes into the dumpster like it has in the last few months, one group of folks have an advantage: those who hold high-yield closed-end funds (CEFs).

If you haven’t already, now is a great time to join this group, thanks to the selloff. I’ll name an oversold bond fund that’s a great pick to start your CEF portfolio—or add to your current one—in a moment. It throws off a stable 7.5% payout that rolls your way monthly.

A 7.5%-Yielding “Dividend Lifeline”

Investors in “regular” stocks only wish they could get a payout like that. Unfortunately, the measly dividend on the typical S&P 500 stock (around 1.5%) means those who stick to the household names are reliant on price gains alone, so they’re forced to deal with sickening drops like the 2022 mess:

“Regular” Stock Investors Are Forced to Rely on This

To be sure, CEFs, like regular stocks, have fallen in the last few months, too.… Read more

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Monthly Payouts (Yielding Up to 9.7%) That Are Jay Powell-Proof

“Brett, how you hanging in there?” My CPA leaned into his computer on our latest Zoom call.

“Well, every time Gavin Newsom talks, my life seems to get a bit worse.” (The governor of California had just announced that public and private schools would not open in the fall.)

He cracked up. “That comment reminds me of a column you wrote years ago about (then Fed Chair) Janet Yellen. Something about Yellen yapping and closed-end funds (CEFs) rising?”

“Right. Poor Janet. She sure was level-headed compared to (current Fed Chair) Jay Powell. Every time Powell speaks, gold pops!”

The reason is obvious.… Read more

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Dividend Portfolio FAQs: Your Questions, My Answers

A big thank you to the 1,640 subscribers who attended our Contrarian Income Report webcast! As discussed on the call, I did my best to address pre-submitted questions during the session.

Even more questions came in during the live webcast. (I love the enthusiasm!) As you know, while I’m not allowed to give personal investment advice, I do read every question. And I like to use this weekly column to address the most common questions. So, let’s chat about your shared thoughts, curiosities and concerns.

Q: Should I be worried about the latest coronavirus? If not me, how about my portfolio?… Read more

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