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

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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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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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“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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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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