Bond Bargain Alert: 3 Secure Funds Yielding 8% to 9%

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Bond Bargain Alert: 3 Secure Funds Yielding 8% to 9%

Bond bargain alert! Three secure funds yielding 8% to 9% are for sale on the discount rack.

Thanks to a two-year run of rising interest rates, these bond-like investments are cheap. I don’t expect this to be the case for long, with rates ready to relax.

These hybrid vehicles are part-stock, part-bond. They prioritize yield over price gains, which is just fine for us income-focused investors.

These “preferred” stocks share some elements of common stocks (the normal shares of companies that most of us own). We buy preferreds on a stock exchange. They represent ownership in a company. And they can move higher and lower in price.… Read more

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Dividends Soon to Be “Unleashed” for Hikes Up to 100%

These dividends are about to break free from their regulatory shackles. Once the cuffs are off, we’re going to see payout hikes up to 100%.

Even the dividend growth “laggards” in this group are due for 11% and 17% hikes. As these payouts pop, their stock prices may certainly follow.

Here’s why.

For the past decade, income investors have overlooked the big banks. The Great Recession burned a hole in the brain of every retiree who lived to tell about it.

The U.S. Treasury bailed out America’s financial sector with the Troubled Asset Relief Program, which disbursed roughly $427 billion to buy toxic assets from (and even equity in) U.S.… Read more

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Buy These Big Dividends Before June 30 (They’ll Soar Shortly After)

Don’t let anyone tell you otherwise: financial stocks are still a hotbed of dividend (and share-price!) growth for contrarian income-seekers like us.

I know what you’re going to say next: “Brett, everyone says finance stocks are overbought.”

I get it, and that sounds logical … on the surface. 

It is true that when the calendar flipped to January, finance stocks surged, more than doubling the price gains of the S&P 500, going by the performance of the benchmark Financial Select Sector SPDR ETF (XLF):

Finance Stocks on a Tear …

But here’s what most folks have missed: even with that gain, finance stocks are only 20% above where they peaked prior to the last financial crisis 14 years ago.… Read more

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Weekly Market Summary: Riding Wave of Momentum Into Earnings Season

The S&P 500 snapped an eight-session winning streak on Tuesday, but U.S. stocks still have strong momentum heading into the first-quarter earnings season.

The index flirted with the 2,900 level this week, which is a price that we haven’t seen since last October. One big change since then is that average U.S. earnings showed 20%-plus year-over-year growth in the first three quarters of 2018 and now we’re staring at the first quarterly earnings decline in the S&P 500 in three years.

The quarterly reports we’ll see over the next few weeks will go a long way to determining if the recent momentum can continue.… Read more

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Week in Review: Stocks Ignore Political Noise and Continue Rebound

The Dow Jones Industrial Average emerged from correction territory this week, as investors applauded earnings in the financial sector. At the same time, markets chose to ignore the now record-long U.S. government shutdown and ongoing Brexit saga in the U.K.

Financials Start Earnings Season On Positive Note

Bank of America (BAC), Citigroup (C) and Goldman Sachs (GS) all traded higher this week, after posting solid quarterly results. The earnings news was not all rosy however, as Morgan Stanley (MS) fell short of expectations on Thursday. Outside of the financial sector, Ford Motor (F) also cut profit expectations this week.

As the following chart shows, quarterly reporting activity will continue to pick up next week and the floodgates really open in February.… Read more

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The Best, And Worst, Ways To Buy Preferred Shares

As you near (and enter) retirement you probably favor bonds, which provide income with less drama than stocks. However, less drama means less potential upside. With retirees living longer than ever before, it’s important to not go too conservative too early in life. And fortunately today, even 65 or 70 may be too early!

One suggested solution for our long life expectancy “problem” is to stay with stocks longer. But stocks can go down as well as up and a big pullback can inflict permanent damage on a portfolio.

So, we want to capture the dividends that stocks pay and the upside potential that they provide by minimizing our downside risk.… Read more

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This Weird Trend Will Send REITs Soaring

Mortgage rates reached a new milestone last week, and it’s one of the most important—and underreported—events in economic history.

For the first time ever, 30-year mortgage rates fell below 3.99%, on average. This is stunning for several reasons, but the most important is that the Federal Reserve is actively working to get mortgage rates higher. By increasing its Federal funds interest rate target, the Fed is hoping to make borrowing more expensive for everyone—companies, students and, yes, homebuyers.

But it’s not working.

And perhaps the biggest reason why it’s not working is that bond investors don’t think economic growth is going to strengthen, so they’re effectively daring the Fed to keep raising rates.…
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