Powell Will Cut and Rates Will Rise!? How It Can Happen (and a 5.7% Payer That Will Profit)

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Powell Will Cut and Rates Will Rise!? How It Can Happen (and a 5.7% Payer That Will Profit)

Here’s something most people forget about interest rates: The Fed does not call all the shots here.

This means that, in the coming months, we may see a setup where the Fed’s rate—the “overnight” rate at which financial institutions lend to each other—and the 10-year Treasury rate (pacesetter for business and consumer loans) part company.

Today we’re going to dig into a “stealth” 5.7%-paying stock that’s a perfect contrarian play on this situation. This one pays us every month, too.

Fed Cuts … and Rates Soar!?

I say that this “rate split” is possible because, well, it’s already happened in the last few months.… Read more

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This 11% Dividend is Backed by the Steadiest NAV We’ll Ever See

Vanilla investors fixate on price. We contrarians know better.

It’s all about the NAV. Net asset value, baby.

Price is what people pay at a given moment. But people panic. Many like to buy high—and sell low!

NAV, on the other hand, is what something is worth at that same moment. Price and NAV can become disconnected, especially during emotional market moments. When this happens, it is often a buying opportunity for careful contrarians like us.

Let’s take a pop quiz. Think about the funds you hold in your portfolio. What was your top performing NAV for the month of April?… Read more

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Easy Money Fed + Trump 2.0 = Upside for This 11% Dividend

Hedge fund veteran and Wall Street-approved suit Scott Bessent is likely the new Treasury secretary. That’s why this 11% dividend is a big winner.

Bessent will advocate for financial deregulation and increased lending. Easier and faster money. Which will be a boon for private equity and business development companies (BDCs).

Prior to Bessent’s appointment, the folks in Silicon Valley were already salivating over increased M&A: Big companies tossing money at startups and private firms raising piles of dough to get in on the action itself. That’s the rocket fuel that mints multi-millionaires and even billionaires.

This extra cash sloshing around will make inflation sticky.… Read more

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2 Good Dividend Stocks Up to 11% to Buy Today

Believe it or not, your favorite income strategist once had a multi-year stint as the head of human resources for a US-based software company.

It was, coincidentally, my last regular “day job” before I drifted into the world of stocks and startups.

When my old boss, our managing director, handed me the task of hiring our new employees, he gave me this piece of wisdom.

“I trust you to make the call. Just one thing…” he winked at me.

“The kids must be graduates from Berkeley, Cornell, MIT or Stanford.”

Gee, thanks boss. Like it was an easy task to convince a new graduate from an elite engineering school to skip the offer from Google to work with us.… Read more

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Where to Find 10% Yields at 20%-30% Discounts

Get your dip-buying lists ready, because it’s almost time to pounce.

Just recently, I explained to investors that, as a contrarian, we only want to fully dive into the market when we have a clear edge—the kind of edge you get when Wall Street has fully capitulated:

“We only want to fully invest when the regular investor has thrown in the towel. And there are plenty of indicators that can tell us exactly when our time has come. Consider, for example, the closely watched CNN Fear/Greed Index, which sits at 26 as I write.”

That was just a week ago.… Read more

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These 7 Dividend ETFs Yield Up to 10%

Exchange-traded funds (ETFs) sure are easy to buy. There’s an ETF for just about anything we can think of—stocks, bonds, commodities, growth, value, sectors, industries and, of course, high yield.

Dividends are our beat here at Contrarian Outlook. And ETFs keep us busy, because for every income investing angle, there is a popular dividend fund that we can easily improve upon.

I commend you for realizing that ETFs are not the final retirement solution. Convenient, yes. But we contrarians have more effective income tools available than ETFs.

Let’s walk through seven popular dividend ETFs (yielding a mouthwatering 5% to 10%), and tinker with each a bit to improve their future performance and their payouts.… Read more

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BDCs as the “New Bonds,” with Yields Up to 9.1%, But Are They Safe?

If you want to live off dividends in retirement, you can’t depend on “blue-chip stocks.” They simply haven’t paid enough yield for years:

Even High-Yield Savings Accounts Start to Look Good at These Levels

Source: Multpl.com

The S&P 500’s yield recently hit 1.7%. Think about it in “retirement spending” terms. If you took an entire million-dollar nest egg and put it in the S&P 500, you’d be looking at just $17,000 in dividend income per year. If you have even less to invest, like $500,000, that’s just $8,500 a year—several thousands of dollars below the U.S. Department of Health & Human Services’ poverty guideline of $12,760!… Read more

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13 Sky-High Yields of 7%-Plus: 4 Bombs, 9 Buys

What do most exchange-traded funds (ETFs) and many blue-chip stocks have in common?

They’re big, they’re popular with Wall Street pundits … and they don’t deliver nearly as much income as investors need to retire.

Not even close.

I want to share some ugly and eye-opening numbers with you about the skinflint ETF industry. I recently dug into the 100 most popular funds by assets under management, and here’s what I found:

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Uncle Sam’s Favorite BDCs (with 9% to 10% Yields)

Business development companies (BDCs) are the kings of yield right now, and it’s not even close. As I write, the average yield in the space is 9.5%, and more than half of all publicly traded BDCs boast a yield in the double digits.

That’s thanks to a long drubbing among these companies – but for the first time in a while, things are starting to look up in this high-yield arena. And right now, I have my eye on three glimmers of hope in the space that are throwing off 9% to 10% dividends.

2017 was a downright dreadful year for BDCs, which managed to even underperform bonds despite their high yields.…
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These 3 Dividend Stocks are Dead Meat on the Next Pullback

The stock market is overdue for a correction (to say the least). And when the rising tide pulls back, certain dividend dogs will be exposed.

It’s all well and good to chase 5% and 6% dividends as “bond proxies” when the market continually grinds higher. It’s another story when stocks begin to wobble – and an entire year’s worth of yield is jeopardized in a down week!

Of course some dividend stocks will hold up just fine. But we’re going to pick on three that are likely to be exposed when the bullish music stops.

Gladstone Investment (GAIN)
Dividend Yield: 6.8%

Back in July, I highlighted Gladstone Investment Corporation (GAIN) as a business development company stud amidst a pair of BDC duds.…
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