5 “Correction-Proof” Yielders: They Go Up When the Market Goes Down

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This bull market is ten years old and stocks at large are richly valued. No wonder the last few weeks have been scary for some, who haven’t seen a real bear market in a very long time. Should we take our cue from the recent pullback to sell some positions, hunker down in cash and “wait things out” for a bit?

Absolutely not. First, it’s very difficult (and really, impossible) to know when it’s time to “get back into stocks.” Hulbert Financial recently ran the numbers for Barron’s on the advisors it monitors. It focused on the best “peak market timers” – the gurus who correctly forecasted the bursting of the Internet bubble in March 2000 and the Great Recession in October 2007.… Read more

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Individual investors tend to gravitate toward stocks trading under $10 for multiple reasons. For one, it can psychologically feel more powerful to buy 100 shares of a company trading for $8 than just eight shares of a $100 name.

While both investments are just as likely to generate attractive returns over time, low-dollar stocks have historically proven to be more volatile. In other words, they can offer active traders more bang for their buck in the short term.

Volatility works both ways, which is why I’ve highlighted two stocks that appear to be trading under $10 for a reason and might not be able to sustain their current dividends.…
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Today, I’m going to warn you about five stocks with yields of 7% or more that should be avoided at all costs. They are my next “dividend disaster” candidates that are likely to either reduce their payouts, or lose 20% or more in price, or both.

Big current yields have nothing to do with safety. Consider these year-to-date performances from high-yielding companies that started 2017 with juicy yields, but at some point cut or suspended their dividends:

  • Windstream: Yielded 7.5%, lost 75%
  • Mattel: Yielded 5.5%, lost 45%
  • GNC: Yielded 7%, lost 26%

I warned you to sell Mattel late last year, before its dividend cut.…
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A high dividend yield can be the ultimate retirement holding. Or it can be a trap.

Today, I’m going to show you five stocks with mouth-watering yields of between 6% and 23% that are tomorrow’s dividend disasters. If you own shares in any of these firms, sell them now.

Don’t “ride these stocks down” like RadioShack shareholders did when the nearly century-old former electronics retailing giant that filed for bankruptcy protection in 2015.

RadioShack suspended its dividend in July 2012. The warning signs were there, but no one listened. Revenues had been in constant decline since their peak 16 years earlier, debts were mounting, ratings agencies were downgrading RadioShack’s bonds. And in April 2012, RSH reported the first of what would be many quarterly losses.


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