My 3-Part Plan for (Cheap!) 7% Dividends in This Wild Market

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When I talk to investors these days, I hear three main reasons why they’re feeling unsettled. All three fears are interconnected (and none of them will likely surprise you!): inflation, the Federal Reserve and the war in Ukraine.

But the funny thing is, these factors are all actually enhancing the appeal of US stocks right now, particularly if we buy them through our favorite income investments: high-yielding (and often monthly paying) closed-end funds (CEFs).

Let’s take a closer look at each of these fears now, then talk about a CEF that’s well suited to the unsettled investor mood these days. It yields 7%, trades at a particularly attractive 6% discount to net asset value (NAV) and boasts a unique strategy that tones down its volatility and strengthens its dividend, too.… Read more

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We talk a lot about discounts and dividends in our CEF Insider service. And they’re critical, of course. The need for a high dividend is obvious, especially if you’re in or near retirement. And buying a CEF at a big discount to net asset value (NAV) can slingshot us to serious price gains.

But being too focused on one number, be it the discount, the dividend or an individual stock’s P/E ratio, is what renowned contrarian Howard Marks calls “first-level thinking.” To get to the real truth of whether an investment is worth buying, we need to go deeper.

Of course, we contrarians know this.… Read more

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There’s no doubt in my mind: five years from now we’ll look back at this time and say it was a golden opportunity to buy dividend stocks.

Those who bought in will be sitting on big gains (and income streams!). Those who sat on their hands will kick themselves.

I don’t want you to be in that latter group, which is why, in just a second, I’ll point you to a 6.9%-paying fund that’s perfectly positioned for serious gains in 2021 and beyond.

Dividends Back in Vogue

I know I don’t have to tell you that the dividend landscape has been bleak since March, with plenty of “sacred cow” dividend payers, like Disney (DIS) and Ford (F), dumping their payouts entirely.… Read more

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There’s a dangerous dividend trap setting up out there. It’s easy to fall into, and if you make this mistake, you could do fatal damage to your nest egg—and income stream—in 2021.

It’s a classic error called “reaching for yield.” It happens when investors put too much weight on an investment’s current dividend yield without considering what’s behind that payout. More and more folks are making this blunder today.

I know what you’re thinking: “Michael, I can easily sidestep a mistake like that.” That’s easy to say, but it can be hard to resist when you’re confronted with, say, a 5% payout that seems safe at a time when income go-tos like Treasuries and stocks pay a meager 0.8% and 1.5%, respectively.… Read more

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It’s the million-dollar question these days: how can this market be up double digits in an economy like this? And how can we dare hope for even a little more upside from here?

S&P 500 Defies Gravity

The truth is, there are plenty more gains to be made. But to get them, you need to look just a little beyond the big-name stocks most people limit themselves to. One overlooked place where there are still plenty of bargains (and outsized dividend yields!) to be had is in closed-end funds (CEFs). We’ll take a look at a high-yield CEF that offers you the perfect mix for today’s market—upside potential, downside protection and an outsized 7.2% dividend stream—in a bit.… Read more

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Markets have freaked out over the coronavirus—but there’s good reason to believe they have overreacted—I gave you a few of these reasons in my March 19 article.

There’s another reason we need to talk about today: corporate earnings.

While it’s true that earnings expectations have fallen since the outbreak began, they haven’t fallen as much as you’d think. At the start of the quarter, analysts expected 4.4% earnings growth from S&P 500 companies. Now they’re expecting a 0.1% earnings decline.

That’s basically flat, and it’s better than the earnings declines we saw at the start of 2019, when stocks were rallying, so this news shouldn’t scare investors away.… Read more

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What are we income-seekers to do after this latest pullback? Buy more? Sit on the sidelines?

It’s the question everyone’s asking. And while no one can predict the future, the past gives us some solid hints at what might be ahead, and the moves that make the most sense for our income portfolios (including a certain 7%-paying fund that’s more than worth your attention now).

To see what I’m getting at, let’s rewind to 2002. Then, like now, we were facing the potential of a pandemic: SARS in that case. There was other dreadful news, too: the dot-com bubble had just burst.… Read more

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What if there was a way you could tap this market correction to grab the biggest S&P 500 stocks cheap—all while hedging your downside and getting a 7.2% dividend yield?

It’s not only possible, but you can do it in one single buy. More on that in a moment.

First, I’m pounding the table on stocks—and in particular funds like the one I’ll show you shortly—for one reason: there’s a huge disconnect between the drop in the market that we’ve seen lately …

Investors Miss the Memo

… and what S&P 500 companies are telling us.

And that is that far more firms than expected are crushing the Street’s forecasts.… Read more

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The headlines say it all: the economy is slowing down, right?

And with stocks soaring—up 11% year to date—we must be headed for a correction.

Both statements would be off the mark.

Because the economic numbers the government is putting out (and the press is repeating without question) are flawed. I’ll show you how in a moment.

First, let’s cut straight to the upshot: you’ve still got a great shot at buying high-yield closed-end funds (CEFs) now, particularly those that hold America’s best stocks. I’ll name two choices yielding 7.3%+ at the end of this article.

First, let’s zero in on the many economic tailwinds (some in disguise), that are driving this still-solid opportunity.… Read more

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In my last article, I showed you funds that pay 6.4%+ yields and give you “crash insurance” in case of a market meltdown. The great thing about these funds is that they also offer tremendous upside in steady or up markets.

If that sounds like the best of both worlds, it’s because it is.

Instead of just buying the S&P 500 in an index fund, for example, you can choose the Nuveen S&P 500 Dynamic Overwrite Total Return Fund (SPXX). It tracks the index, provides extra downside protection and pays out a much higher dividend than index funds, too.

This isn’t the only fund that does this trick. There are dozens more.

In fact, if you’re nervous about the market and want as much safety as you can get while still staying invested, there’s one fund that’s an even better choice than SPXX: …
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