CEF Premium or Discount? Choose Wisely for 76% Returns

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CEF Premium or Discount? Choose Wisely for 76% Returns

Since March, central banks around the world have flooded the globe with newly printed money. As usual, we went “big” here in ‘Merica, with $3 trillion and counting flooding into everything from tech stocks to gold to bonds.

Who exactly is buying a US Treasury yielding 0.7%? Perhaps rich guys and gals with $10 million or more in the bank. Even then, these bonds are paying just $70,000 annually on that ten-mil! Which means a wealthy bond bull must tap into some capital or kiss that country club membership goodbye.

The Federal Reserve, of course, a big buyer. It’s distorting the market and keeping interest rates low, to the benefit of corporations but the chagrin of retirees.… Read more

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Trade-In Lame 0.5% Bonds for Secure Yields Up to 7.5%

Historically speaking, it’s best to avoid bonds when your central bank is printing money like crazy. More cash can lead to inflation, which can lead to higher interest rates—and put a damper on any fixed-rate holdings.

But not all bonds are bad ideas. Some have their coupons tick higher with rates. Others can even provide you with the upside of a stock! Let’s review US-centric fixed income, starting with the “outhouse” and working our way up to the “penthouse” quality bonds paying as much as 8% today.

US Treasuries: For 0.5%, Why?

Ten-year Treasuries pay just 0.5% or so as I write.… Read more

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5 Simple Steps to 10% Yearly Returns with Safe Dividends

Successful dividend investing is simple, though not necessarily easy. There are nuances which trip up many investors (including most professionals!). These twists and turns create “yield alpha” opportunities for contrarian-minded income investors like us.

If everyone else in the market were perfectly grounded and calculated, there would be no chance for us to make above-average returns. Thanks to these inefficiencies, we are able to bank big yields and price gains in Dividend Land. Ready to retire on dividends? Follow these five steps and we’ll do it together. Let’s start with an obvious yet underappreciated rule for income investors.

Step 1: Count Your Dividends

Since we focus on high yield, most of our returns come from the “yield” component of stocks.… Read more

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These Bonds Shouldn’t Be Available for “Individual Resale”

“Not for individual resale.”

Ever see that label on a box of food, and scratch your head? Like who’s buying this big-mega bag of Chips Ahoy for the purpose of reselling the “individually packaged” helpings of cookies inside?

While you and I have better things to do than deconstruct groceries, we also have better ways to make money than deconstructing perfectly good bond funds.

My article about “preferred” shares a couple of weeks ago inspired a few questions. We’ve got a few adventurous income colleagues who are interested in unwrapping the perfectly good packaging we discussed. Let’s walk them back from this potential “Chips Ahoy moment” in a moment.… Read more

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A Pandemic-Proof Bond Fund? New Dividend Raise, Now Pays 8%

While most income investors stare at their portfolios, searching for the next shoe to drop, we contrarian yield collectors were treated to a rare treat this week. A dividend increase—from an income fund that now yields 8%!

We’ll talk specifics in a moment, but let’s start with the cash flow stream. This fund buys “preferred” shares, a brand of stock that most mainstream investors are not familiar with. The “first-level” types typically limit themselves to the common shares of stock, which are what you receive when you place an order to buy with your broker.

Preferred are there, too, if you know where to look.… Read more

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7 Simple Steps to 11.8% Yearly Returns with Safe Dividends

Successful dividend investing is simple, though not necessarily easy. There are nuances which trip up many investors (including most professionals!). These twists and turns create “yield alpha” opportunities for contrarian-minded income investors like us.

If everyone else in the market were perfectly grounded and calculated, there would be no chance for us to make above-average returns. After all, the 11.8% and 18.8% annualized returns that my Contrarian Income Report and Hidden Yields readers are earning would be snapped up in a perfectly efficient market.

Thanks to these inefficiencies, we are able to bank big yields and price gains in Dividend Land.… Read more

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How to Be An Elite Dividend Investor

Successful dividend investing is simple, though not necessarily easy. There are nuances which trip up many investors (including most professionals!) These twists and turns create “yield alpha” opportunities for contrarian-minded income investors like us.

If everyone else in the market were perfectly grounded and calculated, there would be no chance for us to make above-average returns. After all, the 11.3% and 17.5% annualized returns that my Contrarian Income Report and Hidden Yields readers are earning would be snapped up in a perfectly efficient market.

Thanks to these inefficiencies, we are able to bank big yields and price returns in Dividend Land.… Read more

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7% Dividends and Upside (Guaranteed By the Fed!)

Preferred stocks are in the doghouse, and you just might be wondering whether this is the start of a buying opportunity.

Let me put that question to rest: it is.

Today we’re going to look at what’s behind this superb chance to buy, as well as 3 preferred-stock funds to consider: the Flaherty & Crumrine Dynamic Preferred & Income Fund (DFP), Flaherty & Crumrine Preferred Securities Income Fund (FFC) and John Hancock Premium Dividend Fund (PDT).

As you can see, all 3 of these funds are in the dumps.

A Steep Slide Down

But these are great funds, not only because of their sustainable 7% dividend yields and diversified portfolios, but also because this preferred-stock selloff is misguided.…
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How to Earn 10% Yields (Forever) From Safe Bonds

No safe bond pays 10% itself, of course. But it is possible to generate double-digit yields from a portfolio of secure bonds.

The secret is similar to successful dividend investing. Why buy a stock and be content pocketing “only its dividend” when you can have the payout with price upside to boot?

Most income investors are even less thoughtful when they purchase bonds. They fixate on the coupon rate (which these days they are inevitably disappointed with.) They watch their bonds weigh down their entire portfolio, muttering to themselves “at least they are safe.”

Well, sure. But they can be both safe and profitable.…
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The Best 8% Dividends for a Bear Market

You’re not the only one worried about high stock prices.

The lurking (and perhaps overdue) bear has other income investors worried, too. So let’s talk about the best buys for those of you worried about a stock market pullback of 10%, or 15%, or more.

We’ll start with some stalwarts from our Contrarian Income Report portfolio that weathered the last storm. Ironically (and probably fittingly) it happened off the bat – we launched our service, and the S&P 500 promptly dropped 10%!

No problem for us, though. In fact, subscribers who focused on their own holdings rather than the financial news may have missed the broader carnage altogether.…
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