Two CEFs Walk Into a Bar … One Yields 10.9%, One Yields 14%. Which Is Better?

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Two CEFs Walk Into a Bar … One Yields 10.9%, One Yields 14%. Which Is Better?

Closed-end funds sometimes give us hard choices … like do we want high dividends or really high dividends?

Okay, so maybe I’m being a little flippant here—but not much!

A reader got me thinking about this recently, with a question about the differences between the 10.9%-yielding Western Asset High Income Opportunities Fund (HIO) and its sister fund, the 14%-yielding Western Asset High Income Fund II (HIX).

Both are managed by the same team, are in the same asset class (high-yield bonds) and have virtually the same name. So surely they’re pretty much the same, right?

Not so fast. In reality, choosing the right CEF is part science and part art, and a deep dive into these two to determine which is, in fact, the best buy is a good way to get a handle on the process.… Read more

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How to Earn Up to 12x More Yield Than the Market

“Buy and hope” investing has never been more hopeless.

With bond yields doing a “moonshot” to 1.8%, they are now looking down at the S&P 500’s sad 1.3% yield. Still, let’s admit—these aren’t enough for us to be able to retire on dividends alone.

Plus, we’re seeing serious volatility as the Federal Reserve hits the Pause button on its money printer. Basic income investors are losing these annual yields in one trading session!

Fortunately, there are serious dividends beneath the surface of the market. Today we’ll highlight five stocks that pay more than 7%. This is a big upgrade.

Back to the “spike” in bond yields.… Read more

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Don’t Fear the Taper: 2 Savvy Moves for 7.3%+ Dividends in 2022

Today we’re going to make a couple crafty moves worthy of the canniest contrarian—and in doing so, we’ll grab reliable income plays other investors are snubbing (with outsized yields up to 8.6%).

These moves fly right in the face of the Federal Reserve’s planned rate hikes, potentially starting as early as March, but that’s the whole point: plenty of folks have let the fear of higher rates scare them off these investments. But as mainstream investors almost always do, they’ve taken things too far, nicely setting us up to grab these high yields and some price upside as 2022 unfolds.

Let’s start with our first move, which is into longer-duration bonds, and specifically closed-end funds (CEFs) that hold them.… Read more

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5 Dividends Paying Up to 8% (Ranked Worst to First)

Fact: there are still lots of big, cheap and safe dividends out there—but they’re going fast as this market floats higher.

So today we’re going to get right to it and look at four options for your portfolio now, ranked from worst to first.

“Worst to First” Income Play No. 4: 10-Year Treasuries

The 10-year Treasury offers a “safety feature” mainstream investors love: no matter what happens, you’ll get your principal back after 10 years.

That’s actually a trap, though, because inflation gnaws at your nest egg the whole time, and your yield—1.6% today—won’t help you: it’s 40% below the rate of inflation, which jumped 2.6% year over year in March!… Read more

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New: 2 Steps for 9.9% Dividends in This Bubbly Market

Need more proof this market is completely upside down? Look no further than this mess with Hertz Global Holdings (HTZ).

You likely know the story: the car-rental chain, run off the road by the coronavirus, filed for bankruptcy over the Memorial Day weekend. On the first trading day afterward, May 26, the stock fell to $0.56 … then soared 10X!

Investors Compete to See Who Can Lose the Most

It’s pulled back a bit since, but is still up 200% from where it stood right after its bankruptcy filing.

And get this: 159,000 of users of the popular Robinhood trading app owned Hertz as of June 19, according to Robintrack.… Read more

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2 “Iran-Proof” Dividends Yielding 8.6% (With 10%+ Upside)

I hope last week’s Iran head-fake didn’t have you thinking about buying so-called “safe” dividends like Treasuries. Because these tired income standbys aren’t safe at all!

With your nest egg yielding a pathetic 1.9%, you’re guaranteed losses, with inflation running at 2.1%. So today we’re going to make a simple contrarian move that will:

  • Hand us huge 8.6%+ cash dividends—nearly five times what Treasuries pay.
  • Pay us every month, not every quarter.
  • Set us up for nice price gains “on the side,” and …
  • Give us “Iran insurance,” helping shield our nest egg against swift drops triggered by global instability, an economic downturn—any reason, really.

… Read more

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3 Incredible 8% Dividends No One Talks About

I run into far too many investors who think the best way to build their bond income is to buy through an ETF.

It makes sense. After all, buying corporate bonds “direct” means playing in the murky over-the-counter market, or forking over a hefty brokerage commission.

What’s more, the media—with help from ETF providers’ marketing departments—has most folks believing an “automated” ETF always beats a human manager.

So it follows that more people are buying ETFs like the Bloomberg Barclays SPDR High-Yield Bond ETF (JNK). With one click, you’re getting a portfolio of corporate bonds throwing off a nice 5.6% dividend yield—and charging just 0.4% of assets.… Read more

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1 Dangerous Fund to Sell Now – 3 Bargains to Buy Instead

After months of grinding higher, stocks have taken a bit of a breather. And one obscure corner of the market went lower still.

I know I don’t have to tell you that when that happens, contrarians like us are set up for some nice gains, so long as we don’t let emotion cloud our judgment.

And there are indeed some nice gains on tap with 3 cheap funds I’ll tell you about shortly. They’re all closed-end funds, a special kind of investment that throws off eye-popping dividend yields (one of the 3 CEFs I’ll show you yields a hefty 9.3% now!).…
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