Buy This, Not That: 3 Preferred Funds Yielding 7%-9%

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Buy This, Not That: 3 Preferred Funds Yielding 7%-9%

Is there still a chance to buy the bank dip? You bet—with nifty yields up to 9.4%!

We’re going to avoid the regional lenders, which pains me to say because I love banking with the small guys. But I’m not looking to own them as the economy slows down.

No, nothing personal, but I’ll take the banking behemoths. None of them yield 9.4%, of course, but we engineer these payouts easily via their preferred dividends.

Preferred stocks are often referred to as stock-bond “hybrids” given that they share some characteristics of each asset. A quick breakdown:

  • They represent ownership in a company (like a stock)
  • They typically don’t offer voting rights (like a bond)
  • They pay dividends (like a stock)
  • Their dividends are typically fixed at a certain level (like a bond)
  • They can rise and decline based on the performance of the underlying company (like a stock)
  • But they tend to be much more stable, trading around a “par value” like a bond)

Most noteworthy, for income fanatics like you and I, is that their dividends are plump.… Read more

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3 Punchy Preferred Funds Yielding 6.2%-6.9%

Most income investors limit themselves to mere “common” dividends. But there’s no need for us to settle for 2% blue-chip yields when we can bank 6%+ payouts from the same companies.

Let’s use Bank of America (BAC) as our example. The stock should keep sailing as the 10-year Treasury rate grinds higher.

Common shares of BAC yield just 1.8% today. (This is what we receive when we type in “BAC” and hit the “Buy” button.) That’s not much. Fortunately, we can look past common dividends for higher yields without sacrificing safety.

Companies also can issue what’s referred to as “preferred stock.”… Read more

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The Best, And Worst, Ways To Buy Preferred Shares

As you near (and enter) retirement you probably favor bonds, which provide income with less drama than stocks. However, less drama means less potential upside. With retirees living longer than ever before, it’s important to not go too conservative too early in life. And fortunately today, even 65 or 70 may be too early!

One suggested solution for our long life expectancy “problem” is to stay with stocks longer. But stocks can go down as well as up and a big pullback can inflict permanent damage on a portfolio.

So, we want to capture the dividends that stocks pay and the upside potential that they provide by minimizing our downside risk.… Read more

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Revealed: 10 “Preferred” Dividends That Crush ETFs and Pay 7.5% in Cash

It’s a piece of advice so common I’m sure you’ve heard it a million times. Too bad it’s dead wrong.

I’m talking about the so-called “wisdom” that index funds always beat funds with real, live human managers.

Before I get into why it’s wrong—and show you 10 smartly run funds that easily beat their ETF cousins (while dropping an unheard-of 7.5% average dividend into our laps)—let me explain the problem here.

First, I should say that there are cases where index investing makes sense. If you’re 20 years old and you’re putting 10% of your income into a retirement fund, planning to retire when you’re 60 and won’t touch your savings till then, index investing may work for you.…
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