This Unbelievable 7% Dividend Just Jumped 21% (more on the way)

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One group of funds is doing something very unusual right now: they’re raising their dividends by double digits! And those huge hikes have driven the yields on some of these unsung income plays well above 7%.

Today we’re going to jump on this red-hot contrarian opportunity.

These smartly run dividend payers (and growers!) are closed-end funds (CEFs) that hold floating-rate loans. These assets are often overlooked, which is too bad, because they’re corporate bonds that do the opposite of what most bonds do. That makes them perfect buys for upside in today’s market, when “regular” corporate bonds’ prices are plunging.

Let me explain how floating-rate loans work, and how we’ll squeeze them for strong gains and growing 7%+ dividends.… Read more

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The last time we had this Fed setup, these safe 6%+ paying bonds jumped 20% in the year ahead!

The setup? The likelihood that short-term interest rates (as set by the Federal Reserve) will go nowhere over the next 12 months. To see this we’ll turn to the Fed funds futures, which are contracts that reflect real money being bet on the Fed’s upcoming action (or lack thereof). Collectively they comprise the smartest crystal ball available this side of Jay Powell.

Right now, the smart money is giving “no hike” a 75% probability between now and January 2020. And when we add in the bets on a rate cut or two, we’re looking at a 92% chance that rates will either be unchanged or lower this time next year:

Smart Money Bets 75% “No Hike” for 12 Months

This is bullish for – you’ll never guess – floating rate bond funds.… Read more

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