3 Bond CEFs: Defense That Pays up to 10.2%

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3 Bond CEFs: Defense That Pays up to 10.2%

Although some tariff hikes have been paused, a recession is still very much in play.

Just a few days ago, I wrote that “this is the time to recession-proof our retirement holdings.” And why not? GDP estimates have tanked. So has consumer sentiment.

Goldman Sachs made headlines for raising its probability of recession (from 20% to 35%). Fine, but equity analysts often get caught up in crowds.

What was more striking was hearing a similar message from the debt watchers. Consider this post from Mark Zandi, Moody’s Analytics’ chief economist:

In my previous post, I showed readers how to recession-proof their portfolio with municipal debt.… Read more

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Bond Bargain Alert: 3 Secure Funds Yielding 8% to 9%

Bond bargain alert! Three secure funds yielding 8% to 9% are for sale on the discount rack.

Thanks to a two-year run of rising interest rates, these bond-like investments are cheap. I don’t expect this to be the case for long, with rates ready to relax.

These hybrid vehicles are part-stock, part-bond. They prioritize yield over price gains, which is just fine for us income-focused investors.

These “preferred” stocks share some elements of common stocks (the normal shares of companies that most of us own). We buy preferreds on a stock exchange. They represent ownership in a company. And they can move higher and lower in price.… Read more

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Yes, You CAN Beat the Market. These 7%+ Dividends Do It All the Time

Don’t fall into the trap of thinking you can’t beat the market. It’s total nonsense—and that goes double if you look outside stocks, to other assets.

Consider preferred stocks for example—they’re “bond-stock” hybrids that trade on an exchange, like stocks. But like bonds, they trade around a par value.

The best part is the income. Our favorite way to buy preferreds—through actively managed (we’ll come back to that in a second) closed-end funds (CEFs)—gets us yields of 7%+.

And select preferred-stock CEFs trade below their net asset value (NAV, or the value of their portfolios) today—with some of those discounts reaching well into double-digits.… Read more

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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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Safe Dividend Funds Up to 9.4% in the “Banking Fear” Bargain Bin

Select bank stocks may be cheap, but why settle for 2% to 3% yields?

Let’s really bang on the bargain bin and for dividends between 8.3% and 9.4%. These yields are available thanks to the current banking fears.

Fortunately, these payouts are more secure than vanilla investors appreciate. Hence, the dividend deal.

A Better Way to Play Banks

I wrote a few weeks ago about how mainstream investors are trying to time a bottom in banks.

Fair enough. Banks are extremely cheap right now by a well-known measure of long-term value: CAPE (cyclically adjusted price-to-earnings), which is the price divided not by the past year of earnings, but the past 10 years.… Read more

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Should You Pounce on These 8%-Yielding Preferreds?

Boring is perfect when we’re talking retirement investing.

We’ll let others take the S&P 500’s sad 1.7% yield and frequent mood swings. While we direct our attention to an elite trio that yields 8.2%.

You read that right. Eight-point-two-percent per year… in dividends alone! That’s an excellent $82,000 in annual income on a million dollar portfolio. Or $41,500 on a $500K nest egg. You get the idea.

Plus our yield cushion will help soften a September selloff. (Because let’s face it, this is most likely a bear market rally we’re in the middle of.)

No, the stock market doesn’t just give out 8.2% yields for nothing.… Read more

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These 7%-8% Monthly Dividends Are on Sale!

One of the market’s most secure, steady sources of generous yield is going through a rare turbulent moment. But these 7% to 8% yields—paid monthly, no less!—are selling at discounted prices we only see once every five years or so.

Is it time for us contrarians to consider “backing up the truck” to load up on these monthly dividend machines?

Why “Preferred” Dividends are This Cheap

“Preferred” stocks are stock-bond hybrids that rarely make Wall Street’s highlight reels. We like it that way, because these funds pay.

These underappreciated secrets don’t usually suffer this bad, either.

You Rarely See Preferreds Get Clobbered This Bad

The reason preferreds are usually so steady is that they simply collect income.… 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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2 “Preferred” Dividends Paying 4X More Than Stocks (with big upside ahead)

With stocks breaking to all-time highs, we should emphasize security of the dividends we’re purchasing first and foremost. In previous months, it was a good time to be greedy. Now, with other investors in a fervor, let’s be careful.

The main thing we don’t want to do in a pricey market like this? Join the millions of “buy and hopers” out there. I call them that because they “buy” the typical S&P 500 stock and then “hope” for gains.

They’re sure not buying for the dividends: the popular names pay a poverty-level 1.6% income stream, on average.

With a lame yield like that, hoping for a jump in the share price is the only play you’ve got!… Read more

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5 Dividends Up to 10.8% to Buy on This Dip

Are you trying to grind out a livable retirement on dividends alone? It’s possible, and it doesn’t require millions and millions already in the bank. (Even today, with interest rates in the tank.)

However, we must step outside the mainstream to achieve this. After all, why mess around with a standard $15,600 a year in retirement income when we can “supersize” that annual yield haul up to $108,000?

The “standard” $15.6K is what we get listening to mainstream financial advisors and pundits, and buying the vanilla ETFs that they recommend. The latter $108K is what we can achieve with a little bit of original thinking.… Read more

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