5 Easy Steps to 7% to 9% Dividend Yields and 109% Returns

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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 opportunities for contrarian-minded income investors like us.

So, 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. For example, we added this high-paying bond fund to our portfolio 2016 and its price-only returns look quite pedestrian.… Read more

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Let’s chat about making some real money in stocks. I’m talking about 14.6% returns per year, every single year.

I know, my 14.6% annual number sounds pedestrian in a world where peddlers are hawking virtual (pretend?) coins with pups on the cover. But my returns are real—and spectacular for investors who are patient.

With this method we can double our money every four years and ten months (the wonderful Rule of 72 says so!). And we can achieve these gains safely—without gambling or buying and hoping—because these profits are fueled by dividends.

The only twist from the traditional income investing that we both know and love is that we’re playing the dividend growth plus the current yield.… Read more

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Can we income seekers safely get back into REITs (real estate investment trusts) next year?

With the yield on the S&P 500 about to drop to a sad 1.5% (thanks, Tesla (TSLA) addition), renewed REIT-hope sure would be nice! The landlord industry index Vanguard Real Estate ETF (VNQ) pays 3.5%. That’s a dividend oasis in this zero-point-nothing world.

Once upon a time, VNQ performed in-line or better than the blue-chip index. It was a pretty good deal, as you could double your dividend and keep up with the Joneses’ portfolio with less heartburn.

Then, April 2020 came along, tenants stopped paying rents, and REITs-at-large got crushed:

A Good REIT Run While It Lasted

Does the fork-in-the-road above represent a paradigm shift or relative value?… Read more

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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

Read More

These 31 dividends are more than just safe. They are likely going up between now and October!

Recently, S&P Dow Jones Indices’ Howard Silverblatt put a hard number on 2020’s tough dividend decay, writing that second-quarter payouts were whittled down by $42.5 billion during the second quarter. The worst might now be over. Here’s a key excerpt from Silverblatt’s latest note about the month of July (emphasis mine):

“There were significantly fewer dividend actions, as 15 issues increased their dividend rates, one issue initiated dividends, two decreased them (including Wells Fargo’s USD 6.8 billion cut, the second-largest in index history), and one suspended them.Read more

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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

Read More

“Brett, I didn’t sell (insert dividend stock here) in March. Should I hold my nose and sell now?”

If you sat on your hands during the March drop and subsequent bounce, you’re not alone. Many of your fellow income investors are still holding on to positions that they know they should probably sell, but haven’t yet. (I know this because I’ve heard this question from a number of you!)

Well, here’s the question I would ask you about the position:

“Is the business going to rebound to pre-pandemic levels any time soon?”

If the answer is “no” then why would you not sell the stock?… Read more

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Is the bottom in?

Or is the market merely “sniffing glue” (as one of my friendly financial advisors aptly put it to me)?

No matter where you are currently handicapping the market, we have a proven playbook for buying big payers after a crash like the one we’ve just seen. We’ll consider the winners coming out of the 2008 crash, as well as the types of stocks that have performed well in post-pandemic China. Let’s get right into it.

Post-Crash Tip #1: Think Big

I love small companies. I lasted exactly 13 months in corporate America before fleeing to the world of small business and startups.… Read more

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The stock market is driven by greed and fear. And when the latter takes full control of the wheel, as is the case right now, value-minded income investors need to stay sharp.

It’s been more than a decade since we’ve gotten a true bear market, which tends to bring stock valuations more in line with historical norms. Even so, since 2009, we’ve experienced a few quick drawdowns that resulted in more reasonable prices, and more generous yields, than this expensive market typically offers.

There was the August 2014 correction triggered by China’s “Black Monday.” There was our near-bear experience in 2018, prompted by tariff fears, Fed rate hikes and the partial government shutdown.… Read more

Read More

The stock market is driven by greed and fear. And when the latter takes full control of the wheel, as is the case right now, value-minded income investors need to stay sharp.

It’s been more than a decade since we’ve gotten a true bear market, which tends to bring stock valuations more in line with historical norms. Even so, since 2009, we’ve experienced a few quick drawdowns that resulted in more reasonable prices, and more generous yields, than this expensive market typically offers.

There was the August 2014 correction triggered by China’s “Black Monday.” There was our near-bear experience in 2018, prompted by tariff fears, Fed rate hikes and the partial government shutdown.… Read more

Read More

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