This Tax-Free 8.4% Dividend Can Protect Us From “Tariff Roulette”

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This Tax-Free 8.4% Dividend Can Protect Us From “Tariff Roulette”

The powers that be are playing a high-stakes game of “tariff roulette”—and I don’t know about you, but I don’t want to put my life savings on the table here!

But we’re not among the crowd bailing on stocks, either.

No way. We’re retirees (or aspiring retirees!) and we demand income. So instead, we’re going to look to “tariff-proof” (or “recession-proof,” if you think this trade war is sending us there) our portfolio. And we’re going to do it while cutting our tax bill, too.

Our timing is right here, because the jump in 10-year Treasury rates we’ve seen since the “Liberation Day” tariff announcement has given us a window to secure one of my favorite tax-free 8.4% payers at a “double discount.”… Read more

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Recession-Resistant Yields Up to 12.4% (or 17% in California!)

The economy is slowing. And if you believe that these tariff-tapping brakes are going to land us in a recession, these tax-equivalent yields up to 12.4% are for you.

This is the time to recession-proof our retirement holdings. The new administration appears to want to get a slowdown “out of the way” early. Atlanta’s GDPNow forecast says the economy is already shrinking:

Meanwhile the latest University of Michigan consumer sentiment report shows that confidence is falling fast. The index dropped to 57.9 in March—its lowest level since November 2022:

Back then we were emerging from a sharp and painful 10-month bear market.… Read more

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My “Go-To” Way to Beat SPY, Bag 8%+ Yields

We launched our CEF Insider newsletter nearly eight years ago, in March 2017, and we’ve seen a lot since then: a pandemic, interest-rate swings, dramatic fights between fund managers and activist shareholders, and more.

But for me, the most exciting event has been the over 200% profit one of our long-time picks, a closed-end fund (CEF) called the Adams Diversified Equity Fund (ADX), has delivered to shareholders as of this writing.

Market-Beating Gains With ADX

With a 204.3% return currently as I write this, ADX actually beat the S&P 500 index fund that many American investors opt for: the SPDR S&P 500 ETF Trust (SPY), which is up just 171.5% over the same time period.… Read more

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Jay Powell’s “Adulting” Could Send This 7.8% Tax-Free Dividend Soaring

If you were taking a break from your family on Christmas Day, you may have caught my article on how Jay Powell’s recent “hawkish cut” is set to light a fire under high-yielding (and tax-free!) municipal bonds.

Here’s why: Jay cut rates by a quarter point in December, but gave investors a stern pre-holiday “talking-to,” with the Fed slashing its rate-cut forecast to two from four in 2025.

Stocks, as you’d expect, threw a one-day fit. But here’s the thing: The yield on the 10-year Treasury note (the so-called “long end” of the yield curve, which has a mind of its own) spiked.… Read more

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Our Christmas Gift: A 7.9% Tax-Free Dividend Plus 8% Discount

Merry Christmas, my fellow contrarian! Did Santa bring you a tax-advantaged dividend this morning?

The municipal bonds funding the Las Vegas Valley Nevada Water District would have made a great stocking stuffer. They yield 5% and get a tax hall pass from Uncle Sam. Which means on a tax equivalent basis they actually pay 6% or 7% or more, depending on your income tax bracket.

Vegas is booming. And the town is in the middle of a hot desert that is increasingly arid, so this muni is rock solid.

Five percent, tax free. Why’d you forget this, Santa?

Well fear not, my fellow “naughty lister.”… Read more

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CEF Smackdown: 2 Tax-Free Dividend Payers Face Off. Which Is Best?

CEFs are renowned (by the few people who know about these high-income funds, of course!) for their outsized dividends—around 8%, on average, across the board as I write this.

But buying a CEF is not like buying a regular stock. When it comes to picking CEFs, we’ve got a whole bunch of different factors sitting in front of us that we need to weigh.

Sometimes CEFs Are Cheap for a Reason

There are, for example, some things that go beyond, say, past performance or discounts to net asset value (NAV, or the value of a fund’s portfolio—the main measure of a CEF’s value).… Read more

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These 9% Dividends Are Usually “Millionaires Only.” No More.

It’s Tax Day—the perfect time to talk about one of our favorite income plays: municipal bonds.

Don’t listen to anyone who tells you “munis” are boring. They’re anything but: It’s easy to grab 5%+ yields from them. And because munis’ income is tax-free for most Americans, that 5% is worth more—in some cases a lot more—to us.

They’re stable, too. Consider how much better you’d have slept at night if you held munis during the 2022 nightmare, when they held up much better than stocks:

2022 Put Muni Bonds’ “Crash Resistance” on Display

Truth is, yearly declines of any sort are unusual for munis, which tend to deliver 5% to 6% annual total returns in the long run—and that’s before their tax benefits, which are, quite frankly, game-changing.… Read more

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These 9% Dividends Are Usually “Millionaires Only.” No More.

It’s Tax Day—the perfect time to talk about one of our favorite income plays: municipal bonds.

Don’t listen to anyone who tells you “munis” are boring. They’re anything but: It’s easy to grab 5%+ yields from them. And because munis’ income is tax-free for most Americans, that 5% is worth more—in some cases a lot more—to us.

They’re stable, too. Consider how much better you’d have slept at night if you held munis during the 2022 nightmare, when they held up much better than stocks:

2022 Put Muni Bonds’ “Crash Resistance” on Display

Truth is, yearly declines of any sort are unusual for munis, which tend to deliver 5% to 6% annual total returns in the long run—and that’s before their tax benefits, which are, quite frankly, game-changing.… Read more

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Big Payouts, Lousy Returns: Avoid These Funds (Yielding Up to 8.9%) in ’24

Here’s the thing about high-yield closed-end funds (CEFs): sometimes a CEF will seem to have all the earmarks of a terrific investment: high (and monthly) dividends, reasonable fees and reputable management. But it’ll still come up short.

We, of course, love CEFs and see them as the critical pieces of our income portfolios. The portfolio of my CEF Insider service, for example, holds plenty of top-quality buys and yields 9% as I write this.

But when picking these funds, we need to make sure we don’t let a big name, high yield or so-called “low” fees dominate our thinking. We also need to look deeper, at factors like past performance and even management’s track record with its other funds.… Read more

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My Advice: Buy This 4.6% Tax-Free Dividend as Powell Hits Pause

There’s a crop of outsized dividends out there that are absurdly underpriced—I’m talking 14%-off discounts here. And our opportunity to pounce has arrived.

I’m talking about municipal bonds, which, like corporate bonds, look set to bounce as the economy slows and interest rates top out—then start to move lower. As rates ease off, bond yields will dip, putting a lift under bond prices (as yields and prices move in opposite directions).

The upshot? AI-powered NASDAQ stocks will lose their luster, and bonds and bond proxies—including utilities and “munis”—will likely be the darlings of 2024.

Heck, even a modest decline in rates would be enough to boost these assets.… Read more

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