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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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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These 7%+ Dividends Are Your Best Play as Rates Get Slashed

Look, rate cuts are only weeks away now—likely starting in September. And there’s one terrific way to tap them: high-yielding municipal bonds!

I know most folks think “munis”—issued by state and local governments to fund infrastructure projects—are boring.

It is, frankly, a ridiculous opinion. Tell me what’s “boring” about an investment that kicks out a 7.7% tax-free dividend!

To be sure, there are a couple quibbles you might have with munis.

For one, they’re tough to buy individually. But that’s really not a problem: ETFs offer one way in, but a much better way—and the only road to 7.7%+ dividends—is through closed-end funds (CEFs) like the three we’ll break down in just a second.… Read more

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These Tax-Free 7.7% Dividends Just Grew 30%+ Overnight

Some of our favorite high-yield dividends just did something stunning: They sent their investors’ payouts soaring—in some cases by more than 30% overnight.

All of these high-paying dividend growers are municipal bond funds, a corner of the market many folks see as boring—if they know about it at all.

I don’t know what’s “boring” about a payout that leaps double-digits in one go—and hands us a 7%+ tax-free dividend, to boot!

That’s exactly what’s happened at a slew of “muni” focused closed-end funds (CEFs) in the last month or so. (Municipal bonds are issued by state and local governments to fund infrastructure projects).… Read more

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Is There Any Reason to Hold a CEF Paying Less Than 5%?

Only here at Contrarian Outlook can we banter for an hour-plus about closed-end funds, utilities and oil dividends! This site is our sanctuary, my income friends.

I’m talking about our Contrarian Outlook 2024 Q2 VIP Webcast. Every quarter we fire up GoToWebinar and discuss the top high-yield stocks and bonds on my mind, along with your questions. A big thanks to my 1,151 subscriber friends who attended the meeting live.

On the call I fielded some questions about closed-end funds (CEFs) that we didn’t have time to cover. I said I’d read them all and, well, I did. So, let’s address them now.… Read more

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Swap Your “Dead Money” ETFs for These 7%+ Payouts

I don’t know why you’d try to cobble together an income stream with miserly ETFs when there are plenty of closed-end funds (CEFs) trading at big discounts, even after the huge market rebound we’ve seen since March.

What’s more, many of these CEFs are throwing off life-changing 7%+ payouts!

Why are we seeing some great deals in CEFs now? Because the folks who invest in these funds tend to be slower to react to events than the jumpy crowd holding the typical S&P 500 stock. That lag gives us a nice opportunity to buy while these funds’ prices are still deeply discounted from the value of the assets in their portfolios (a figure known as the net asset value, or NAV).… Read more

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4 Tax-Free “Layup Dividends” With 32% Upside

Where are we to turn for high, safe dividends these days? Certainly not 10-Year Treasuries, unless you think you can scrape by on their 1.7% yields.

I’ll save you the calculation: you can’t, because that yield matches the inflation rate to the decimal point.

Your “true” income? $0.

The S&P 500 isn’t much better: for a pittance more (a 1.84% average yield), you’re exposing your nest egg to this:

When a 1.8% Dividend Costs You 20%

But don’t, because I’ve got a better way—a low-key alternative I call a “layup dividend.” If you’re a basketball fan, you know what I’m talking about: the layup is the simplest shot in the game, where you simply “lay” the ball over the rim into the net.… Read more

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Safe Tax-Free Bonds Paying 5%+ to Buy and Hold Forever

If you’re looking for tax-free yields, municipal (“muni”) bonds can provide you with 5%+ distributions that Uncle Sam won’t touch. With rates rising, it is a bit tricky to make savvy buying decisions at the moment. But income investors buying smartly today are banking 5%+ yields – and paying as little as 88 cents on the dollar!

For quick profits, it’s best to buy munis after mini-panics. They seem to happen every year or two, presenting us levelheaded contrarians with safe yields for cheap. (Most recently, readers who followed my advice and bought munis after an irrational “tax plan panic” enjoyed total returns up to 16.7% in just 12 months!)

Muni Selloffs Usually Precede Quick Profits

Today: Big Discounts Plus Demand Outpaces Supply

For longer-term income investors looking for steady monthly paychecks, the best time to buy munis is usually anytime – especially for those in a high tax bracket.…
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4 Smart Retirement Buys for 7.2% Dividends and Big Gains

Today I’m going to show you 4 funds that, when put together, give you a juicy 7.2% dividend yield.

And that’s just the start. In addition to giving you $595 per month in income for every $100,000 invested, this “instant” 4-fund portfolio gives you diversification that limits your risk of losing cash in a market downturn.

Oh, and there is capital gains upside here for you, too.

The reason for that upside is that all of these funds are trading at a pretty big discount to their net asset value (NAV).

Let me explain.

Each of these picks is a “closed-end fund,” a unique type of fund that has a few key advantages over more familiar mutual funds and exchange-traded funds.…
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