These Tax-Free 5% Dividends Clobber Bonds (and Stocks, Too)

Our Archive

Search completed

These Tax-Free 5% Dividends Clobber Bonds (and Stocks, Too)

If you’re like me, you’re starting to collect your tax documents with a certain sense of dread.

It’s understandable as another April draws nearer. But there is a ray of light in the tax-season gloom for us—it comes in the form of municipal bonds, which can boost our income and minimize our future tax burden, too.

“Muni” bonds offer big yields these days, thanks to the Fed’s interest-rate hikes over the last couple years. That’s doubly valuable now because these yields are federally tax-free for almost all American investors.

That means if you’re in the highest tax bracket, you could buy 5%-yielding muni bonds and end up with the equivalent of an 8.3% yield from taxable assets like stocks or corporate bonds.… Read more

Read More

How to Tap the SVB Mess for Big Payouts (up to 8.2%)

There’s a “delayed reaction” dividend play (for tax-free 5% yields) waiting for us in municipal bonds right now—and it’s not going to last.

I know, I know. “Munis” don’t exactly get most folks’ hearts racing. But the fact that this corner of the market tends to lag behind stocks, bonds and the rest is exactly what’s behind our opportunity here.

Plus, we get to buy cheap and get our dividends monthly when we buy our munis through a closed-end fund (CEF). That’s because most muni CEFs pay monthly—including a 5.3% payer called the Nuveen Municipal High Income Opportunity Fund (NMZ), the particulars of which we’ll delve into below.… Read more

Read More

3 Easy Ways to “Crash-Proof” Your Portfolio, Grab 7%+ Dividends

With the swift stock-market decline we’ve seen since the start of 2022, and now, you can be forgiven if your stomach tightens just a bit when you go to check your retirement account.

So today I’m going to give you my three best tips for securing your hard-earned cash—and even better, locking in a dividend stream you can easily live off of in retirement. And no, you won’t need a seven-figure nest egg to pull off what I’m going to show you now.

Step #1: Diversify the Right Way

You no doubt know that diversification is key to protecting your wealth, but if you only go halfway, you’re hurting your gain potential (and exposing yourself to potentially severe losses).… Read more

Read More

3 Hated Funds Set to Bounce, and Pay 6%+ Dividends

Far too many investors ignore dividends, even in a bull market. When there’s a correction, like the one we’ve seen over the last few weeks, they flip the script, making safe cash dividends a lot more popular.

Luckily for us, there’s one ignored corner of the market where we can grab payouts that triple what the typical stock dribbles out.

That would be in municipal bonds, or “munis” for short. We hold one fund that owns such bonds, the RiverNorth Managed-Duration Municipal Income Fund (RMM), in our .

Munis are a kind of debt instrument issued by local governments to fund infrastructure.… Read more

Read More

This Bond-Buying “Hack” Converts a 5% Dividends to Massive 8.3% Payouts

Let’s break out of today’s zero-rate wasteland and help ourselves to huge, safe payouts yielding all the way up to 8.3%. And these massive payouts are tax-free too!

And, no, we won’t be hiring a team of CPAs to pull this off—nothing so expensive and impractical. Instead, we’re going to set ourselves up with a closed-end fund (CEF) that holds municipal bonds, or “munis.” And thanks to their tax-free nature, if you’re in the top tax bracket, a muni bond paying, say, a 4% dividend could be worth 7% or more to you.

I’ll give you a specific CEF that’s worth putting on your list now in a second (its 5% stated yield could be worth an outsized 8.3% to you, if you’re in the top tax bracket).… Read more

Read More

3 “Recession-Fighter” Funds Paying 6%+ (Tax-Free)

Far too many investors ignore dividends, especially in a bull market. It’s easy to see why: with stocks racking up yearly double-digit gains, it’s tough to get worked up about a sub-2% payout (which is what most S&P 500 names pay).

But a crisis flips the script, making safe cash dividends a lot more attractive. And luckily for us, there’s one ignored corner of the market where we can grab payouts that triple what the typical stock dribbles out.

That would be in municipal bonds, or “munis,” for short. They’re a kind of debt instrument issued by local governments throughout the US.… Read more

Read More

This “Billionaire’s Favorite” (Legally) Snubs the IRS and Yields 5.1%

If you’re like many folks, you might be looking at your stock gains this year and dreading the tax bill headed your way in 2020.

That makes now a great time to consider the only (tax-) free lunch in investing: municipal bonds. I’ll name one play on these retirement-changing investments in a moment. This unusual fund yields an outsized 5.1% today and sets us up for a “steady as she goes” triple-digit gain, too.

First, let’s talk a little more about the tax side of “muni” bonds: these investments pay a 100% tax-free dividend (so their “real” yields could be much higher for you, depending on your tax bracket).… Read more

Read More

10 Steady Tax-Equivalent Yields Up to 10%

Municipal bonds are off to a slow start in 2018 – which is usually a bullish sign for these tax-free payers.

We last “pounded the table” on munis in December 2016. They were coming off their worst month since the Great Recession, and we discussed their tendency to rally when they are hated:

“It’s impossible to call a top in yields (or bottom in munis) without the benefit of hindsight. But we contrarians make our money buying when nobody else wants to – and the last time munis were this hated, they returned 30-38% over the next 12 months.”

Turns out that was the bottom in munis.…
Read more

Read More

Categories