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

Our Archive

Search completed

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

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

Read More

9% Dividends, 54% CEF Gains and More Income Q&A

Thank you to our 1,405 Contrarian Income Report subscribers who attended our “VIP” Q4 webcast a couple of weeks back! We chatted about bond funds paying 9%+, Federal Reserve “fueled” funds for 54% yearly returns, and more.

Prior to the webcast, we collected over 30 questions from thoughtful subscribers. We addressed most of these on the call. However, during the session, 70 more great income questions came in!

As promised, I read everyone one. Let’s chat about the most common questions today.

Q: I’m 64 years old and am just concerned about retiring on dividends. I own PCI which pays a high dividend but trades at a high premium.… Read more

Read More

What’s Better Than 7%-8% Yields? A 17% Sale on Them.

Historically, for whatever reason, stocks have made most of their gains between November 1 and May 1. (Hence the phrase “sell in May and go away.”)

I won’t bore you with the statistical details because they don’t matter for our purposes. Every year is unique, and we treat each as such. But, for our contrarian edge, it is helpful that the onset of fall provokes fear in the hearts of mainstream investors.

The S&P 500 is acting like it’s about to slip off a cliff. It’s been a year since the market’s last meaningful correction. We’re in the fragile half of the year and, seasonally speaking, September and October tend to be particularly weak.… Read more

Read More

Click Here to Boost a 20% Return to a 109% Moonshot

Contrary to popular opinion, we shouldn’t believe everything we read online. Even simple tasks such as counting dividends are often mishandled by our internet overlords.

Mainstream financial websites such as Yahoo! Finance and Google Finance should know better. Check out the misinformation they are spreading about our beloved PIMCO Dynamic Credit & Mortgage Income Fund (PCI). 

We added PCI to our Contrarian Income Report portfolio five years ago. If you bought PCI then, you’ve enjoyed $12.19 in dividends off an initial entry price of just $18.42. That’s a 66% “cash return” on our investment already!

But the charts provided by Yahoo and Google lost track of these dividends.… Read more

Read More

The Best CEFs for Rising Interest Rates

Thank you to our 1,578 Contrarian Income Report subscribers who attended our Q1 webcast last week! We received 114 questions during our one-hour call, plus several dozen more beforehand. Amazing.

Thank you for the thoughtful questions. I’ve read each and every one. Let’s chat about popular closed-end fund (CEF) topics today. (Next week, we’ll circle back with your equity-focused dividend questions.)

Q: Brett, what are your thoughts about Calamos Convertible Funds (such as CCD, CHI and CHY), which are currently yielding about 8%? Thank you.

Convertible bonds are a big beneficiary of Jay Powell’s money printing activity. Convertibles pay regular interest.… Read more

Read More

3 High-Yield ETFs (Paying Up to 11%) to Avoid in 2021

Here at Contrarian Outlook, our beat is income, and we’re often asked for analysis on high-yield ETFs. Today, we’ll look at three funds paying up to 11% (yes, that’s no typo).

I appreciate the ETF popularity. They’re cheap. They’re tax-efficient. They’re  well-marketed. They’ve got cutesy tickers.

But income investors who blindly buy into the hype, unfortunately, are not getting the most dividend for their dollar.

The real dividend deals are found in ETFs’ lesser-known cousins, closed-end funds (CEFs), which often dish even bigger payouts (and a monthly cadence, to boot). CEFs can also trade at discounts to their net asset values, because they fly under Wall Street’s radar.… Read more

Read More

How to Build a $250,000 Nest Egg in 5 Years (With 10% Dividends)

Four years ago, I published an article detailing how a young upper-middle-class professional could quit working and still survive on dividends alone in just five years. It was a claim that many folks thought was impossible to achieve (and they told me so in the comments!).

But history has proven that, in fact, it was true.

Today I want to show you how following the advice I gave back then would have produced financial independence (or an income stream that could cover basic needs) in just five years—and how you can replicate that same success today.

How It Works

Back then, I made three arguments:

  1. A young professional earning $70,000 a year and, being very disciplined, managed to save about two-thirds of that income, could use the stock market to build a substantial nest egg in half a decade.

… Read more

Read More

2 “Guard Dog” Monthly Dividends That Fight Off a Crisis

Right now, millions of people are plowing cash into this market, gambling that the worst of the dividend cuts is behind us.

I hope you’re not one of them, because this “dividend trap” is likely to spring—and steal away the income (and value) these folks have spent years building!

Just look at the numbers: unemployment is likely over 20%. Consumer spending cratered 7.5% in March, before this mess even really got started. And now Uncle Sam is demanding that any company seeking government aid first send its payout to the scrapyard.

Meantime, even cash-rich companies are pulling in their horns, like the Walt Disney Co.… Read more

Read More

Dividend Shopping Time! How to Pick 8% Payers for 8% Off

Have four months of “dead money” ever caused this much drama?

Let’s put last week’s pullback in perspective. As uncomfortable as it may have been for investors who watch the market daily, it simply served as a public service reminder that most investors are probably better off not watching the market daily.

The result of one of the worst weeks in Wall Street history? A mere return to late October 2019 price levels:

Wall Street’s Tower of Terror

Typically, an erasure of four months’ worth of gains wouldn’t be a big deal. However, this stock market had been unusually bullish, gaining nearly 12% in less than four months.… Read more

Read More

A 17.6% Dividend, 36% Upside and a 2020 Investing Strategy You Won’t Believe

Right now, with 2020 just hours out, is the perfect time to show you my two-step dividend strategy for the year ahead.

We’ll also dive into four specific stocks and funds to buy. They’ll hand you 6%+ dividends now and set you on the path to unreal payouts of 17.6%+ down the road.

How Powell Crushed Savers

First, if you’re disappointed in the dividend options out there today, you can blame one man: Jay Powell. (Actually, you’ll have to get in line to dump your frustrations on the poor fellow’s head!)

We all know that Powell’s clumsy “pivot” from rate hikes to rate cuts at the start of 2019 sent stocks soaring (and dividend yields plunging—as you calculate yield by dividing a company’s annual dividend payout into is current share price).… Read more

Read More

Categories