When Rates Fall, This 14% Dividend Soars (Next Likely Jump: September)

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When Rates Fall, This 14% Dividend Soars (Next Likely Jump: September)

I have to laugh when I hear people say Jay Powell has been tough on rates. Sure, he’s been talking tough. But when he’s not doing his Dirty Harry act at the mic, he’s been keeping the liquidity party going through the back door!

I call this “Quiet QE.” If you’ve read my articles in the last couple of years, or are a member of one of my premium services, you’ve no doubt heard me talk about it before.

It’s one-half of the opportunity we’re looking at in corporate bonds today.

The other? The arrival of what I call “real” QE, in the form of rate cuts slated to start up in September.… Read more

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This Steady 14% Dividend Will Crush Stocks Well Into 2025

Stock market predictions, of course, are just that—predictions. All of them (including mine!) should be taken with a grain of salt.

I normally prefer to avoid making them. But every now and then I partake because, well, the prediction game is fun! And we do need some kind of forecast to work from when it comes to buying stocks—and our favorite income plays: 8%+ yielding closed-end funds (CEFs).

The key, of course, is knowing when to stick to your forecasts and when to change tack. So as we move past the August 5 correction and toward the final third of 2024, it’s a good time to check in on a couple predictions I made back in January and see how they’re playing out.… Read more

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These Big Dividends (Up to 11%) Are Primed to Soar in “Bond Rally 2”

At my CEF Insider service, we’ve been bullish on corporate bonds (especially corporate bond–focused closed-end funds yielding 8%+) for a long time now.

We remain so, because we’ve got a nice “goldilocks” setup for these funds right now:

  1. The US economy, while not booming at a rate that makes everyone happy, has steadily improved since the pandemic, prompting inflation to slow but remain elevated.
  2. The Federal Reserve, seeing this, is getting set to lower interest rates in late 2024, or possibly at some point next year.

These are both bullish signs for corporate bonds—and the closed-end funds that hold them. I’m sure I don’t have to tell you they were hit hard in 2022, resulting in an array of bargains.… Read more

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Time to Profit From the 8% “Wallflowers” of the Dividend World

I’ve dedicated my career to closed-end funds (CEFs) because in a way, these high-yield investments saved my life: Using these funds to get an 8% income stream from my portfolio gave me the confidence I needed to quit my academic job well over a decade ago.

I started writing about CEFs after that, mostly out of surprise and confusion: Why weren’t these reliable income plays—which yield 8.2% on average now—more popular?

Well, after over a decade of talking to economists, bankers, fund managers and other experts, I’ve come to realize they should be more popular, and that they probably would be after a big shock to markets made them irresistible.… Read more

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Powell’s “Quiet QE” Could Send This 9% Payout Soaring

“Don’t fight the Fed” is my top investing rule—but what the heck do we do when Jay Powell says one thing and then does another?

We buy bonds! Below we’ll dive into a bond fund kicking out a sweet 9% yield and sending payouts our way every month.

But first, let’s get to the heart of the Fed chief’s doublespeak.

Did you watch Powell’s press conference last week?

If you’re like me, you probably weren’t surprised by most of it. He did his usual tough-guy talk on rates. But then, almost as an aside, he said the Fed is slowing its campaign to shrink its balance sheet—known as “quantitative tightening.”… Read more

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These 8% Dividends Are Due for a “Delayed Reaction” Surge

There’s no sugarcoating it: As I write this, our favorite high-yielding income plays—closed-end funds (CEFs)—are lagging behind “regular” stocks.

But that doesn’t mean I’m opening this article on a sour note. Truth is, this underperformance is good news for us, as these unloved (and cheap!) 8%-payers are long overdue for a “snap back” to normal.

The result is a (likely short-lived) buying opportunity we’re going to break down now—especially as it relates to the 6.7%-paying Adams Diversified Equity Fund (ADX), a core holding (and buy recommendation) of my CEF Insider service.

But let’s start with that performance lag.

CEFs Get Caught in Stocks’ Wake

Source: CEF Insider

Over the last year, CEFs focusing on stocks (measured by the performance of our proprietary CEF Insider Equity Sub-Index) have returned 8.9% as of this writing, well below the stock market’s 28.5%.… Read more

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A 13.8% Dividend Backed By the Fed

I know that no one wants to talk about the 2020/2021 lockdowns anymore. But those dark days did do one critical thing for the high-yield corporate-bond market: made these so-called “junk bonds” too big to fail.

And investors are just starting to come around to that fact.

The takeaway is that we’ve got a nice opportunity to grab historically large, and stable, dividends from corporate-bond funds, including a closed-end fund (CEF) we’re going to focus on in this article: the PIMCO Dynamic Income Fund (PDI).

Long-time readers of my articles here on Contrarian Outlook, as well as my CEF Insider advisory, will recognize PDI.… Read more

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1,188 Bonds You Must Sell Now!

Be careful how you buy your bonds. The most popular tickers have four “fatal flaws” that’ll doom you to underperformance at best, or at worst leave you hanging in the event of a market meltdown!

Let’s pick on the widely followed and owned iShares iBoxx High Yield Corporate Bond ETF (HYG) as an example. It has attracted nearly $17 billion in assets because:

  1. It’s convenient and as easy to buy as a stock.
  2. It’s diversified (for better or worse, as we’ll see shortly) with 1,188 individual holdings.
  3. It pays well, at 6% today.

The accessibility of funds like HYG appears cute and comfortable enough.… Read more

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Think You Don’t Have Enough to Retire? These 8%+ Dividends Change the Math

Today we’re going to build ourselves an outsized income stream with just three funds. Buy all of them and you’ll end up with an average yield of 8%+, with payouts rolling your way every month.

Investing doesn’t get much simpler than that!

You’ll also get strong diversification: The three funds we’re about to uncover hold stocks, bonds and real estate. Combined, give you exposure to thousands of assets across the country.

Maximizing Your Savings Potential

Before we go further, let’s put an 8% payout in perspective: If you have $1 million saved, it translates to $80,000 annually, or over $6,600 per month—a substantial amount that could either supplement or even replace your current income.… Read more

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These 8%-Paying Laggards Are Set to Bounce (Time to Buy)

We’ve got clear proof that our favorite income funds—closed-end funds (CEFs), which yield 8% and up—are still well behind the rise we’ve seen in the S&P 500, and set to make up that ground.

While I can’t tell you exactly when that bounce will happen, we’re going to dive into the reasons why it’s very likely today. And, anyway, timing doesn’t matter too much to us at CEF Insider because we’re happy to use this time to buy our portfolio’s high dividends, which yield up to 13.7% as I write this.

The “Scared Retail Investor Lag Effect” and Our CEFs

Sadly “SRILE” doesn’t sound too appealing as an acronym, so I don’t think I’ll become famous for inventing it.… Read more

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