5 Market Drivers to Give Us Big Gains (and Dividends) in 2021

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Stocks are up—and so are coronavirus cases. And right on cue, I’m hearing from plenty of investors asking if now is the time to sell and lock in their gains.

No way. It’s actually a good time for us contrarians to buy. Here are five reasons why I see stocks rallying into the end of the year—and rolling higher still as we move into 2021.

Market Driver No. 1: Rising House Prices 

When house prices rise, homeowners feel wealthier. And when people feel wealthier, they tend to buy stocks.

It’s true that big-city properties are struggling to hold their own, but homes in the suburbs and rural areas are appreciating at a rate we haven’t seen in years.… Read more

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2020 has turned on a dime, and we dividend investors need to pounce now to set ourselves up for the big dividends and fast upside in 2021.

With a (mostly) settled presidential election and a vaccine for the virus, the strong buying opportunity we’ve waited on for 7 long months is finally here.

So what, exactly, should we be buying?

Let me show you the strategy I’ll be following in the coming months, along with three tickers—one of which has grown its payout an amazing 638% in just five years—poised to deliver big upside and dividends.

Divided Government Will Ignite Our Returns

No matter where you stand on the election—and I’d repeat that we always set aside our politics and approach things purely as investors here at Contrarian Outlook—we’ll likely have a divided government, with a Republican Senate and Democrats holding the House and presidency.… Read more

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There’s a way for us dividend investors to tap the news of a COVID-19 vaccine for huge payouts of 10% and up. And we’ll position our portfolios for serious price upside, too.

I know the vaccine news has a bit of a “horse is out of the barn” feel to it. After all, the market and shares of the vaccine’s producer, Pfizer (PFE), have already popped (though the rally has taken a bit of a breather lately). But you’re not too late. With the three investments I’ll show you below, you could grab healthcare dividends much bigger than the 3.9% Pfizer pays now.… Read more

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Since we last connected last Wednesday, we’ve had a few notable events happen (to say the least!)

First, former vice president Joe Biden became president-elect Joe Biden. Depending on your perspective, this may or may not be a “done deal” as far as you are concerned. That’s fair. However, it is mostly a done deal as far as the prediction markets are concerned.

Leading website PredictIt is giving Biden a 90% chance of winning this never-ending November election. I like PredictIt better than any poll because punters are betting “real money” on the website. Heading into the election, the prediction marketplace correctly foresaw a close election, outperforming any pollster I’m aware of.… Read more

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Let’s not assume our retirement savings will benefit from the Federal Reserve’s bout of 2020 money printing. Inflation could be a real problem, as soon as 2021. So let’s talk about stocks that are not only protected but likely to benefit from Jay Powell’s prolific “efforts.”

(In other words, dividend stocks that’ll double while investors are fixated on deflation.)

When it comes to inflation, many folks have a dangerous blind spot. They recall 2008, and the Fed’s then-extraordinary actions late that year, which gave us a narrow escape from deflation, and no inflation to speak of.

Just think back to that time.… Read more

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“Money printer go brrrrrrrrr!”

This humorous investor war cry making the social media rounds these days is all you need to know about the Federal Reserve’s tactics to fight off the coronavirus. Jerome Powell is printing money like there’s no tomorrow.

In fact, since March, he’s created more than $3 trillion fresh dollars! This has been the largest money creation event in the history of the planet.

Powell Prints, Money Supply Soars

More money is lousy news for each outstanding greenback. The US dollar is starting to tailspin lower thanks to a flood of supply:

More Dollars Means Each One is Worth Less

What dividends do we buy when the dollar is weak?… Read more

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Somehow, some way, the stock market continues to levitate higher. Yet I see very little that’s worth buying here.

We can’t argue with the tape. Markets will do their thing, while we must do ours. And today, it’s a good time to be cautious and prepare for the possibility of another sharp pullback. (The old “retest” of the lows that most investors expected until they were swept away by the allure of rising stock prices!)

Our dream shopping list, as we’ve discussed before, should contain some blue-chip dividend stocks. Nasty bear markets are the only time we can buy these names cheap!… Read more

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Mainstream financial channels have made a big deal out of the current relief rally (“Is it a ‘V-shaped’ recovery?” they comically muse). Whether it’s a V, W,  L, Nike swoosh or (my favorite) bathtub, the fact is that most stocks are still down on the mat.

(This is no surprise. The average bear market lasts 12 to 18 months. We are just beginning month three—yikes.)

The well-known S&P 500 always leads the headlines. Five hundred of America’s blue-chip firms, sounds like a pretty good sample size, no?

In 2020… no. The index is weighted by market cap, giving favor to Microsoft (MSFT), Apple (AAPL) and Amazon (AMZN)—its top three holdings—which have outperformed the market by a wide margin recently.… Read more

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In normal times, we contrarians are stuck combing the market’s backwaters—REITs, closed-end funds (CEFs) and the like—in our hunt for outsized dividends.

But, of course, these are not normal times.

This crisis has flipped the script. Now we can get the same big payouts but with much less work. In fact, we can get them from the same stocks you’ll find in any American’s portfolio! This is a once-in-a-generation opportunity, and it can’t last.

Fishing Close to Shore

The last time I saw a situation like this was in March 2009, days before the S&P 500 bottomed in the financial crisis.… Read more

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A friend of 30+ years gave me a ring last Friday afternoon to check in on the family. Unfortunately for him, I popped back with a little more “real life” than he was ready for!

Other than catching up, he shared that his 401(k) plan was now liquid, thanks to his company being acquired. Having a cash portfolio at times like these is a fantasy that few investors actually experience.

“I’ll share what I wrote to my CIR subscribers today. For long-term positions, don’t be afraid to have up to half of your portfolio in cash right now. I think we’re going to see nice buying opportunities in the months ahead.”… Read more

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