The $47,120 Mistake: Why 60/40 Portfolios Are Losing in the Tariff Turmoil

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The $47,120 Mistake: Why 60/40 Portfolios Are Losing in the Tariff Turmoil

It’s as predictable as night following day: Stock markets crash, and we almost immediately hear more about the so-called “60/40 rule” as a way for investors to protect themselves.

Don’t fall for this overdone “rule of thumb” (which, as the name says, recommends putting 60% of your portfolio into stocks and 40% into bonds).

Today we’re going to look at a much better way—one that pays you 9.7% dividends and delivers far better performance, too.

2025 Is 2022 Redux for the 60/40 Crowd

Today’s setup reminds me of what I heard near the end of 2022, when stocks were crashing. Back then, many advisors were dredging up this old idea to help ease worried investors’ fears.… Read more

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Tariff Panic Gives Us a Deal on 2 Huge Dividends from PIMCO’s “A-Team” (up to 12.3%)

On one front, this tariff pandemonium changes nothing for us: We still see our favorite high-yield investments—8%+ paying closed-end funds (CEFs)—as the best choice to anchor your retirement portfolio.

In fact, times like this add to their appeal even more.

That’s because, in a crash, we CEF investors don’t have to sell a single unit of our funds to get the cash we need to fund our lives. Our big dividends—many of which roll in monthly—take care of our needs for us.

Then there’s CEFs’ discounts to net asset value (NAV, or the value of their underlying portfolios). This unique-to-CEF measure tells us when a fund is cheap or pricey.… Read more

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My “Go-To” Way to Beat SPY, Bag 8%+ Yields

We launched our CEF Insider newsletter nearly eight years ago, in March 2017, and we’ve seen a lot since then: a pandemic, interest-rate swings, dramatic fights between fund managers and activist shareholders, and more.

But for me, the most exciting event has been the over 200% profit one of our long-time picks, a closed-end fund (CEF) called the Adams Diversified Equity Fund (ADX), has delivered to shareholders as of this writing.

Market-Beating Gains With ADX

With a 204.3% return currently as I write this, ADX actually beat the S&P 500 index fund that many American investors opt for: the SPDR S&P 500 ETF Trust (SPY), which is up just 171.5% over the same time period.… Read more

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3 Big Dividends (Yielding 7.9%) Built for Post-Election Drama

Well, that was fast. As you no doubt know by now, stocks gave back their post-election bump nearly as fast as they took it. Now they’re more or less where they started pre-election.

There’s a story behind this “pop and drop” that showed me something we need to bear in mind more and more as we head into 2025 (and a new presidential term): The need to diversify our portfolios, not only within stocks but (especially, with more volatility likely) beyond them.

And that need for diversification goes for our holdings of high-yielding closed-end funds (CEFs), too.

Now, market veterans will no doubt be quick to say that these short-term moves are just noise, and in the long term it doesn’t really matter who is the president.… Read more

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What the Trump Election Win Means for Our CEFs (Including This 11%-Payer)

Immediately after President-Elect Donald Trump won his second term last week, the US dollar surged, while US Treasuries fell:

Election Sends Dollar Up, Treasuries Down in Early Trading

Both moves are opposite sides of the same coin: Investors believe Trump’s policies will be inflationary. The theory suggests this would happen for a couple of reasons:

  1. The US government will spend more, and interest rates will rise higher than rates elsewhere in the world in response. That will attract foreign capital to America while making it less attractive for capital to leave the US.
  2. All of that extra capital in America will boost economic activity and demand for the dollar.

… Read more

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Yearly Dividends Up to $68,500 on Just $500K

If there’s anything better than monthly dividends, well, we contrarians don’t want to know about it. Getting paid on the same schedule as our bills (monthly!), makes retirement planning easy.

We still need enough yield, though, to get rid (and stay rid) of our day jobs. Our pile of savings is what it is at this point, so we look to larger dividends to do the heavy lifting for us.

The S&P 500, needless to say, won’t cut it. First, the “SPY” pays quarterly—not often enough! Second, it pays 1.2%—not high enough!

“The Market” Is Paying Just Pennies

Even yield-focused funds’ yields are pretty lame right now.… Read more

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Here’s What to Buy (for Big Dividends) After Last Week’s Market Plunge

What the heck happened last Monday? I know I don’t have to tell you that the market dropped off a cliff, only to float back higher as the week continued.

The media has been saying that it was all about the latest jobs report in the US, which came out on Friday and simply wasn’t that bad—certainly not the kind of result that deserves the response we saw from stocks.

To put it in perspective, the NASDAQ 100’s fall in a single day was worse than what we saw in the pandemic, when the global economy literally shut down.

Despite the rise in the unemployment rate, joblessness is still relatively low historically speaking, companies are defaulting less than a few months ago (and at historically low levels), and the US economy is set to grow well over 2% this year, after strong growth last year.… Read more

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Ackman’s $25-Billion Fund Goes Poof (and We Profit With Huge Dividends)

When legendary activist Bill Ackman makes a move, the investment world notices. So when he said he was going to jump into our favorite income plays—8%+ yielding closed-end funds (CEFs)—it certainly got our attention.

We broke it all down in a July 11 article, specifically how Ackman’s latest move—a plan to launch a new CEF with $25 billion in assets under management (making it by far the biggest CEF ever)—was likely to send these funds soaring.

Notice I used the word “was” a number of times just now. That’s because Ackman scrapped the plan just last week.

Ackman’s sudden about-face left many heads spinning in CEF-land.… Read more

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Yields 14.4%, Sure, But It’s Comically Overpriced

Who is paying a 27% premium for Guggenheim Strategic Opportunity Fund (GOF)?

Don’t get me wrong. GOF is a fine fund, delivering 9.8% yearly returns on its net asset value (NAV) since inception. But we are talking nosebleed valuation territory for GOF. It’s a dangerous purchase at these levels.

Bandwagoners buying today are unlikely to see 9.8% returns. Or anything close. Plus, they are exposing themselves to 27% downside risk because, as we’ll discuss in a minute, GOF eventually finds its way back to par.

How can a premium like this exist? GOF is a closed-end fund (CEF) with a fixed pool of shares.… Read more

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The Bond Market Is Booming (and these 9% Dividends Are the Best Play)

It’s no secret that corporate bonds are booming. But what might come as a surprise to some folks is that we’re not too late to get in. Through a group of well-run closed-end funds (CEFs), we can still tap big corporate-bond yields at a discount.

Even perennially gloomy Business Insider (notorious for its overdone calls for an inflation/recession-driven crash in 2022) acknowledges the terrific environment for bonds right now. Recently, BI had to admit not only that “Corporate bonds are the safest they’ve been in years,” but that this is one of the best bond markets we’ve ever seen.… Read more

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