This 15% (!) Dividend Is Ready to Pop as the Fed Cuts

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This 15% (!) Dividend Is Ready to Pop as the Fed Cuts

Could the Fed cut rates—and actually cause interest rates to rise?

Absolutely. In fact, it’s a setup I see as very much in play. Today we’re going to talk about a 15%-yielding (!) stock that’s well-positioned to benefit.

Powell Vs. the 10-Year, Round 2

How would this “rate split” come about? To get at that, we need to bear in mind that the Fed only controls the effective Federal funds rate. That’s the “short” end of the yield curve—or the rate at which financial institutions lend to each other.

Meantime, the “long” end—pacesetter for consumer and business loans (including mortgages—more on those shortly) is tied to the 10-year Treasury yield—and has a mind of its own.… Read more

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Sell Now! 20 Dicey Dividends for 2024

I don’t want to be the messenger of bearish news to kick off the new year. But, as a card-carrying contrarian, I can’t help it either.

We should sell our dicey dividends now. While the market is high.

The best time to buy was October, when vanilla investors were fearful. We discussed “backing up the truck” to buy anything and everything week after week after week.

CNN’s Fear and Greed Index (FGI) had bottomed out at 16 out of 100, an Extreme Fear reading only seen during stock market panics:

1 Rally and 3 Months Ago: Extreme Fear

Meanwhile the bastion of basic financial thinking, MarketWatch.com,… Read more

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Sell Now! 20 Dicey Dividends for 2024

I don’t want to be the messenger of bearish news to kick off the new year. But, as a card-carrying contrarian, I can’t help it either.

We should sell our dicey dividends now. While the market is high.

The best time to buy was October, when vanilla investors were fearful. We discussed “backing up the truck” to buy anything and everything week after week after week.

CNN’s Fear and Greed Index (FGI) had bottomed out at 16 out of 100, an Extreme Fear reading only seen during stock market panics:

1 Rally and 3 Months Ago: Extreme Fear

Meanwhile the bastion of basic financial thinking, MarketWatch.com,… Read more

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Forget the Banks: These Lenders Dole Out Dividends up to 10.1%

America’s in a dividend desert, and that’s forcing income hunters to get creative. Are 10.1% paying mREITs the answer?

The S&P 500 hasn’t yielded this poorly (1.7%) in roughly a decade. T-notes deliver a fractional yield. Worse, even areas of traditionally elevated yield are offering just so-so payouts right now. At less than 4% on average, high-yield stocks and real estate investment trusts (REITs) will put retirement investors well short of their income goals.

The good news? A pair of market niches—business development companies (BDCs) and mortgage REITs—can put 3x that amount of money into our pockets.

I recently pointed readers to a “3-click” BDC portfolio yielding 10.9%, which is a little less than the BDC average of 12%.… Read more

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Danger: Three 9%-18% REIT Dividends Won’t Last Long

Most dividend investors understandably love the idea of an 8% No Withdrawal Portfolio. It’s a simple yet “game changing” idea that you don’t hear much from mainstream pundits and advisors.

Find stocks that pay 7%, 8% or more and you can retire comfortably, living off dividend checks while your initial capital stays intact (or even appreciates).

Now this strategy is a bit more complicated than simply finding 8% yields and buying them. Granted the recent stock market pullback has benefited investors like us because we can snag more dividends for our dollar. Yields are higher overall, and that’s a good thing.… Read more

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13 Sky-High Yields of 7%-Plus: 4 Bombs, 9 Buys

What do most exchange-traded funds (ETFs) and many blue-chip stocks have in common?

They’re big, they’re popular with Wall Street pundits … and they don’t deliver nearly as much income as investors need to retire.

Not even close.

I want to share some ugly and eye-opening numbers with you about the skinflint ETF industry. I recently dug into the 100 most popular funds by assets under management, and here’s what I found:

…
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Ditch These 5 REIT Duds, Grab This Bargain-Priced Pair Instead

Real estate investment trusts (REITs) are one of the market’s best sources of high yield. But they can also be one of its searing sources of heartburn.

For your sanity’s sake, and for the good of your retirement savings, avoid the five high-yielding REITs I’m going to warn you about today. Then reinvest that money into the sure-fire 8% yielders I’ll highlight after that.

REITs are set up, by design, to be income powerhouses. That’s the deal. They get to evade Uncle Sam, and in return, they have to funnel the lion’s share of their profits to shareholders. But a mandate only goes so far – if a REIT has less cash to redistribute, simple math says you and I suffer.…
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These Fat 9% to 24% ETF Yields are Traps

I told you that the Infracap MLP ETF (AMZA) was a dog. Well, the fund just cut its dividend by 37%.

This is one of the biggest ETF payout cuts in recent memory, and it’s a gut punch to shareholders who rode out massive underperformance for the income tradeoff. That payout mattered. Just look at the difference between price returns and total returns in the chart below:

Just because a yield is wrapped in a fancy ETF wrapping doesn’t mean it’s safe.

This ETF dividend slash could be the first of several. So let’s talk about three ETFs – which pay between about 9% and 24% – whose dividends are far from secure.…
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5 “Dumb Money” Funds Paying Up to 8.4% (Sell Them Now)

Exchange-traded funds (ETFs) tend to have low fee structures. And when investors try to combine ETFs with their high yield needs, they usually get what they pay for.

ETFs, simply put, are often “dumb money.” Their current yields may look good, but their long-term strategies are usually flawed.

Here are five funds paying up to 8.4% that are too dumb to trust with your retirement money.

iShares International Preferred Stock ETF (IPFF)
Yield: 4.1%
Expenses: 0.55%

International dividend stock funds typically sport similar if not higher yields than their domestic brethren, so you would imagine there would be a similar advantage in foreign preferred stocks.…
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5 Risky REITs to Sell Immediately, 2 Bargains to Buy Instead

If you hold any of these five risky REITs, you should sell them immediately. And put that money into two recession-proof bargains (paying up to 8%) that we’ll discuss shortly.

REITs aren’t always as safe as their dividends appear on paper. Consider Investors Real Estate Trust (IRET), which slashed its dividend by nearly half late last year. This wasn’t a sudden decision – it followed years of share declines as falling oil prices crushed rents across IRET’s markets.

IRET has now lost 40% in four years and seen its high-single-digit yield reduced to less than 5%. Even IRET’s brief recovery after the dividend cut has withered away, and shares are off double digits in 2017.…
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