These “Fed-Fueled” Dividends Whip Inflation, TIPS

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Are the best things in life actually free? It depends how we handle the hidden costs.

Free coffee is good. At home, I drink one mega-cup per day. At fixed income conferences, I typically scale that “complimentary” consumption up to double-digits per day. (Hey, they’re just hotel cups.)

Free breakfast is usually better than just free caffeine. And open bar, of course, reigns supreme for your income strategist.

No doubt these freebies are baked into ticket costs, but I will gladly accept the bacon and beer challenge to get my money’s worth.

When readers write in to ask my thoughts on “risk free” yields on certain bonds, it’s time for us to talk.… Read more

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If you’re a regular reader, I owe you a big congratulations on the recent profits in your dividend portfolio.

Some of you are banking big yields. Others are riding dividend magnets to capital gains. A select group of savvy contrarians are profiting from payouts and price upside.

The result of your mini windfall, regardless of source, is cash. But this pile of money is not yet generating any income for us. So, what is the best way to employ these greenbacks? We have three options:

  1. Reinvest the dividend money automatically via DRIPs,
  2. Deploy the profits strategically via smart shopping lists, or
  3. Stack the dry powder for a special moment.

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On Sunday night, our old friend exclaimed to my wife and me: “How have you all been??”

It’d been, well, almost a year since we’d been to her bar. We had plenty to catch up on with our drink-slinging pal as we sipped and snacked. Back on the home front, our babysitter had recently resurfaced and appeared to have bedtime under control. It was nice to have a throwback evening, the type we all took for granted just 12 months ago.

In the interim, many income investors have, likewise, taken low long-term rates for granted. Not we contrarians, of course.… Read more

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This time last week, we talked about my favorite dividend stock for 2021. The stock yielded 6% as recently as June, but it (deservedly) gained a following among income investors in recent months.

These newcomers bid its price up (again, deservedly). In doing so, its yield shrank below 4%, and I recently found myself apologizing to my Contrarian Income Report subscribers for discussing a stock that paid so little by our admittedly lofty standards.

Well, I’m glad I brought it up to them and to you in these pages last week, because Synovus (SNV) soared 11% over the next three days.… Read more

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A reader recently wrote in to ask:

Brett, if you could only invest in one ticker over the next year, what would it be?

I’d buy a stock backed by three financial trends that are likely to gain more attention in the months ahead. Definitely the type of firm that is due to dominate the “narrative” in 2021.

Don’t worry, this won’t simply be a story stock. Because it’s me, we’re also requiring value and, most importantly, yield with our storytelling.

So let’s start spinning the yarn. We’ll begin with Fed Chair Jay Powell and his prolific printing machine.

2021 Narrative #1: Money Printing

Powell has put on quite the show of late.… Read more

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The mainstream crowd has gotten way too greedy—which means we could be in the teeth of a stock-market selloff within weeks.

Most folks hear the word “selloff” and gasp. But not us contrarian dividend hounds! We know that volatility is our friend. It’s easy to see this just by looking at what the market’s done in the last five years. You’d have amped up your performance a lot just by buying the dips.

Buy and Hold? Nah. The Timing of Your Buys (and Sells) Matters

This year is a classic example. If you’d bought the typical S&P 500 stock on the first day of February, pretty much at the go-go peak of early 2020, you’d be sitting on a 15% total return now.… Read more

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Earlier this year, we added Synovus (SNV) to our Contrarian Income Report portfolio. We’ve enjoyed 36% total returns—including a couple of fat dividends—in the six months since. On a yearly basis, these gains annualize to 75%.

“Can we do this every time?” subscribers have asked?

That’s asking a bit much, but it doesn’t hurt to ask. (My young daughters know this well, because they are not shy about asking to eat ice cream at every meal!)

After all, if we reach for 75% yearly gains and have to “settle” for 17.5% profits, we’ll take that. It’s really about the process and stacking the probabilities in our favor on each given dividend purchase.… Read more

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