This “Apocalyptic” News Is Our Shot at Cheap 7%+ Dividends

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This “Apocalyptic” News Is Our Shot at Cheap 7%+ Dividends

It’s starting again—the media has its hooks into a new story to scare investors, in yet another effort to gain attention.

The upshot is that we’ve now got a very nice opportunity to pick up a special kind of closed-end fund (CEF) that yields 7%+ and does something unusual to limit downside.

This setup reminds me just a bit of 2022, when buying fear gave contrarians bargains, and historically high dividend yields, too.

The Media-Driven “Crisis” That Doesn’t Exist

Let’s start to trace out our opportunity here by first talking about the media, which I probably don’t have to tell you is more interested in getting an emotional reaction (mainly fear and worry) out of its audience more than anything else these days.… Read more

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Why the Coming “Yield Crash” Will Send These 8%+ Payers Soaring

This market bounce is strangling the payouts on everybody’s favorite ETFs. But it’s also given us a sweet setup to grab another group of funds kicking out big payouts, to the tune of 8%+ yields.

Even better, many of these funds—wallflowers to “popular-kid” ETFs—were left off the invite list for the 2023 market party. That means they’re (still) cheap today.

I know an 8% payout has a lot of appeal to most folks, with Treasury yields now yielding around 4.3%. That’s not bad, but it doesn’t leave you much after you account for still-elevated inflation.

And if your cash is stuck in an ETF, you’re getting a lame payout, well, almost all the time, but especially if you buy now: the SPDR S&P 500 ETF Trust (SPY)—which, as the name says, holds the entire S&P 500 index—yields a sorry 1.3% as I write this.… Read more

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This Media-Driven Panic Has Put Our Favorite 7%+ Yielders on Sale

Don’t believe the media’s latest line that stocks—and by extension 7%+ yielding closed-end funds (CEFs)—are oversold.

Far from it!

Truth is, stocks—and bonds and real estate, for that matter—are still oversold as a result of the 2022 market crash.

You can see that in action in the chart below, with the benchmark ETF for the S&P 500 (in purple) up 11.1% since the start of 2022, while corporate bonds (in orange) are basically flat. And real estate investment trusts (REITs)—in blue—are still in the tank, down about 16%.

Don’t Believe the Hype: All Our Favorite Assets Are Still Cheap

Fact is, those are all low numbers, even for stocks: the S&P 500 is up an annualized 5.4% over the last two years and change since the start of 2022, which marked the beginning of the market’s swan dive.… Read more

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Let’s “Convert” Our Lame ETF Dividends Into Ironclad 8%+ Payouts

This market bounce is strangling the payouts on everybody’s favorite ETFs. But it’s also given us a sweet setup to grab another group of funds kicking out big dividends, to the tune of 9%+ yields.

Even better, many of these funds—wallflowers to “popular-kid” ETFs—were left off the invite list for the 2023 market party. That means they’re (still) cheap today.

I know a 9% payout has a lot of appeal to most folks, with Treasury yields now down to around 4%, not too far above inflation.

And if your cash is stuck in an ETF, you’re getting a lame payout, well, almost all the time, but especially if you buy now: the SPDR S&P 500 ETF Trust (SPY)—which, as the name says, holds the entire S&P 500 index—yields a sorry 1.4% as I write this.… Read more

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My #1 Prediction for 2024 (and Our CEF Dividend Strategy to Profit)

Today I want to go over what the economic data is telling us about the future of the financial markets in 2024.

Truth is, we are likely inching toward a recession, which means it’s time to be a bit more cautious. But at this point I only see us “backing into” a recession—and likely not till 2025, 2026 or maybe even later.

The upshot here is that when a recession does hit, we’ll want to make sure we have a steady income stream so we can keep on collecting our high payouts right through to the other side. As part of this strategy, we’re going to “lock in” the 8%+ yields (often paid monthly) available on some of our favorite closed-end funds (CEFs) while they’re still cheap.… Read more

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My #1 Prediction for 2024 (and Our CEF Dividend Strategy to Profit)

Today I want to go over what the economic data is telling us about the future of the financial markets in 2024.

Truth is, we are likely inching toward a recession, which means it’s time to be a bit more cautious. But at this point I only see us “backing into” a recession—and likely not till 2025, 2026 or maybe even later.

The upshot here is that when a recession does hit, we’ll want to make sure we have a steady income stream so we can keep on collecting our high payouts right through to the other side. As part of this strategy, we’re going to “lock in” the 8%+ yields (often paid monthly) available on some of our favorite closed-end funds (CEFs) while they’re still cheap.… 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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3 Strategies for a Flat Market (and a 12.8% Payer for Whatever Comes Next)

There are reams of investment strategies out there for maximizing gains in a rising market and protecting ourselves when stocks tumble. But what do we do when markets simply grind sideways?

That’s what we’re going to delve into now, with three potential moves. Our favorite of these three involves buying a closed-end fund (CEF) yielding 12.8% with a payout that’s actually grown over the long haul.

September Swoon Not Unusual

So far this year, we’ve seen the S&P 500 come close to recovering 100% of its losses from last year, only to pull back in recent weeks. Even though this has made for a bit of a stressful September, it’s pretty normal; market recoveries often result in a slow and tentative return to a previous all-time high.… Read more

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These 8%-Paying Funds Are Doing Something Truly Bizarre

When I explain the appeal of closed-end funds (CEFs), I usually start with the big headline and throw a few bullets afterwards, kind of like this:

CEFs yield an average 8%, and many of those dividends are sustainable and growing.

  • CEFs invest in a variety of reliable and popular assets, like stocks, bonds and real estate investment trusts (REITs).
  • CEFs often trade at discounts to the value of their portfolios. This is known as the discount to net asset value (NAV), and it means we can buy stocks, bonds and real estate through CEFs for less than we’d pay on the open market.

… Read more

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“Soft Landing” Ahead? I Think So. Here Are the 6.8%+ Dividends to Buy

One of the most difficult things for me in 2022 was that, with all the doom and gloom in the air, I heard about a lot of people giving up on the dream of financial independence.

The worst part was that they were doing so at exactly the wrong time—right when the market decline had driven the yields on our favorite closed-end funds (CEFs) way up. Even now, after the S&P 500 has posted roughly 15% gains in 2023, as of this writing, plenty of CEFs yield 10%+, including nine in the portfolio of our CEF Insider service.

Worse, these folks were doing it because they’d bought into the media’s false narrative that a recession was looming, a trap I regularly warned about falling into here on Contrarian Outlook and in the pages of CEF Insider.… Read more

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