How We’ll “Squeeze” the GameStop Drama for Safe 6.4%+ Dividends

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Over the last few days, my inbox has been filling up with questions from readers about how this GameStop (GME) drama will affect their dividends, their pensions and even their retirement.

Let me say off the top that if you’re invested in top-quality stocks and funds for the long haul, you have nothing to worry about. In fact, this entertaining episode in financial history has created a nice opportunity for us to add to our positions in high-yielding closed-end funds (CEFs).

We’ll dive into that in today’s column, along with the most common questions I’m getting about this unique time in financial history.… Read more

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Another year, another COVID relief package—$1.9 trillion worth this time. As the old saying goes, “A trillion here, a trillion there, and soon you’re starting to talk about real money!”

But what does this latest cash injection into the economy mean for our closed-end fund (CEF) returns in 2021? Let’s take a look, starting with the big-picture view.

The Extra Debt Is Manageable

The No.1 worry with all of this is that, with all the borrowing the government has done (a total of $6 trillion has been spent on stimulus so far), we’re going to be left with a crippling debt crisis.… Read more

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Let’s look at how we closed-end fund (CEF) investors can grab a healthy 6%+ dividend in this zero-rate world and dodge every retiree’s nightmare: that would be having your nest egg run out with years of retirement still to go!

We can pull this off in part because the dividend story is not as grim as most people think. In fact, S&P 500 dividend payments actually hit a new all-time record in 2020!

That’s right: in a year when many long-time dividend payers cut or suspended payouts, the market handed over the highest amount of dividends ever.

Popular Stocks’ Dividends Plunge, Then Rebound …

If you held an ETF that tracks the S&P 500 index, like the SPDR S&P 500 ETF Trust (SPY) or the Vanguard S&P 500 ETF (VOO), you might find this hard to believe, especially when the current yields on the typical S&P 500 stock dropped to its lowest point in a generation.… Read more

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If there’s one thing you can be sure of in investing, it’s this: alarmists—whether they’re bulls or bears—almost never get it right. And playing the contrarian angle is a great way to grab big gains and 7%+ dividends.

Think back to the days before the election: brokerages were warning of unprecedented volatility following the big day. I heard from some investors who sold most of their holdings right before voters went to the polls, terrified that uncertainty over the results would cause a crash.

Then something weird happened. The election ended, the result was close—and stocks surged.

Close Race = Big Gains

Why did everyone get it wrong?… Read more

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These days, I’m hearing from a lot of readers who are worried about this market rebound—and wondering whether they should buy high-yield stocks or sit on the sidelines.

They’re right to be worried—the S&P 500’s 19% surge (!) in the last 12 months has only been topped a handful of times in the last 20 years, and none of those 12-month periods saw a pandemic that shuttered the global economy.

Pandemic Strikes … Stocks Soar?

So what the heck is going on here? And how should you respond?

Well, here’s my (admittedly contrarian) take: the stock market should be at record highs, and you should be buying stocks now—especially high-yield stocks—as long as you choose the right ones, of course.… Read more

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Stocks have (shockingly) broken into the green for 2020 … but few folks are celebrating. That’s understandable: coronavirus cases are surging and another wave of lockdowns is a real possibility.

But there is good news here.

First off, I’ve found a “heads-you-win, tails-you-win” fund that’s perfect for these times. It pays a 7.5% dividend and boasts a portfolio of stocks we know well: Microsoft (MSFT), Apple (AAPL), Amazon.com (AMZN) and MasterCard (MA) among them.

Before we get to this fund, we need to take a close look at this levitating market so we can see exactly what it means for our portfolios as we move into the unpredictable back half of 2020.… Read more

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Stocks have (shockingly) broken into the green for 2020 … but few folks are celebrating. That’s understandable: coronavirus cases are surging and another wave of lockdowns is a real possibility.

But there is good news here.

First off, I’ve found a “heads-you-win, tails-you-win” fund that’s perfect for these times. It pays a 7.5% dividend and boasts a portfolio of stocks we know well: Microsoft (MSFT), Apple (AAPL), Amazon.com (AMZN) and MasterCard (MA) among them.

Before we get to this fund, we need to take a close look at this levitating market so we can see exactly what it means for our portfolios as we move into the unpredictable back half of 2020.… Read more

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Most of us know we need to stay in stocks through this crisis—but some days it’s easier said than done!

Let’s be honest: we could all use a break—a way to hedge against the nasty drops we see when we log into our trading accounts in the morning.

My first suggestion—try not to log into your account every morning! But if you insist on doing so, then my second suggestion is to take a close look at a popular hedging vehicle called a covered-call fund.

Covered-Call Funds: 6%+ Dividend With “Crash Insurance”

Covered-call funds are a kind of closed-end fund (CEF) that holds stocks but gives us an income stream we’d never see from an S&P 500 company—yields of 6% to 10% are the norm among covered-call funds.… Read more

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These days, we’re hearing a lot of pundits pontificating about which way the markets will go. But let me suggest something none of them are talking about:

What if stocks trade more or less flat for the next while?

It’s a contrarian call, to be sure, but there’s reason to think markets may be, well, kind of quiet in the coming days or weeks. And there’s a way we can squeeze a big 9.2% income stream out of just that kind of market.

The Flat-Market Theory

I know what you’re thinking: how on earth could stocks just hold their breath while America is on lockdown, possibly for a long time to come?… Read more

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There’s no doubt portfolios everywhere are whipsawing due to the selloff.

But I’ve got good news for you: going by the historical record, this pullback will likely be shorter than most people think, and if you buy now—particularly if you target a select group of high-yield stocks and closed-end funds (CEFs)—you’ll outperform your fearful friends when the bounce-back comes.

Meantime, you’ll open up a nice new income stream to meet your cash-flow needs today. It literally is the best of both worlds!

Let’s dive into what the facts say about this bear market’s duration. Then I’ll name two funds worthy of your attention now.… Read more

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