One Step for “Crash Insurance,” 3X Your Dividends

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The Contrary Investing Report > NYSE:SPY

Here’s a critical mistake anyone can make while hunting for big dividends in a market like today’s: you can buy the right stocks at the right times—and still lose money!

2020 is a good example: even though the S&P 500 is back now positive on the year, you almost certainly suffered some degree of the following wipeout, no matter which stock you would have bought at the start of 2020:

The Headache of Going All in on Stocks

Ask anyone and they’ll likely say the market has been totally unhinged this year; bulls will say stocks shouldn’t have fallen as far as they did in March, and bears will say they shouldn’t have recovered so quickly.… Read more

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With the S&P 500 yielding just 1.8%, and 10-Year Treasuries paying a pathetic 0.7%, many folks are getting desperate for income—and they’re falling for dangerous dividends like exchange-traded notes (ETNs).

Note I said “ETN” here, and not “ETF.” It’s a critical distinction—and overlooking it could cost you a fortune in gains and dividends.

A Crippling 70% Loss

To see how dangerous ETNs can be, consider the (now defunct) UBS Etracs Monthly Pay 2x Leveraged Closed-End ETN (CEFL), which I first warned readers about in October 2017. CEFL went on to be crushed by the S&P 500 from that first warning until the start of 2020.… Read more

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Has this market gone too far, too fast? Is another crash coming? And what the heck should we be buying now?

I’ll dive into all three questions today, and I think my answer to that last one will intrigue you: it’s a tech-focused closed-end fund (CEF) paying a growing 7% dividend! This under-the-radar fund also employs an unusual strategy that hedges its downside if we do get another pullback.

The One Number to Watch Now

Let’s start with where I see the market headed from here.

At its worst point in this latest crash, the S&P 500 lost about 30% of its value, and it did so in less than a month, only to begin recovering a few weeks later.… Read more

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Last Thursday was the sixth-worst day on record for the S&P 500 (according to information from Nasdaq Dorsey Wright). Was. It’s already down to seventh place (yikes).

On Monday, it was quickly eclipsed by the third-worst day ever for the S&P 500 on record. Even in 2008, we didn’t have a single down day as severe as either of these days.

In fact, we’ve only had selling pressure this intense happen twice in the post-World War II era. The first was the October crash in 1987, and the most recent was in the fall of 2008.

Believe it or not (and most did not at the time), both were actually buying opportunities.… Read more

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We named our income investing website Contrarian Outlook for times like these. When the rest of the world is selling everything, we are sorting through their hastily discarded dividend bargains.

Sales like this don’t happen every year. In fact, the last blue-light special actually began to wind down the last time I reminded readers to “keep calm and 8% on.” It was December 26, 2018, and the stock market had just plunged nearly 20%.

Fear was rampant, which meant it was time for us contrarians to be greedy. Or, at minimum, not panic.

I don’t take the responsibility of being your Chief Investment Strategist lightly.… Read more

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There’s a way you can buy into today’s healthy real estate market without paying full price. In fact, you can get in for a lot less—I’m talking 16% below market value.

This may sound impossible, but it’s easy to do with closed-end funds (CEFs). That’s because there’s a CEF that invests only in real estate, and its market price is actually 16% lower than the value of its portfolio of assets. There’s much more to this fund, too. Not only does it hold a diversified real estate portfolio, but it also pays out a 5.9% dividend that’s risen 73% in the last decadeRead more

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It’s a tired piece of “wisdom” you hear from personal-finance gurus over and over: you need to invest in low-cost, passive index funds to get the highest return.

Too bad it’s completely false!

Today we’re going to look at how obsessing over fees can actually cost you tens of thousands of dollars. Then I’ll name a fund that could get you big gains and pays a dividend north of 6%. What’s more, this unusual fund, a closed-end fund (CEF), to be specific, gives you that steady cash payout while holding some of the biggest stocks out there—I’m talking about household tech names like Apple (AAPL) and Amazon.comRead more

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Today we’re going to talk about the biggest threat to your portfolio (and dividends!) you face in 2020.

It’s not a recession. It’s a near-irresistible human impulse—purposely amped up by the financial press—that could lock in big losses for you, or cause you to miss out on a huge gain, like the 486%+ some investors left on the table.

Let’s talk about that now. It starts with all the doom-and-gloom stories you’ve likely read about a looming market crash lately. (They’re hard to miss: you can find at least one on most major news sites every day.)

First off, don’t believe the hype: truth is, there’s a lot of data saying we aren’t anywhere near a downtick, let alone a full-blown once-in-a-lifetime collapse.… Read more

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The way to protect your portfolio isn’t large caps–it’s large yields. And the very best ones often come in small packages, such as the three “underappreciated dividends” yielding up to 15% that I’m about to show you.

I’m talking about funds that pay big, secure dividends. When pullbacks happen, these funds’ prices don’t move thanks to their yields. After all, a 15% annual payout (like the one we’re going to discuss shortly) buffers your portfolio against plenty of market volatility.

Here’s an example. Let’s consider Wall Street’s temper tantrum from late 2015 to early 2016, which greeted our launch of the Contrarian Income Report service focused on dividends that are big enough to retire on.… Read more

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“Buy low, sell high.” It’s the oldest investor slogan there is—and the deadliest one, too!

You simply cannot afford to give in to this “wisdom” today, even though it’s tempting. Now that we’ve seen a couple of days of weakness, you might be wondering if the recent all-time high was a sign to sell—and if all-time highs are often signs to sell. But do that now and you’ll certainly leave huge income—and upside—on the table.

Instead, now is the time to buy, especially closed-end funds (CEFs) paying dividends of 7% and up. I’ll give you an example of one of these high yielders—which drops its payout into your account monthly—further on.… Read more

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