These “Active” 7%+ Dividends Crush Index Funds

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These “Active” 7%+ Dividends Crush Index Funds

You just can’t argue with the power of index investing, right?

After all, index funds boast ultra-low fees and simply track the market. And since stocks return about 7% per year on average, you should do well in the long run. Vanguard, founded back in 1975 on this very idea, built a massive firm (current assets under management: $7.2 trillion) on it.

And to be honest, for many folks, index funds do work. The company’s Vanguard S&P 500 ETF (VOO) is a go-to in the space, along with rival Select Sector SPDRs’ SPDR S&P 500 ETF Trust (SPY). (Though I always prefer VOO due to its lower fees; when you’re simply tracking the index, fees matter a lot.)… Read more

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How to Pick Winning CEFs (for 387% Returns, 7%+ Dividends)

Once folks get a taste of closed-end funds (CEFs), they typically rave about one thing: the dividends! Yields of 7% and up are common with CEFs, and they often come your way monthly.

We also love the fact that even though CEFs are a small corner of the market (with only about 500 or so out there), we can build a diversified portfolio with them: there are CEFs that hold US and international stocks, bonds, real estate—even private equity. You name it.

This broad range gets us around a problem most income-seekers face: being forced to stake significant sums in one, or a handful of, stocks just to get big payouts.… Read more

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What CEF Dividend Cuts Mean (It’s Not What You Expect)

Plenty of CEF investors worry about dividend cuts. And for sure, they’re something to keep in mind. But CEFs are not the same as stocks. When we invest in high-quality CEFs, there are a couple other things we need to remember when we catch wind of a cut:

  1. High-quality CEFs will sometimes reduce payouts by a small amount so they can redeploy capital into oversold bargains. I’ll have more to say on this in a moment, but the upshot is that it holds the potential for us to make more in gains from this move than we lose in dividends.
  2. As mentioned, these cuts are usually small, reducing the yield only a small amount (again, we’ll demonstrate this below).

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Make This Easy Mistake and You’ll Miss the Best 7%+ Dividends

When it comes to closed-end funds (or any investment, for that matter), it pays to look for things most people misunderstand. Because these (seemingly) tiny investor oversights and errors can give us keen-eyed contrarians our best buying opportunities.

And when it comes to CEFs, there’s one all-too-common mistake I see folks make time and time again, particularly those who are new to these high-yielding funds. To see what I’m getting at, let’s zero in on a CEF called the Columbia Seligman Premium Technology Growth Fund (STK).

STK Romps to a Triple-Digit Return

STK’s portfolio mainly consists of large-cap tech stocks: Apple (AAPL), chipmaker Broadcom (AVGO) and Microsoft (MSFT) are among its top holdings.… Read more

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3 Buys to “Squeeze” Amazon for an 8% Dividend

I’m always shocked when dividend investors ignore tech stocks. Which means I’m shocked a lot, because pretty well all income-seekers do it!

That’s because most folks still think of technology as the home of profitless startups, crumbling crypto platforms or zero-dividend names like Tesla (TSLA) and Amazon.com (AMZN).

But the truth is, big caps dominate the tech space, and on the whole, the sector is sitting on some of the biggest cash hoards on Wall Street. Apple (AAPL), of course, holds a legendary $202 billion. As of February, that amounted to more than 7% of the cash holdings of all S&P 500 companies!… Read more

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These Funds Will Crush ETFs in ’22 (and Pay You 7%+ Dividends)

If you invest in closed-end funds (CEFs), you’re already miles ahead of most folks. (And if you don’t, there’s never been a better time to try them—I’ll show you a tech-focused CEF whose payout triples the dividend on “regular” stocks in a moment.)

A Trillion-Dollar Monster

The main reason why most investors miss out on CEFs (which offer tantalizing yields of 7.3%, on average, as I write this), is that the CEF market is small, with only around 500 CEFs out there in total. Compare that to ETFs, which numbered around 7,600 last year.

In fact, last year, ETFs hit a big milestone: they attracted a trillion dollars in a single calendar year.… Read more

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How to Pick Winning CEFs (for 555% Returns, 7%+ Dividends)

Once folks get a taste of closed-end funds (CEFs), they typically rave about one thing: the dividends! Yields of 7% and up are common with CEFs, and they often come your way monthly.

We also love the fact that even though CEFs are a small corner of the market (with only about 500 or so out there), we can build a diversified portfolio with them: there are CEFs that hold US and international stocks, bonds, real estate—even private equity. You name it.

This broad range gets us around a problem most income-seekers face: being forced to stake significant sums in one, or a handful of, stocks just to get big payouts.… Read more

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These “Boring” 7.2% Dividends Demolished the Market (Plenty More Upside Ahead)

There are three funds hiding in plain sight that do something everyone thinks is impossible: pay huge dividends—with yields up to 7.2%—and deliver outsized 24%+ total returns, too.

I know I don’t have to tell you what an inflation-fighting weapon a return like that would be these days.

These are no less than the world’s three best-performing closed-end funds (CEFs) over the long term, and today we’re going to rank them from third to first to see if any (or all!) of them have a place in our investment portfolios.

“World’s Best” CEF #3: 24% Annual Returns for Years and Years

The least impressive CEF on the list, the Columbia Seligman Premium Technology Growth Fund (STK), has “only” a 23.7% annualized return, based on its market price, over the last five years, with a dividend that’s held steady throughout that time (and yields 5.1% today).… Read more

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Here’s a Canny Way to Buy the Tech Dip (and Grab a 5.6% Dividend)

Tech stocks have taken a header, and we contrarians are going to take advantage and set ourselves up for some serious upside—and 5.6% dividends, too.

Why are we zeroing in on tech now?

Because investors have been (wrongly) fretting over a 1970s-style inflation flare-up, and they’ve been (wrongly) taking it out on tech stocks over the last few weeks.

In a way, the selloff makes sense, as higher inflation, and the rising interest rates that come with it, cut into tech stocks’ profit growth—and investors look to tech mainly for that exceptional profit growth, which drives their share prices.

(Our favorite income plays, closed-end funds, or CEFs, let us take a different path, getting a big slice of our tech profits as cash dividends that we control, instead of less predictable price gains.… Read more

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447% Returns, 5.2% Dividends (Just by Avoiding This 1 Simple Mistake)

Once folks get a taste of closed-end funds (CEFs), they typically rave about one thing: the dividends! Yields of 7% and up are common with CEFs, and they often come your way monthly.

We also love the fact that even though CEFs are a small corner of the market (with only about 500 or so out there), we can build a diversified portfolio with them: there are CEFs that hold US and international stocks, bonds, real estate—even private equity. You name it.

This broad range gets us around a problem most income-seekers face: being forced to stake significant sums in single stocks just to get big payouts.… Read more

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