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

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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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An Ingenious “Hack” That Turns a 1% Dividend Into 6.8%

Our man Jay Powell is talking a little more about raising rates. Right on cue, stocks have dropped, and dividend yields have popped!

Our contrarian buying opportunity is here.

But wait. Even with the latest pullback, the yields on the popular names of the S&P 500 are still only 1.3%. And how can you call the S&P 500 cheap when it still trades at a nosebleed P/E of 37?

You can’t.

But lucky for us, there are always overlooked assets out there. To find them, we’re going to skip the S&P and go with another acronym: “C-E-F,” for closed-end fund.

If you’ve heard of CEFs, you know that they’re famous for huge dividends.… Read more

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CEF Investors: Here’s What to Buy in This Levitating Market

One of my favorite quotes about closed-end funds (CEFs) comes from Richard Thaler. When writing about why investors bought some CEFs for more than they’re worth, he simply said: “There are idiots,” and that this was “the only satisfactory answer to this … puzzle.”

That, er, very direct, quote comes to mind now because these days, it’s actually pretty easy to pick up CEFs (which yield around 7%, on average) trading at nice discounts to net asset value (NAV, or the value of their underlying holdings). There are literally hundreds of examples, some of them extreme.

The most discounted equity CEF trades at a whopping 26.7% discount as I write this.… Read more

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It’s Never Been Easier to Retire on Dividends (Can Be Done on $600K)

Let me start with a special shout out to our dedicated readers at Barron’s. Here at Contrarian Outlook, we’ve been drawing up the playbook to retire on dividends for years (Two years ago, we literally wrote the book on the retirement strategy.)

So it was a hoot to see Barron’s run a cover story about retiring on dividends. But I have a bit of constructive criticism about the piece: the dividend stocks highlighted in the feature article had yields too low to actually retire on.

The magazine’s 10 buys included Coca-Cola (KO), International Business Machines (IBM) and Johnson & Johnson (JNJ) and had an average current yield of 4.1% between them (as of the time the piece was written).… Read more

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It’s Never Been Easier to Retire on Dividends (Can Be Done on $600K)

Let me start with a special shout out to our dedicated readers at Barron’s. Here at Contrarian Outlook, we’ve been drawing up the playbook to retire on dividends for years (Two years ago, we literally wrote the book on the retirement strategy.)

So it was a hoot to see Barron’s run a cover story about retiring on dividends. But I have a bit of constructive criticism about the piece: the dividend stocks highlighted in the feature article had yields too low to actually retire on.

The magazine’s 10 buys included Coca-Cola (KO), International Business Machines (IBM) and Johnson & Johnson (JNJ) and had an average current yield of 4.1% between them (as of the time the piece was written).… Read more

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How to Invest in Tech Like a Baller (6.3% dividends, 15% upside)

Tech stocks have finally taken a breather—and we’re going to pounce on this dip—and grab a rare “double discount” while we’re at it.

The strategy we’re going to use also lets us “squeeze” the biggest tech names for payouts that are unheard of in the sector—I’m talking yields up to 6.3%.

Mom’s Coupon-Clipping Goes High-Tech

This approach is an ode to my mom who, to this day, refuses to pay the sticker price. If there’s a coupon to be found, she’ll find it and find another coupon to secure a double discount—even if it requires management approval to apply!

The dividend equivalent of the back-to-back coupon is buying discounted closed-end funds (CEFs) after a pullback, and that’s exactly the setup we’ve got in tech now.… Read more

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This Lets You Buy Apple at October’s Prices (With an 8.2% Dividend)

I sure hope you didn’t listen to the nervous Nellies who told you to pull your cash out of stocks ahead of the election. Since October 30, the S&P 500 has jumped more than 5%, as of this writing.

And remember tech stocks, the sector everyone seemed to be leaving for dead a few days ago? They’re up nearly 7%, going by the tech benchmark Invesco QQQ Trust (QQQ).

2020 Pulls a Fast One on Panic Sellers (Again!)

This is particularly painful if you’re a dividend investor. If you sold just a few days ago, you’re now forced to buy back in at higher prices—and lower yields!… Read more

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Here’s an Easy 8.5% Dividend (with upside) You Can Buy Now

Closed-end funds (CEFs) are the ultimate “sleeper” investment—if you hold them, you know they hand out massive dividends (7% yields, on average!). Plus, their often-discounted share prices set you up for serious upside, too.

But it looks like the mainstream crowd is about to crash our CEF party. That means if you’re not in now, this is the time to climb aboard, before our CEFs’ big discounts become a distant memory.

CEF Managers Put Out the Bait

Funnily enough, the ones drawing attention to CEFs these days are CEF managers themselves. According to The Wall Street Journal, these pros have been cutting their fees in a bid to draw in new investors.… Read more

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5 Stocks Set to Roar Into 2021 (and 8 Laggards About to Crash)

Sometimes, picking the best contrarian stocks can be fairly straightforward.

For instance, back in early spring, it seemed obvious to anyone who went a bit deeper than the daily headlines to see that the market wasn’t giving tech stocks their due, given its importance during the lockdown and its potential for big post–COVID-19 growth.

So in April I wrote an article that highlighted the Columbia Seligman Premium Tech Fund (STK), a closed-end fund (CEF) primed to benefit from surging online shopping, rising mobile data use and the fast shift toward working from home. Plus, STK yielded an outsized 9.4%, so you were getting a large part of your profits in dividend cash.… Read more

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This Little-Known Fund Turns a 0% Dividend Into an 8.5% Cash Stream

You can be forgiven for not looking to the big-name tech stocks for high dividends. Just look at this rogue’s gallery of pathetic payouts!

  • Facebook (FB): Dividend yield: 0%
  • Amazon.com (AMZN): Dividend yield: 0%
  • Apple (AAPL): Dividend yield: 0.9%
  • Netflix (NFLX): Dividend yield: 0%
  • Google, a.k.a. Alphabet (GOOGL): Dividend yield: 0%

Those are the so-called FAANG stocks—the darlings of the tech world. But they’re no place for retirees, or anyone else on the hunt for dividends. (Though there is one often-ignored way to get an 8.5% dividend from them; more on that in a second.)

Luckily for the folks who hold these stocks, which make up about 17% of the S&P 500, they’ve made up for their pathetic—or nonexistent—dividends in outsized price gains as the market has bounced back.… Read more

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