Utility CEFs: An 8.1% Shield Against a Stock Market Crash

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Utility CEFs: An 8.1% Shield Against a Stock Market Crash

The average S&P 500 drawdown during a recession since 1990 is 40%. Recent economic data show that we are now careening towards a slowdown. Check out the bearish trends from Atlanta’s GDPNow forecast:

Treasury Secretary Scott Bessent is standing watch as DOGE shifts resources and money away from the public sector. The Secretary needs lower long-term interest rates so that he can sell bonds without breaking Uncle Sam’s bank!

How does this work? Last month alone, DOGE chopped 63,000 jobs. Bessent welcomes this softening of the labor market—increasing the available labor supply—because he has $9 trillion in federal debt to refinance this year.… Read more

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This 7.6% Tariff-Proof Payout Shrugs Off Geopolitics

Uncertainty appears to be the theme of 2025. From tariffs to geopolitics, we have a nonstop flow of news that has vanilla investors quite rattled.

CNN’s Fear and Greed Index dipped back into the Extreme Fear zone earlier this week. Markets don’t like ambiguity. But that does not mean that we income investors need to sell everything. Heck, or anything! This is a split stock market and we contrarians are rolling with the dividend victors.

The bifurcated financial landscape is not news to us. We discussed the likelihood of major “winners and losers” in Trump 2.0 immediately after the November election:

Things have the potential to get wild.

… Read more

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This 7.6% Dividend Is the Ultimate “Sleeper” Play on the Tariff Panic

Bonds (and bond proxies) are hated right now. That’s our shot at big dividends—because mainstream investors’ thinking here is totally backward.

We’re going to pounce, and use this opportunity to grab ourselves a huge 7.6% payout sporting an unusual “discount in disguise.”

Tariffs: Don’t Believe the Hype

The reason for this opportunity comes back to tariffs—which I admit, dear reader, I’ve heard so much about that I’m starting to dream about them at night!

The badly flawed logic most people are applying to tariffs is this: Tariffs will drive up prices, adding to an inflation rate that, according to last week’s CPI report, hit 3% year over year, up from 2.9% the month before and a mere 2.4% in October (and was ahead of expectations, to boot).… Read more

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3 Contrarian Picks for Trump 2.0 (Yields Up to 7.5%)

At times like these, I’m reminded of a quote from Howard Marks, the most successful value investor you’ve likely never heard of. (Warren Buffett is a fan.)

Marks’s monthly “Oaktree Memos” are well worth a read. And in his insightful book, The Most Important Thing: Uncommon Sense for the Thoughtful Investor, he wrote:

“What’s clear to the broad consensus of investors is almost always wrong.”

This quote has been on my mind lately because everyone is convinced that Trump 2.0 will lead to higher inflation.

I’m sure you can see where I’m going: Higher inflation begets higher interest rates.… Read more

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I SPY a Laggard: 5 Divvies Up to 9.2% to Buy Instead

Be honest. I won’t be mad, but just admit it.

You’ve got some SPY in your portfolio. So much in fact you’re probably trying to quickly change the subject from the SPDR S&P 500 ETF Trust (SPY).

I’m not mad. (I’m just disappointed—ha!) We refer to SPY as “America’s ticker for a reason.” It is everywhere.

And it’s OK. Really it is. Holding SPY has worked out this year. But we’re now at an inflection point—which is why we are having this conversation.

Only three stocks account for 21% of the S&P 500. Apple (AAPL), Nvidia (NVDA) and Microsoft (MSFT) determine the entire market’s moves!… Read more

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Perfect Pullback Play with a Safe 8.4% Payout

Some are fast. Some are slow.
Some are high. Some are low.
None of them is like another.
Don’t ask us why, go ask your mother.

– Dr. Seuss

Here at Contrarian Outlook, we prefer slow—as in slow-moving share prices. And high—as in high yields.

As to why, well, I need to address why other (less sophisticated) investing websites have bad information regarding a very good fund. So bad, in fact, that vanilla investors are scared to buy this perfectly safe 8.4% dividend!

Before I send you to ask your mother, I’ll explain why our website is right and other websites are wrong.… Read more

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2 Safe “Retirement-Maker” Dividends Up to 8.6% Paid Monthly

Would you believe, my fellow contrarian, that most of our vanilla income friends settle for utility dividends that pay quarterly?

Ha!

Unfortunately (for them) that’s no typo. There are millions of investors just like them who are OK being paid every 90 days.

Yes, ninety!

Obviously, they don’t read highbrow publications like Contrarian Outlook, where we highlight monthly dividend payers. Today we’ll discuss two that pay 8.3% and 8.6% respectively.

With yields like these, we can actually retire on dividends. Take a chunk of money that we’ve saved up and convert it into regular cash flow. A million dollars, for example, can become $83,000 or $86,000 annually in dividend income.… Read more

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Toss the Spreadsheet! Here’s How to Manage Your Dividends Like a Boss

Three weeks into 2024 and here’s the state of play: rates have fallen and likely headed lower. That’s going to light a fire under our favorite dividend payers.

It already has!

Think back three months, to mid-October. Back then, 10-year Treasury yields sat at just under 5%. Now they sit at 4.1%—a 19% drop! It’s been great for our dividend payers, as income-hungry folks start to look for other options.

That shift has just started, and it’s got plenty more room to run.

Consider the 8.5%-paying Cohen & Steers Infrastructure Fund (UTF), a closed-end fund (CEF) that’s a classic dividend play, holding shares of “recession-resistant” utilities like NextEra Energy (NEE) and Southern Company (SO).… Read more

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These 8%-Paying Funds Are “Must Buys” in 2024 (With 1 Critical Caveat)

If there’s one thing we need to remember when we buy high-yield closed-end funds (CEFs), it’s this: always demand a discount.

Well, make that two: always demand a high dividend, too! Because CEFs are renowned for their high—and often monthly—payouts, with the average CEF yielding around 8% today.

But back to discounts. Luckily for us, they’re common with CEFs: of the 422 CEFs tracked by the CEF Connect screener, 384 trade at discounts to net asset value (NAV).

That’s a great place to start our search for top-notch CEFs, because these discounts are basically free money: they let us pick up, say, Mastercard (MA) for 85 cents on the dollar through a CEF like the Gabelli Dividend & Income Trust (GDV).… Read more

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How to “Refinance” Your Dividends (for Cheap 8%+ Yields)

Were you able to refi your home when rates were low? I hope so.

Don’t tell my wife, but we almost missed the low-rate era. My better half kept asking about refinancing. “Yeah, yeah,” I said. “We will when rates bottom.”

In early 2021, they took off right under my nose. I stare at the bond market all day and nearly missed this thing!

Fortunately, we got a pullback in rates. I called my buddy, a mortgage broker, who dialed me in with a sweet 2.2% rate on our remaining balance. Two point two!

Had we missed that deal, I’d never live it down.… Read more

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