3 Steps for 6.1% Dividends, 243% Payout Growth (crisis or no)

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In normal times, real estate investment trusts (REITs) are a great way to cut your portfolio’s volatility—and double the income you’d get from regular stocks.

Of course there’s nothing typical about 2020, but this “new normal” actually presents an especially excellent opportunity to buy select REITs on the cheap. I’m talking about cash cows with rent flows that were not disrupted by shutdowns.

Cheap stocks with higher-than-usual yields and bulletproof cash flows? Read on and we’ll sign up for this deal together.

REITs, remember, are “no drama” pass-through investments: they collect the rent on their properties, take out enough to keep their buildings in good working order, then pass (almost all of) the remaining cash to you as dividends.… Read more

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This crisis has caused a lot of folks to develop a crippling fear when it comes to REITs: they see the beating mall owners like Simon Property Group (SPG) have taken and swear REITs off for good. 

To be sure, SPG took it on the chin in March, and has not gotten up:

Simon’s Business Model: Broken for Good

But way too many people think REITs are about shopping malls, and that’s about it. It’s too bad, because this first-level thinking causes them to miss out on a lot of upside—and dividend growth, too.

Beyond the Mall

Members of my Hidden Yields service know better: we wanted nothing to do with mall landlords before this crisis, because Amazon.comRead more

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I don’t know why you’d try to cobble together an income stream with miserly ETFs when, thanks to this selloff, we’ve got a huge sale on closed-end funds (CEFs) throwing off life-changing 7%+ payouts.

Why are CEFs a great deal now?

In short, the coronavirus scare has caused a “panic disconnect” between many of these funds’ share prices and the value of the assets in their portfolios, known as the net asset value, or NAV.

These discounts are a quirk that only exists with CEFs, and they make our plan simple: buy when discounts are particularly wide, then ride these markdowns higher as they evaporate—pulling the fund’s market price up with them.… Read more

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Let’s be honest: our lives would be much easier if we could just buy the typical S&P 500 stock, get the 7%+ dividends we need for retirement, and call it a day. Trouble is, the popular kids only pay high yields when the market’s in flames!

Like Pfizer (PFE), which yields a ho-hum 3.8% now. But if you’d bought when stocks bottomed during the financial crisis, you’d be sitting on a cash machine: back then (March 2009), Pfizer’s payout shot up to an incredible 11%!

Pfizer’s (Very) Temporary 11% Yield

Of course, you needed quick reflexes and nerves of steel to lock in that yield before it vanished in the rebound.… Read more

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Income hunters that made their way into real estate investment trusts (REITs) at the start of 2019 are rolling in more than rent checks right now. Not only did they enjoy the sector’s generous dividends, they enjoyed big price gains to boot.

Even the “dumbly indexed” Vanguard Real Estate ETF (VNQ) peeled off a sweet 28.9% in total returns last year. That’s its best showing since 2014, and more than double its average annual return of 11%-plus over the past decade.

But do these big 2019 gains mean that we’re due to regress in 2020?

I’ve previously warned about the dangers of holding REITs whose fundamentals are out of whack with its valuation.… Read more

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I run into far too many investors who think the best way to build their bond income is to buy through an ETF.

It makes sense. After all, buying corporate bonds “direct” means playing in the murky over-the-counter market, or forking over a hefty brokerage commission.

What’s more, the media—with help from ETF providers’ marketing departments—has most folks believing an “automated” ETF always beats a human manager.

So it follows that more people are buying ETFs like the Bloomberg Barclays SPDR High-Yield Bond ETF (JNK). With one click, you’re getting a portfolio of corporate bonds throwing off a nice 5.6% dividend yield—and charging just 0.4% of assets.… Read more

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Let’s brush aside some financial noise today, as I’d like to show you the best retirement investment you can make.

I’m talking about secure dividends that’ll grow every year, fund your regular expenses today, plus grow your capital so you don’t have to ever worry about running out of money.

You won’t have to worry about what the Fed says, either, because this worry-free strategy is ahead of Jay Powell and his crew. In fact, this “1-click” indicator not only tells you what to buy, but it nails the “when” better than any armchair (or professional) Fed watcher.

We’re going to use real estate investment trusts (REITs) as our vehicles of choice.… Read more

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The average American can’t afford to retire.

At the moment, the median balance among those 65 and older is $58,035, according to CNBC.  Averaged over a 20-year period, that’s only $2,901.75 a year. Worse, the median private pension is $9,376.  Social security averaged just over $1,400 a month in 2018.

You’d be hard pressed to find anyone that can live on that.

What makes the situation far more difficult is the state of the stock market.

It’s not as if you can depend on your average stock anymore.

With the trade war escalating, it’s been a confusing time for investors.

Contradictory claims from both sides have given way to extreme optimism, and pure grief when all goes south. … Read more

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Are you worried that you’re going to outlive your money? It’s a fair concern with interest rates low and heading lower.

To put it bluntly, many well-off retirees are at serious risk of having to pick up a “side hustle” to avoid dying broke. Passive income in the popular retirement “go-tos” is simply no help today, as the average S&P 500 stock pays a skimpy 1.9% now. Ten-year Treasuries? Even worse, at just 1.5%.

So unless you’ve got $2.1 million laying around to invest in the typical blue chip stock—enough to get you a $40,000 annual dividend stream—you’ll likely have to sell some of your stocks to supplement your dividend income.… Read more

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Quite often, investors come into the market with the false perception that making money is a guarantee.

However, many learn the hard way that’s not often the case.

That’s because they come into the market without a game plan.

And as any investor will tell you, that’s a bad idea — especially in today’s volatile market.

In fact, with markets saturated with fear over the trade war, and with an inverted yield curve pointing to a recession, you must have a plan.  After all, if you fail to plan ahead, you plan to fail.

If you want to do well in a fear-based market, plan ahead like a billionaire.… Read more

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