Buy and Hold Forever: 7 Safe Yields Up to 7%

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The Contrary Investing Report > NYSE:XLU

Have utility stocks been stripped of their safe-haven status?

I’ve fielded that question from a few readers who have rightly pointed out the utility sector’s unimpressive performance during 2020’s market rout and partial recovery.

The short answer? No, it hasn’t. At least not for those of us who look through short-term price jitters to lock-in long-term payouts.

Back in the “good old days,” utility stocks delivered enough income to actually retire on. And thanks to this once-in-a-decade panic, that’s the case once again. Even though utility stocks are well off their bottom, investors still can grab perfectly safe yields of up to 7% in the space.… Read more

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Until a flu-like virus emerged halfway around the world, it’s been three peaceful months since we’d seen a “1% up or down day” in stocks. As usual, the volatility inspired investors to reflect upon the advanced age (almost eleven years) of our current bull market.

To paraphrase the legendary rock band Chicago, does anybody really know what time it is in the rally right now? “Late cycle” is a popular guess. But how late?

Did the streetlights just pop on, or is it 2am with money managers stumbling into their taxis and Ubers outside?

Most rallies don’t make it to eleven, but then again, most don’t follow financial crises either.… Read more

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It’s easy to see why investors love utilities:

  1. Low volatility
  2. High yields

But there’s a problem: recent scares like the inverted yield curve mean some utilities, and utility funds, have gotten ahead of themselves and are more prone to a pullback than most folks think. (The three 7%+-yielding closed-end funds (CEFs) I’ll show you shortly top this “overpriced” list.)

The worst part is, many people think utilities are underbought, because the benchmark Utilities Select Sector SPDR ETF (XLU) is up 8.3% year-to-date, half the 16% gain of the SPDR S&P 500 ETF (SPY).

But that’s recency bias. Stretch the timeline to 12 months and things look very different:

Utilities Get Pricey

Interest-Rate Pause Should Boost Utilities.Read more

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The “yield curve” has inverted—and that could be terrible news for your dividends!

But don’t worry: there’s a “pullback-proof” way to keep your income and your nest egg secure—no matter if there’s stock-market fire behind all this yield-curve smoke.

Below I’ll reveal three stocks perfectly positioned for whatever lies ahead: if the market tanks, they’ll likely trade flat, thanks to their cheap valuations (and sturdy dividends).

And if it all turns out to be hype and the market keeps rolling higher? They’re poised to skyrocket while handing you a 7.1% average payout (with one of these stealth buys even throwing off an amazing 9.3% yield!).… Read more

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Oil prices have been locked in a tight range for five years—and I know I don’t have to tell you that this has been a disaster for energy investors.

Oil Fails to Launch

With the benchmark Energy Select Sector SPDR (XLE) unable to hold its gains for long (let alone recover to pre-crash levels), even the most conservative energy investor has been clobbered.

Why is this happening?

After all, you’d think a growing global population and emerging-market growth would drive up the price of a limited resource like oil. But the tables have turned. I’ll get into why shortly.

These Dividend Payers Are Better Buys Than Oil

For now, though, I recommend that income-seekers go a different route and pick stocks (and closed-end funds [CEFs]) that benefit from cheaper oil and gas—like utilities.… Read more

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Almost every corner of the market is overpriced today. That includes dividend stocks, which cost too much and yield too little.

The S&P 500 is at multi-year highs in almost every valuation metric: P/E, P/B, P/S … you name it. And a lot of that froth is coming from traditional income sectors. Yardeni Research’s latest sector study shows that utility stocks, for instance, trade at 18 times estimates, at the very high end of its 10-year range. The sector’s typically high yields, meanwhile, have dried up to a mere 3%.

Hey! Where’d the Dividends Go?

The real estate industry is getting pricey, too, with the iShares U.S.Read more

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Almost every corner of the market is overpriced today. That includes dividend stocks, which cost too much and yield too little.

The S&P 500 is at multi-year highs in almost every valuation metric: P/E, P/B, P/S … you name it. And a lot of that froth is coming from traditional income sectors. Yardeni Research’s latest sector study shows that utility stocks, for instance, trade at 18 times estimates, at the very high end of its 10-year range. The sector’s typically high yields, meanwhile, have dried up to a mere 3%.

Hey! Where’d the Dividends Go?

The real estate industry is getting pricey, too, with the iShares U.S.Read more

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It’s a proven way to get in on a closed-end fund (CEF) before its next huge surge: watch for the managers to buy shares of the fund with their own cash—then dive in right alongside them.

I’m telling you this now because one of the smartest minds on Wall Street just dumped a pile of his own money—$2.6 million, to be precise—into one of the funds he personally manages.

Such a brazen move by an insider is one of my favorite buy signals. Today I’m going to reveal both the investor and the 9.6%-yielding fund he just snapped up. Of course, we’ll also cover the many reasons why you should seriously consider copying his canny move now.… Read more

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If you’re like many income investors I hear from, you’re probably worried that 2019 is already shaping up to be a repeat of 2008. The media doesn’t help – the talking heads like to conjure up fear because it draws eyeballs to the TV screen and clicks to Internet articles.

But what if they’re right? In a moment we’ll discuss the safest dividends for a serious pullback.

First, let me calm you down and add that a 2008 rerun is not our most likely scenario. As generals tend to fight the last war, investors tend to fear the last bear market.… Read more

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Monday’s major jump in stocks is the beginning of a trend that will catch a lot of investors by surprise: fundamental strength thanks to trade war fears abating.

We aren’t out of the woods yet, as Tuesday showed us. While the market cheered the tentative cease-fire between Xi and Trump on Monday, the lack of details and confusion hit the market on Tuesday.

And that’s a good thing, because it’s set up investors for an opportunity to buy equities cheap before the relief rally around the corner.

Trade Ceasefire Opens Buy Window …

The way I see it, the trade-war ceasefire is likely the beginning of a deal coming down the pipe in the next three months.… Read more

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