Shocker: These “Safe” 7% Dividends Will Lead the Market (Down)

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The Contrary Investing Report > NYSE:XLU

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

Read More

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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If you’re still fearful about stocks as we pick up the pieces from the market’s grim October, let me ease your mind with one chart:

Stocks Still a Long-Term Winner

As you can see, that’s the market’s return over the last 10 years. As you can also see, stocks have returned nearly 2.5 times a person’s original investment in just a decade! Few other investments can make that claim.

The real problem? Income.

The average S&P 500 stock pays a lousy 1.9%, but let’s say you need 8% of your portfolio in monthly income to pay your bills in retirement. If you buy the popular SPDR S&P 500 ETF (SPY) and withdraw 8% monthly, you’ll be forced to sell in a falling market like the one we’ve seen.… Read more

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Remember seven months ago, when investors were freaking out over North Korea and a future trade war?

They were also wringing their hands over popular volatility funds like the VelocityShares Daily Inverse VIX (XIV), which blew up in February and destroyed millions of dollars of invested cash.

All of these shocks sent the S&P 500 tumbling over 10% in a matter of days!

But if you sold off then, you missed out on huge profits:

The High Cost of Giving in to Fear

This chart makes it pretty clear that dumping stocks on scary headlines is a terrible idea. But that doesn’t stop a lot of investors from making this same mistake over and over.… Read more

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