Warning: This 6.6% Dividend Will Crumble With Interest Rates

The Contrary Investing Report

Investing and Trading News, with a Contrarian, Sarcastic Twist!

Warning: This 6.6% Dividend Will Crumble With Interest Rates

Until about a year ago, the most common question I got from readers was always something like: “How will rising interest rates affect my portfolio?”

The question looks simple, but the answer was not, and in 2015, when the Fed said it would start hiking rates (the first hike came in December of that year), plenty of panicked investors sold (despite my advice at the time):

Short-Term Rate Fears …

What this chart really meant is that these short-term panickers gave patient investors a great buying opportunity, as the next chart shows:

… Set Up Longer-Term Gains

But the folks who sold right around the time of the first rate cut missed out because they feared the Fed.… Read more

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5 Dividend Stocks That’ll Keep You From Drowning in Retirement

Your 2% bonds are going to make you broke. You need to buy these safe, higher paying dividends instead.

We’ll get to these “real yields” (up to 9.3%!) in a moment. First, let’s recap. Treasury yields just took their biggest bath in weeks, sending the 10-year T-note to 2%. Less than a year ago, the 10-year was flirting with (a not exactly nosebleed) 3%.

And now that Fed chair Jay Powell has fallen in love with the doves (whether by choice or by force), he’s going to keep rates low for a long time. Which means bonds will have no place in a retirement portfolio geared towards income.… Read more

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Why These 3 Funds Are Getting Crushed (and what to do if you own them)

There’s a very easy (and costly) mistake you can make when picking funds. And plenty of folks make it every day.

These investors run up on the rocks because this error looks like a good idea, until you dig just a little bit deeper.

Today I’m going to show you exactly what this mistake is and reveal three laggard funds that just might tempt you into making it. The worst part? They don’t even pay you a dividend for your trouble!

First, the mistake itself: I’m talking about choosing a fund because it has one big winner in its portfolio.

Sound like nonsense?… Read more

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981 Risky Bonds to Sell, 400 Safe Ones to Buy Instead (for 7.7%)

Be careful how you buy your bonds. The most popular tickers have a few “fatal flaws” that’ll doom you to underperformance at best, or leave you hanging in the event of a market meltdown at worst!

Let’s pick on the widely followed and owned iShares iBoxx High Yield Corporate Bond ETF (HYG) as an example. It has attracted $15 billion in assets because:

  1. It’s convenient – as easy to buy as a stock.
  2. It’s diversified (for better or worse, as we’ll see shortly) with 981 individual holdings.
  3. It pays–5.6% today, to be specific.

The accessibility of funds like HYG appears cute and comfortable enough.… Read more

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My Personal 5-Step Plan for 8%+ Dividends in CEFs

If you’re sitting in “dead money” Treasuries and CDs, the dawn of a new round of interest-rate cuts is probably the last thing you want to hear.

Since Federal Reserve Chair Jerome Powell’s “pivot” on rates in early January, the yield on the 10-year Treasury has plunged, from 2.7% to 2.0%.

So if you put a million bucks in Treasuries at the start of the year, you’d be banking $26,900 in income. That’s pathetic enough for a seven-figure nest egg!

But fast-forward just six months, and your mil fetches you far less: just $20,100.

Powell Will Spark a Stampede Into These 8% Dividends

With Treasury rates collapsing and the stock market soaring—driving S&P 500 dividend yields down to a lame 1.7%—there are few places for income-seekers to turn.… Read more

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How to Squeeze a 13.6% Dividend From Gold (No One Does This)

Let’s face it: you hardly ever get decent income from commodity stocks. And when you do, these payouts are usually first to get the axe next time, say, oil nosedives.

And with oil doing this…

Oil Falls—Oil Companies’ Profits to Follow

… you may worry that it’s about to get harder to squeeze income out of oil companies.

Still, if you’re worried about inflation or the Federal Reserve distorting markets, or if you just want to hedge your stock portfolio, you’ll likely turn to commodities at some point. And there’s no more established inflation hedge than gold.

There’s just one problem: gold doesn’t produce anything.… Read more

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Cash Grab: 3 Beaten-Up Big-Yield Contrarian Plays

Seven percent dividends.

That’s what my 18 favorite stocks and funds yield on average in my “No Withdrawal” Retirement Portfolio. And it’s that very yield that gives the critically-acclaimed portfolio its name. Investors collect so much income every month that they don’t need to pull out their nest egg to make ends meet.

The regular dividend checks pay the regular bills.

That yield, by the way, was higher just a few months ago, but as prices go up, yields go down … and prices across the portfolio have been going up, up, up!

That’s no happy accident—that’s a vital component to a successful retirement portfolio that many advisors and financial pundits too often miss.… Read more

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This 6.5% Dividend Loves a Market Meltdown

Today I’m going to give you a strategy—and a strong 6.5%-yielding fund—that both shine when the market throws a tantrum.

And both are way better than what most people do when things get rough: cash in.

Many studies have shown that trying to time the market simply doesn’t work. And even if you did have the superhuman ability to get in and out perfectly, you’d still underperform a buy-and-hold approach. Thanks to compound interest, keeping skin in the game is more important than trying to save your skin.

Options: Your (Surprising) Friend When Markets Roil

Instead of fruitlessly trying to time the market, we’re going to do something that actually works (and takes far less effort!).… Read more

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Here’s How I’m Investing for 6% Dividends and 852% Gains

Think it’s impossible to bag 852% gains and a 6% dividend in one stock?

It’s not only possible—it’s easy! I’m going to give you the three (and only three) simple steps you need to do it yourself today.

Let’s start with the one thing we’re not going to do: follow the “buy and hope” crowd into a fanboy (and girl) favorite like Netflix (NFLX).

In search of big gains, first-level investors crowd into a non-dividend-payer like Netflix, simply because it’s delivered stunning growth in the past. And they almost always dive in when the stock is at the height of its popularity, like last July, when NFLX was scraping all-time highs.… Read more

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Warning: These 10 Funds Could Pull a 2008 Repeat (sell now)

I want to show you 10 funds that yield up to 9.4%—and that you should sell now (or steer clear of if you don’t own them).

Of course, near-10% yields are attractive, and I often see attractive funds yielding as much as (and more than) the 10 funds I’ll reveal in a second. But sometimes a big yield is too good to be true, and that’s the case here.

The reason I’m saying this now? These funds have been on a tear in the last few months, which is far out of character for both them and their asset class.

I’m talking about utilities funds.… Read more

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