When Bonds Take Off, These “Preferred” Payers (Up to 9.4%) Should, Too

The Contrary Investing Report

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

When Bonds Take Off, These “Preferred” Payers (Up to 9.4%) Should, Too

Is there anything better than a true bond bargain? I mean, feed me those monthly dividends with a side of price upside and I’ll never ask for anything more!

Gains from a bond fund? Yes, we contrarian income investors want it all. And we can have it when we buy funds yielding up to 9.4% at discounts up to 12%.

Mr. and Ms. Market are finally realizing that rates did not eclipse their 2023 highs. In fact, they appear to be putting in a lower high, which would be quite bullish for the bonds that Wall Street has been ironically panning all year:

Reality Check: Rates Still Lower Than Last Year

And what’s good for bonds is also good for one of my favorite income investments: the preferred stock.… Read more

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This 8.9% Dividend Soared 178% (and It’s STILL Cheap)

You may have noticed that since the pandemic, there’s been a somewhat perverse desire to make the economy look worse than it is.

Whether it’s concerns about a looming recession—the so-called “vibecession” we talked about last week—or worries that life is getting too expensive because of inflation, there’s a growing bias toward doom-and-gloom.

Plus, pessimistic people tend to sound serious—and for many pundits, parroting these arguments is easier than actually analyzing data.

At CEF Insider, we remain 100% data-driven, for the simple reason that it’s profitable. After all, the doom-and-gloom was at a fever pitch in late 2022, and we all know how stocks have done since.… Read more

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3 Investor Sentiment Indicators We Like to Fade

At some point in my investing life, every participant turned into a trend follower. These “investors” like to buy when an established uptrend is already in place, when purchasing is perceived as “safe.”

Of course, this is the riskiest time to put new money to work. It is also the opposite of what we contrarian income investors do. We buy low and sell high. We do not, like the trend followers, buy high in hopes of selling even higher.

Buy and hope is not a strategy, as my favorite chardonnay label can attest:

(Shout out to my man Barry at Global View Capital Management for the work of art!)… Read more

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Quiet Government Move Will Send Oil (and This 9% Dividend) Soaring

The market volatility we contrarians have been waiting for is finally starting to show up—and we’re going to play it with a cheap energy fund paying a sweet 9.1% dividend.

These days, most investors think energy is played out. But the truth is, we’ve seen a “slow-mo” selloff, with crude tumbling about 10% from back in early April.

And we’ve got Uncle Sam on our side here, too.

This is an election year after all, and last week we got word the Biden Administration will empty the Northeast Gasoline Supply Reserve, set up to provide an emergency supply after Superstorm Sandy in 2014.… Read more

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The Economist Just Changed the Game for These 7.8% Dividends

I’ve been covering CEFs for about a decade, and I’ve never seen them get as much attention as they are right now.

And it’s only the beginning.

We talked about the much-brighter spotlight on our favorite income plays in the November issue of my CEF Insider service. Back then, we noted that big institutional investors (including the particularly aggressive folks at Saba Capital Management) were starting to pressure CEFs to change or shut down.

Shuttering a fund may sound dramatic, but the key thing to bear in mind here is that doing so can result in an immediate gain for investors.… Read more

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The Economist Just Changed the Game for These 7.8% Dividends

I’ve been covering CEFs for about a decade, and I’ve never seen them get as much attention as they are right now.

And it’s only the beginning.

We talked about the much-brighter spotlight on our favorite income plays in the November issue of my CEF Insider service. Back then, we noted that big institutional investors (including the particularly aggressive folks at Saba Capital Management) were starting to pressure CEFs to change or shut down.

Shuttering a fund may sound dramatic, but the key thing to bear in mind here is that doing so can result in an immediate gain for investors.… Read more

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The Next Aristocrats: 5 Stocks on the Verge of Dividend Royalty

Income investors love Dividend Aristocrats. And why not? These are stocks that have delivered dividend raises year after year for many decades.

But we can do even better than the Aristocrats. And get stinkin’ rich in the process by buying these payout raisers before they have clocked 25 years of divvie growth (the qualification to be an Aristocrat).

This is where the real money is made.

The problem with some Aristocrats is that their best days are behind them. When a company reaches a level of dividend maturity, payout ratios can get bloated, and payout increases can become incremental and tied to a company’s modest profit growth.… Read more

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The “Vibecession” Is Back: How to Profit With 9.7% Dividends

The word “vibecession”—basically the idea that people are measuring the economy by feeling rather than by data—is back in the news. That’s because most Americans apparently think we’re in a recession, even though we aren’t.

It is, frankly, annoying to those of us who make our decisions on the data alone. But, as they say, it is what it is. So we’re going to go ahead and profit from it! Our tool of choice is a closed-end fund (CEF) that does something no ETF or regular stock could ever do: It “translates” our gains on US stocks into dividends.

The dangerous thing about a “vibecession” is that it’s easy to make mistakes as the media pushes a fear-based narrative.… Read more

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My Favorite Way to Quickly Double Money with Dividends

Got some investing money you’d like to double? As in, grow it by 100% or more? Here’s the surest and safest way to do it quickly.

Well, before we get into getting rich, let’s talk about income. Not everyone needs to grow their pile of money bigger and bigger. Some of us are done accumulating and are looking for cash flow to help us cruise through retirement.

So, we have two options:

Option 1: Invest for Income Today

Put some of the cash pile into safe funds and stocks. I can show you where to find 7.52% yields, which means you can build a “no withdrawal” retirement portfolio that spins off $75,214.44 on a million bucks:

12 Month Projected Income for CIR Portfolio

Source: Income Calendar

Of course, few blue-chip stocks pay over 2%.… Read more

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“Sell in May”? Nah, We’re Buying These Cheap Bond Dividends Instead

This market rally could roll right through the summer (so much for “Sell in May and go away!”), and we’ve got two sweet bond buys to play it.

That’s right, I said bonds because there are more bargains in bond land than in stocks right now. While stocks could keep floating higher, the last thing we want to do is chase this rally.

Instead, we’re going to ride along on the stock side of things. In bonds, though, the state of play is a bit different.

We’re going to list our two bond picks in order of appeal shortly, capping this article off with our top selection—an unsung closed-end fund (CEF) trading for 12% below its “true” value and yielding a stout (and tax-free) 5.8%.… Read more

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