It wasn’t a surprise that the U.S. Federal Reserve didn’t hike interest rates its July meeting.  The Fed already hiked short-term interest rates twice this year, raising rates by a quarter percentage point in March and again in June.  After years of near-zero interest rate policies, the benchmark rate has now been hiked to a range between 1% and 1.25%. Of course, rates are still low by any historical measure. But they are significantly higher than just a year ago. Also important is the speed with which short-term interest rates have increased over the past year. The two charts below… Read More

It wasn’t a surprise that the U.S. Federal Reserve didn’t hike interest rates its July meeting.  The Fed already hiked short-term interest rates twice this year, raising rates by a quarter percentage point in March and again in June.  After years of near-zero interest rate policies, the benchmark rate has now been hiked to a range between 1% and 1.25%. Of course, rates are still low by any historical measure. But they are significantly higher than just a year ago. Also important is the speed with which short-term interest rates have increased over the past year. The two charts below show how fast a three-month Treasury note rate and a one-year rate have jumped:  3-Month Treasury  1-Year Treasury Unfortunately for income investors, these rate increases are being felt especially in closed-end funds, or funds that issue a fixed number of shares and can also borrow in order to enhance dividends and returns.  The mechanism is quite simple. Higher short-term rates are making the cost of leverage more expensive. And because many closed-end funds use leverage to enhance returns and dividends, the costs for these closed-end funds are also going up.  —Recommended Link— Why The… Read More

The number of S&P 500 companies paying a dividend just hit a new all-time high. As of July 1, 84% (424) of the S&P 500 companies paid a dividend — up from 74% 10 years ago.   That’s an extra 54 dividend payers to choose from in just the S&P. It means that, on average, you’ve had five new choices each year.   On one hand it’s great. These companies are building reputations as solid dividend payers. And investors have more options than ever.   #-ad_banner-#But on the other hand, not all dividends are created equally. On the surface two… Read More

The number of S&P 500 companies paying a dividend just hit a new all-time high. As of July 1, 84% (424) of the S&P 500 companies paid a dividend — up from 74% 10 years ago.   That’s an extra 54 dividend payers to choose from in just the S&P. It means that, on average, you’ve had five new choices each year.   On one hand it’s great. These companies are building reputations as solid dividend payers. And investors have more options than ever.   #-ad_banner-#But on the other hand, not all dividends are created equally. On the surface two stocks with a current yield of 2.6% may look similar, but underneath the hood they can be very different.   The newest dividend payers don’t have the history to demonstrate they can sustain a dividend through a recession, a depression, or a stock market crash, and certainly not through a couple of world wars.   If you want a dividend payer with that kind of resume, you need to zero in on the most reliable dividend payers on earth, companies that are in one of the most exclusive clubs in the entire global stock market.    Companies That Have Been… Read More

I’m convinced that no one gets a bargain when it comes to buying a new car or showroom furniture. Those deals just don’t exist. But when some investors say the market is too expensive, I’m not convinced. There’s always a bargain somewhere. Granted, it may be a bargain for a reason that will ensure it becomes even cheaper. But it’s usually the case that those who can’t find anything to buy aren’t looking hard enough. Yes, I agree that stock markets are at record highs. Making a broad-based bet on the market moving up could make an investor wonder aloud… Read More

I’m convinced that no one gets a bargain when it comes to buying a new car or showroom furniture. Those deals just don’t exist. But when some investors say the market is too expensive, I’m not convinced. There’s always a bargain somewhere. Granted, it may be a bargain for a reason that will ensure it becomes even cheaper. But it’s usually the case that those who can’t find anything to buy aren’t looking hard enough. Yes, I agree that stock markets are at record highs. Making a broad-based bet on the market moving up could make an investor wonder aloud if he’s paying too much. If he was focusing on the most widely-held names, he’d would be correct. If a bond investor was seeking income, he’d have to buy the longest maturities available to get paid anything. Even then, those yields would be miserly, not to mention the principal risk involved with a longer maturity and the threat of rising rates. Despite those challenges, I’ve found a closed-end fund (CEF) that trades at an attractive discount relative to its net asset value (NAV) and the market, throws off a well above average income stream, and can hedge an entire portfolio… Read More

You ever wonder why some businesses attract new customers in droves, while others have trouble standing out? It’s the same reason why Starbucks (Nasdaq: SBUX) can charge $7 for a cup of coffee, while the diner across the street only gets $2.  The answer lies in brand loyalty and recognition.  Consumers around the world are comfortably acquainted with certain brand names. And that familiarity has been reinforced by billions in advertising dollars. There is a good reason why Lexus has become synonymous with automotive quality, and why we instinctively grab a 12-pack of Corona beer when heading to the beach. Read More

You ever wonder why some businesses attract new customers in droves, while others have trouble standing out? It’s the same reason why Starbucks (Nasdaq: SBUX) can charge $7 for a cup of coffee, while the diner across the street only gets $2.  The answer lies in brand loyalty and recognition.  Consumers around the world are comfortably acquainted with certain brand names. And that familiarity has been reinforced by billions in advertising dollars. There is a good reason why Lexus has become synonymous with automotive quality, and why we instinctively grab a 12-pack of Corona beer when heading to the beach. The Big Mac isn’t the best hamburger around, yet McDonald’s (NYSE: MCD) still sells them by the truckload each day. The golden arches are instantly recognizable in 119 countries worldwide, delivering annual returns of 13.4% to stockholders over the past decade, nearly double the S&P 500.  Entrenched brands also confer pricing power, allowing their owners to pad profit margins by charging higher prices than competitors for similar products. When you walk into a department store and buy a Ralph Lauren (NYSE: RL) shirt, you pay a little extra for that polo label. Ditto for a Hershey (NYSE: HSY) bar over… Read More

If you’re a growth investor, it’s time to get a lot more boring with your portfolio.   Studies have shown that the real secret to beating the market isn’t growth stocks. Contrary to popular belief, the secret to outsized gains lies in dividends.   The respected research firm Ned Davis conducted a study over more than four decades. Their research found that dividend-paying stocks tend to beat the market over the long term and yield far better returns than stocks that don’t pay dividends.   #-ad_banner-#The Ned Davis study showed that stocks in the S&P 500 that didn’t pay dividends… Read More

If you’re a growth investor, it’s time to get a lot more boring with your portfolio.   Studies have shown that the real secret to beating the market isn’t growth stocks. Contrary to popular belief, the secret to outsized gains lies in dividends.   The respected research firm Ned Davis conducted a study over more than four decades. Their research found that dividend-paying stocks tend to beat the market over the long term and yield far better returns than stocks that don’t pay dividends.   #-ad_banner-#The Ned Davis study showed that stocks in the S&P 500 that didn’t pay dividends delivered a 2.5% annual return from 1972 through 2015. That would have turned a $1,000 investment into $2,910 over that timeframe.    By comparison, dividend-paying stocks in the S&P 500 returned 9% annually over the same period — also beating the S&P 500’s 7.4% annual return.    In this scenario, a 9% annual return over this period would have turned a $1,000 investment into $43,850.   This might be discouraging if you’re a young investor that owns all the FANG (Facebook, Apple, Netflix, Google) stocks. But don’t worry, this is a great time to swap out some of those growth… Read More

America is in the middle of a massive retirement tsunami. Starting in 2010, 10,000 baby boomers began reaching the retirement age of 65 every single day. Looking forward, this trend is just beginning. 10,000 more boomers will reach the retirement age of 65 every day for the next 12 years, all the way until 2030. With bond yields stuck near record lows, boomers are desperate to find safe alternatives to generate retirement income. One of the most popular places they have been shifting their capital is utility stocks. Utility stocks offer two things that retirees value. First, they are generally… Read More

America is in the middle of a massive retirement tsunami. Starting in 2010, 10,000 baby boomers began reaching the retirement age of 65 every single day. Looking forward, this trend is just beginning. 10,000 more boomers will reach the retirement age of 65 every day for the next 12 years, all the way until 2030. With bond yields stuck near record lows, boomers are desperate to find safe alternatives to generate retirement income. One of the most popular places they have been shifting their capital is utility stocks. Utility stocks offer two things that retirees value. First, they are generally a lot more stable than the broader stock market and particularly growth stocks. Second, utility stocks usually offer excellent dividends. The popularity of utility stocks has led to big gains for the Vanguard Utilities Index Fund ETF (NYSE: VPU). In the last ten years, this ETF has gained 127.7%, outperforming the S&P 500’s return by 17%. Take a look below. Those gains have been great for current shareholders. However, for new boomers looking, it has created a problem: U.S. utility stocks look pricey. VPU’s forward P/E ratio of 18.5 is in line with the S&P 500, despite little… Read More

Over the last decade, we’ve published thousands of in-depth research reports. Everything from high dividend payers, game-changing innovations, top stocks in emerging markets — you name it, we’ve told you how to profit from it.  But the research I’m going to tell you about today stands head and shoulders above everything else we’ve ever done.  In fact, it ranks as our single most popular report of all time. We call it: Our Ultimate “Forever Stocks.” —Recommended Link— $43K A Year For Life… (Takes 20 Minutes) Want an extra $43,543 a year in bonus income? You need to see this…… Read More

Over the last decade, we’ve published thousands of in-depth research reports. Everything from high dividend payers, game-changing innovations, top stocks in emerging markets — you name it, we’ve told you how to profit from it.  But the research I’m going to tell you about today stands head and shoulders above everything else we’ve ever done.  In fact, it ranks as our single most popular report of all time. We call it: Our Ultimate “Forever Stocks.” —Recommended Link— $43K A Year For Life… (Takes 20 Minutes) Want an extra $43,543 a year in bonus income? You need to see this… And fast. It shows the five simple steps to take to start collecting this money. Your checks should start coming in within a month… And continue to roll in forever. You can even pass your payments on to your heirs… And they can collect the money after you’re gone. It’s all here. And you can get set up in 20 minutes.  You’ve probably heard us talk about the idea of “Forever Stocks” before. Simply put, these are solid companies that we think you can feel confident buying and holding onto for years, even decades.  And we believe they will continue… Read More

Big tech is having another monster year. The big four technology leaders, also known as FANG — Facebook, Amazon, Netflix, and Google (Alphabet) — have returned an average of 29% in 2017. Take a look at the chart below. This basket of tech high flyers has been great for growth investors, crushing the S&P 500’s 9% return in 2017.  However, for income investors, these outsized gains have been painful to watch. Most of the FANG stocks don’t pay a dividend. And watching this group of stocks deliver a 29% gain in less than six months can make a… Read More

Big tech is having another monster year. The big four technology leaders, also known as FANG — Facebook, Amazon, Netflix, and Google (Alphabet) — have returned an average of 29% in 2017. Take a look at the chart below. This basket of tech high flyers has been great for growth investors, crushing the S&P 500’s 9% return in 2017.  However, for income investors, these outsized gains have been painful to watch. Most of the FANG stocks don’t pay a dividend. And watching this group of stocks deliver a 29% gain in less than six months can make a normally impressive 5% dividend yield seem insignificant. But don’t worry, I have the perfect solution for income investors looking for a piece of tech growth — a well-known global leader that I consider to be the best growth and income stock in the S&P 500. This global leader is still delivering outsized sales and earnings growth. It offers one of the best dividend yields in the technology sector and one of the fastest growing dividends in the S&P 500. And even better, compared to FANG stocks it looks undervalued. Microsoft (Nasdaq: MSFT) is one of the greatest growth stocks in… Read More

What an ideal time to be in the market! Long-term stock investors are reaping the benefits of a massive, eight-year-long bull market. Driven by ultra-low interest rates, fiscal stimulus, economic growth, and a pro-business White House, equities just keep pushing higher.  No one knows how long these glory days will last. Investors are scrambling to find the safest way to invest right amid mounting uncertainty. Despite the bullish environment, there are a wide variety of bearish pressures that could quickly quash the bullish advance.  Anything from terrorism fears, geopolitical worries, or overly aggressive Federal Reserve actions could bring the bull… Read More

What an ideal time to be in the market! Long-term stock investors are reaping the benefits of a massive, eight-year-long bull market. Driven by ultra-low interest rates, fiscal stimulus, economic growth, and a pro-business White House, equities just keep pushing higher.  No one knows how long these glory days will last. Investors are scrambling to find the safest way to invest right amid mounting uncertainty. Despite the bullish environment, there are a wide variety of bearish pressures that could quickly quash the bullish advance.  Anything from terrorism fears, geopolitical worries, or overly aggressive Federal Reserve actions could bring the bull market to a screeching halt. Savvy investors are aggressively seeking to diversify and protect their gains. Protecting gains must be on the forefront of everyone’s mind as the market keeps climbing the wall of worry.  The Safest Places To Invest For The Days Ahead 1. Cash Most people do not consider money itself as an investment. However, cash is the one must-have for any and all investment strategies. As crazy as it might sound, you should consider selling highly profitable stock investments to build your cash reserves.  Nearly every stock brokerage offers the ability to hold cash in a… Read More

I wasn’t a very good physics student in high school. I was a writing, reading, and history guy. But I do remember Newton’s Third Law: “For every action, there is an equal and opposite reaction.” The operative word is “opposite”.  That’s what the bond market experienced last week after the Federal Reserve raised its benchmark Fed Funds rate by 25 basis points, or one quarter of one percent. If the Fed raises rates, yields are going higher, right? Nope. Newton’s Third Law reared its head and proved itself. As the Fed announced its intentions, the yield on the… Read More

I wasn’t a very good physics student in high school. I was a writing, reading, and history guy. But I do remember Newton’s Third Law: “For every action, there is an equal and opposite reaction.” The operative word is “opposite”.  That’s what the bond market experienced last week after the Federal Reserve raised its benchmark Fed Funds rate by 25 basis points, or one quarter of one percent. If the Fed raises rates, yields are going higher, right? Nope. Newton’s Third Law reared its head and proved itself. As the Fed announced its intentions, the yield on the 10-Year U.S. Treasury fell. Along with raising the Fed Funds rate, the central bank also articulated its plan to shrink its holdings of government securities.  During the financial crisis of 2007-2008 as part of its quantitative easing (QE) strategy, the Fed created excess liquidity in the monetary system by buying up U.S. government securities. Their holdings ballooned to nearly $4.5 trillion. #-ad_banner-#As the economy improved, the Fed first slowed its purchase schedule (the “Taper Tantrum”). Now, the Fed has announced that as its holdings mature, the cash will not be reinvested. This is the Fed’s long game. Rather than increase… Read More