Daily Archives: October 25, 2017

Dividends

Buy These 5 High Yield Stocks to Replace Income ETFs

If you’re an investor whose goals include earning a decent income from the money you have accumulated, following the Wall Street herd will cost you money: possibly a lot of money.

The investing advice you see, read or are told may not be well aligned with your long-term goals and success. Individual investors who are counting on their portfolios for long term income needs will be best served by learning how to pick a path away from the herd.

There are two themes in play that make it difficult for investors to realize success. The first is the short term focus of the financial news industry. That group focuses on providing entertaining news bites based on data points that change every day. It is a good idea to remember that what you see or read in the financial news is much more about the entertainment part of infotainment than it is about useful information.

The second factor that effects investors are the challenges faced by financial advisors. The typical financial advisor (I know there are exceptions) has a lot on his or her plate besides researching individual investments to discover the very best investments for each individual client. A common practice for full service investment firms is to put client money into portfolios made up of a selection of ETFs that are expected to meet a client’s stated investment goals.

Consider the case of investors who want to draw an income from their portfolio. With this goal, an investor would likely see several popular dividend income ETFs in a portfolio put together by a financial advice firm. Here is a list of those popular income ETFs and their current yields:

  • Vanguard REIT Index Fund (NYSE: VNQ) with $35 billion in assets. Current effective yield: 3.86%.
  • Utilities SPDR ETF (NYSE: XLU) is the largest utilities ETF with $8 billion in assets. Current yield: 3.07%.
  • iShares Select Dividend ETF (NYSE: DVY) is a common stock ETF which as $17 billion in assets. DVY yields 3.1%.
  • Vanguard High Dividend Yield ETF (NYSE: VYM) is another stock ETF focused on high-yield common stock shares. VYM has $29 billion in assets. The fund has a current SEC yield of 3.06%.

As you can see, a strategy of using popular income stock ETFs to build a portfolio with produce an average dividend income yield of 3.3%. That means an investor would get just $33,000 per year in income off a $1 million portfolio. I am pretty sure someone living off a million-dollar portfolio would like to receive quite a bit more than $2,750 per month.

The alternate solution for more income is to own a portfolio of individual stocks. There are hundreds of stocks with yields of 6%, 8%, and up into the teens. For my Dividend Hunter service, the primary focus is on the safety of the dividend payments. Yet the current recommended stocks list has an average yield of 8.0%. To illustrate, here is a list of five stocks that are diversified across different financial sectors with very attractive yields:

  • Reaves Utility Income Fund (NYSE: UTG) is a utilities sector closed end fund that currently yields 6.1%.
  • Hercules Capital Inc (NYSE: HTGC) is a business development company providing capital to growing technology companies. HTGC yields 9.7%.
  • Macquarie Infrastructure Corp (NYSE: MIC) owns energy product terminals, power generation facilities and private aviation fixed base operations. This stock yields 7.8%.
  • Starwood Property Trust (NYSE: STWD) is a mortgage lender for commercial properties and yields 8.8%.
  • InfraCap REIT Preferred ETF (NYSE: PFFR) is a new to the market ETF that only owns preferred shares of equity (property owning) REITs. The preferred shares have a higher safety level when compared to the bulk of the preferred shares market which are issued by lending institutions. PFFR yields 5.6%.

With just five stocks, you have a decently diversified portfolio and an average yield of 7.5%. That is double the average yield of the income focused ETF list above. I do recommend that investors own about 20 stocks for adequate diversification, but the list above gives you a graphic example of how if you learn about income stocks on your own, you can literally double the dividend income you earn off your investment portfolio.

Individual high yield stocks should be the cornerstone of your income portfolio. And these are the kinds of stocks my Dividend Hunter readers are using to build their own income streams… some of them quite massive.  These stocks are part of my new income system called the Monthly Dividend Paycheck Calendar. It’s set up so that by following along you could see extra income of as much as $40,000 or more every year… for the rest of your life.

Get up to 14 dividend paychecks per month from safe, reliable stocks with The Monthly Dividend Paycheck Calendar, an easy-to-use system that shows you which dividend stocks to pick, when to buy them, when you get paid your dividends, and how much.  All you have to do is buy the stocks you like and tell them where to send your dividend payments. For more information Click Here.


Source: Investors Alley

Cryptocurrency

The Coming Bitcoin Bust

The bitcoin mining company’s owner looked back one last time…

Behind him were row upon row of modified PCs, thousands of them, still neatly mounted in their racks. How many times had he walked in, greeted by a wave of heat and the blast of noise from thousands of fan motors inside those machines, straining to keep their microprocessors cool?

It was the sound of digital money being created as each machine’s chip strained to solve another piece of an elaborate cryptographic puzzle — the very basis for the cryptocurrency — and unlock just a little more bitcoin.

It was all gone now. The room had a funereal silence.

The great cryptocurrency boom had gone bust.

No one could explain why, at first. Bitcoin mysteriously plummeted in value for weeks, then months. But news leaks had finally identified the root of the problem…

“Damned quantum computers,” muttered the man as he shut off the lights and walked out for the last time.

Quantum Computing: The Next Step in Cyber-Insecurity

All of that’s made up, of course. But could quantum computing really launch us into a new era of cybersecurity — and spell the end of the cryptocurrency boom to boot?

First, a little explanation: Quantum computing technology is based on the mind-bending aspects of quantum theory.

In “classical” digital computing, information is processed in a binary fashion as a series of ones and zeroes.

With quantum computers, we get bits of information that can coexist in multiple states at any one moment in time. So everything is processed much, much faster.

Big Data problems that take a half-hour to solve with today’s supercomputers can be finished in a mere second — yes, one second — by a quantum computer.

Back in 2014, one of the least-noticed, most earth-shaking aspects of the Edward Snowden affair was the disclosure of documents proving that the National Security Agency was racing to build “a cryptologically useful quantum computer.”

Today, the advances come at a monthly pace…

Could quantum computing really launch us into a new era of cybersecurity — and spell the end of the bitcoin boom to boot?

Perhaps most stunning of all, the world’s first commercially sold quantum computer — the 2000Q, manufactured by Canada’s privately held D-Wave Systems — went on the market in January. (The price tag is $15 million.)

What’s the point? Cybersecurity investors need to pay attention because quantum computing holds great investment potential. It’s no longer the realm of theory and primitive computer-lab mockups. It’s in the real world, today, right now.

Can you imagine what a quantum computer might do to a cryptocurrency — unlocking its blockchain-based cryptographic puzzle a lot faster than its creators thought possible and dumping thousands of units of it on the market?

And then there’s the challenge — and promise — of using quantum computing for cybersecurity.

How do you keep secrets in a world where even the longest, most random password can be figured out in a few seconds?

Fortunately, if quantum computing were a ballgame, we’re still at the part where some muckety-muck gets up and throws the ceremonial first pitch (that promptly bounces into the dirt just before home plate). But the technology is both a threat and a safeguarding tool at the same time.

Kind regards,

Jeff L. Yastine
Editor, Total Wealth Insider

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Source: Banyan Hill