All posts by Brett Owens

REITS

9 REITs Ready to Raise Their Payouts This December

“First-level” investors – those who buy and sell on headlines – mistakenly believe that real estate investment trust (REIT) profits will suffer if rates rise.

They’re wrong. And today, we’ll highlight nine REITs that are “raising their rents” as rates rise. As their tenants pay more, these firms will in turn pay their shareholders more in dividends.

Which means their share prices will follow suit, and move higher, too.

Sure, in the short run, the “rates up, REITs down” theory puts on quite the show. When the 10-Year Treasury’s yield rises, REITs usually fall. And when its yield drops, REITs usually rally. This inverse relationship tends to hold up over multiple days, weeks and even months:

A Short-Run Seesaw Between REITs and T-Bill Yields

The theory backing up this price action says that, because REITs borrow money to grow their property empires, they need cheap cash. Yet this isn’t a “must have” criterion for all such landlords. If their costs increase, they can simply raise the rents when the lease is up for renewal, passing on their higher borrowing costs to tenants.

For example, let’s look at a three-year period starting in May 2003 when the 10-year rate climbed two full basis points – from 3.2% to 5.2%. Based on recent REIT price action, you’d expect most firms would be out of business!

But blue chips such as mall operator Simon Property Group (SPG) and self-storage stalwart Public Storage (PSA)not only survived the rate increases – they thrived:

The Best REITs Climbed With Rates

Why? Because rising rates signaled a booming economy – one in which these firms had no problem raising their rents. Both boosted dividends while investors in each stock enjoyed 129% total returns over the three-year period!

9 REITs That Will Thrive This Rate Hike Cycle

Firms having no problem issuing rent increases today are easy to spot. They report higher and higher funds from operations (FFO) year after year, which finds its way back to shareholders in the form of an ever-rising dividend.

Here are 9 REITs likely to boost their dividends this December:

Douglas Emmett (DEI)
Dividend Yield: 2.3%

Office and apartment property owner Douglas Emmett (DEI) is much like 3M in that it typically doesn’t sport a high yield no matter how much it raises its payout – but that’s mostly because the company’s shares tend to follow the dividend higher.

Douglas Emmett is a REIT that manages to be diverse and targeted at the same time, investing in both Class A office space as well as apartment communities … but only doing so in Los Angeles and Honolulu. The lure? “Small, affluent tenants, whose rent can be a small portion of their revenues and thus not the paramount factor in their leasing decision.” In short, no one’s going to sweat premium pricing.

Shareholders hope DEI will double up on its 10% year-to-date performance with a year-end hike to the dividend. Douglas Emmett typically announces its increase early on in the month, and if it’s anything like the past few years, it should be a lift of a penny per share.

Douglas Emmett’s (DEI) Stock Is Racing Against Its Payout

Ventas (VTR)
Dividend Yield: 4.8%

S&P 500 component Ventas (VTR) is a diversified healthcare REIT that operates primarily in senior housing communities, with 669 such facilities. But its portfolio also includes 359 medical office buildings, 26 life science and innovation centers, 30 skilled nursing facilities and a few other properties. It’s also geographically diversified, owning properties not just in the U.S., but also in Canada and the United Kingdom.

This year has been a disappointing one for VTR shareholders, who saw their holdings join the market rally through late June, with nearly 15% gains – but most of that advance has been peeled away, leaving a return in the low single digits. The lackluster performance comes despite another strong year of fundamentals, including 9% growth in income from operations.

Still, Ventas should be good for some December cheer, with the REIT likely to increase its payout early in the final month of the year. Considering the company is only paying out 74% of funds from operations as dividends this year, VTR has plenty of room to work with.

Mid-America Apartment Communities (MAA)
Dividend Yield: 3.4%

A pattern you don’t often see – but that you should relish when you get the chance – is when a company’s dividend growth accelerates over time. Much more often than not, corporate boards will start to cap their payout hikes as the dividend becomes an increasingly large percentage of their earnings and cash flow. But when a company has a few breakout years, management can take the governor off the payout.

That’s the case with Mid-America Apartment Communities (MAA), an apartment-focused REIT that primarily operates in the southern and southeastern United States, as well as around the District of Columbia. While the REIT isn’t growing its dividend by leaps and bounds, the rate of growth has picked up pace over the past few years.

Another strong year could mean a more significant boost in the payout. Look for the company’s next dividend increase very early in December.

Mid-America Apartment Communities’ (MAA) Dividend Gets Legs

Universal Health Realty Income Trust (UHT)
Dividend Yield: 3.6%

Universal Health Realty Income Trust (UHT), as the name implies, specializes in healthcare-related facilities – medical office buildings make up 76% of its properties, with another 15% in acute care hospitals and the rest peppered among several other types.

The REIT is having a good but not great 2017, up about 12% year-to-date, with net income and funds from operations creeping up year-over-year. That should result in a continuation of its modest and irregular dividend increase schedule. UHT typically offers up two distribution hikes every year – one announced in June, and another traditionally offered up in the first few days of December.

CubeSmart (CUBE)
Dividend Yield: 4%

Self-storage REITs such as CubeSmart (CUBE) have had a rough time since 2016 as sky-high valuations finally caught up with the industry, resulting in a year-plus selloff. However, this group is starting to get its mojo again, and CUBE is waving the banner with a 12% gain over the past three months.

CubeSmart has delivered outstanding operational performance in 2017, including year-over-year FFO improvements ranging from high single digits to low double digits across its three reported quarters.

Coming up next? A dividend increase – one that should be announced sometime mid-month. And given outstanding payout growth of 145% over the past five years, investors can expect more than just a token step up.

CubeSmart (CUBE) Gets Into the Giving Season

Urstadt Biddle Properties (UBA)
Dividend Yield: 4.9%

Urstadt Biddle Properties (UBA) has been a lot more fun to say than it has been to own in 2017, with shares off about 10%. You shouldn’t need many chances to guess what type of properties it owns.

Yes, Urstadt Biddle is a retail REIT – one that owns shopping centers primarily outside New York City. To its credit, it has actually been growing in key metrics such as FFO this year, but occupancy has been a trouble spot, dipping every quarter so far in 2017.

A little relief is likely coming in the middle of December, when the company should dole out a small improvement to its quarterly payout.

Hannon Armstrong (HASI)
Dividend Yield: 5.5%

Hannon Armstrong (HASI) isn’t your garden-variety REIT, but considering that has resulted in returns that are far from garden-variety … I’m sure no one minds.

HASI invests in sustainable infrastructure – things like solar and wind farms. But it also helps make buildings more energy-efficient by making improvements to things such as air conditioning systems and insulation.

This is an under-the-radar growth dynamo that more than tripled its revenues between 2013 and 2016. Shares have mostly followed suit, jumping 115% since its first day of trading in 2013.

The dividend? Well, there’s clearly not much history there given its IPO was just a few years ago, but its 33-cent payout is 50% better than it was in its first full year of distributions. Another hike should come sometime in mid-December.

Hannon Armstrong (HASI) Is Heading Up, Up, Up!

W.P. Carey (WPC)
Dividend Yield: 5.9%

W.P. Carey (WPC) isn’t exclusively a wintertime dividend-raiser – it has something extra to offer investors every season. That’s right: Since 2001, every single quarterly payout from this REIT has been larger than the last.

So, what does it do?

WPC leases out business space to individual tenants under triple-net lease agreements – instead of paying things like property taxes and building insurance, it pushes those responsibilities on tenants in exchange for more predictable and cheaper rents. And W.P. Carey is pretty diversified across its 895 properties, with its largest industry type (retail) only making up 17% of the portfolio, and a wide range of other properties including automotive (8%), construction (5%) and warehouses (2%).

WPC has increased its payout for 18 consecutive years, and should make it 19 sometime in the middle of the month.

Spirit Realty Capital (SRC)
Dividend Yield: 8.6%

Spirit Realty Capital (SRC) is another triple-net lease REIT, but as the 23% year-to-date losses might indicate, it’s one that’s positioned smack-dab in the middle of the reeling retail industry.

Spirit Realty also leases out to single tenants – 431 of them at the moment, in fact – across 49 states. Its tenants include the likes of Walgreens (WBA), AMC Entertainment (AMC) theaters and Church’s Chicken franchisor Cajun Global LLC.

SRC shares took a massive hit in May after reporting an “abnormally high credit loss” and downgrading its adjusted funds from operations guidance from 89-91 cents per share to 80-84 cents. Moreover, the company in August announced plans for a spinoff of certain assets, including properties leased to retailer Shopko, to be completed sometime in the first half of 2018. So there’s a lot of noise surrounding this REIT.

However, Spirit Realty still should deliver a little extra oomph to its payout in December … likely a couple weeks into the month. That’ll only help fatten an already juicy yield of nearly 9%.

Buy These Recession Proof REITs: 2 Plays With 7.6%+ Yields and 25% Upside

One of my top REIT buys right now recently raised its dividend again by 4% over last quarter’s payout. This marks the 21st consecutive quarterly dividend hike for the firm:

Dividend Hikes Every Quarter

It pays an 8.1% yield today – but that’s actually an 8.5% forward yield when you consider we’re going to see four more dividend increases over the next year. And the stock is trading for less than 10-times funds from operations (FFO). Pretty cheap.

However I expect its valuation and stock price will rise by 20% over the next 12 months as more money comes stampeding into its REIT sector – which makes right now the best time to buy and secure an 8.5% forward yield.

Same for another REIT favorite of mine, a 7.6% payer backed by an unstoppable demographic trend that will deliver growing dividends for the next 30 years.

The firm’s investors have enjoyed 86% total returns over the last five years (with much of that coming back as cash dividends.) And right now is actually a better time than ever to buy because its growing base of assets is generating higher and higher cash flows, powering an accelerating dividend:

An Accelerating Dividend

This stock should be owned by any serious dividend investor for three simple reasons:

  1. It’s recession-proof,
  2. It yields a fat (and secure) 7.6%, and
  3. Its dividend increases are actually accelerating.

Please don't make this huge dividend mistake... If you are currently investing in dividend stocks – or even if you think you MIGHT invest in any dividend stocks over the next several months – then please take a few minutes to read this urgent new report. Not only could it prevent you from making a huge mistake related to income investing, it could also help you earn 12% a year from here on out! Click here to get the full story right away. 

Source: Contrarian Outlook

Dividends

How to Collect $3,000+ in Dividends per Month, Every Month

Most investors with $500,000 in their portfolios think they don’t have enough money to retire on.

They do – they just need to do two things with their “buy and hope” portfolios to turn them into $3,279 monthly income streams (or much more):

  1. Sell everything – including the 2%, 3% and even 4% payers that simply don’t yield enough to matter. And,
  2. Buy my 8 favorite monthly dividend payers.

The result? $3,279.69 in monthly income every month (from an average 7.6% annual yield, paid every 30 days). Withupside on your initial $500,000 to boot!

And this strategy isn’t capped at $500,000. If you’ve saved a million (or even two), you can just buy more of my elite eight monthly payers and boost your passive income to $6,349 or even $12,698 per month.

Though if you’re a billionaire, sorry, you are out of luck. These Goldilocks payers won’t be able to absorb all of your cash. With total market caps around $1 billion or $2 billion, these vehicles are too small for institutional money.

Which is perfect for humble contrarians like you and me. This ceiling has created inefficiencies that we can take advantage of. After all, in a completely efficient market, we’d have to make a choice between dividends and upside. Here, though, we get both.

Heck, This Grandma Makes $387,000 Last Forever

Recently I was chatting with a reader of mine who manages money for a select group of clients. He’s using my No Withdrawal Portfolio to make a client’s modest savings – a nice grandmother with $387,000 – last longer than she ever dreamed:

“She brought me $387,000,” he said. “And wants to take out $3,000 per month for ten years.”

“Well she’s already withdrawn money for eight months (at $3,000 per month) and her balance has actually grown to $397,000. If the portfolio continues yielding 7% per year plus 2% per year in capital gains, and she withdraws $3,000 per month, it will pay my fees and still last her 27 years!”

Now many retirement experts pitch real estate as the best way to bank monthly income. But this grandma isn’t hustling to collect rent checks, or fix broken light bulbs. She’s simply collecting her “dividend pension” every month, which is 100% funded by her stocks and funds.

Actually her monthly salary is more than 100% financed – which is why her portfolio has grown by $10,000 as she’s withdrawn $3,000 per month.

How is This Possible? With “B-List” Monthly Payers Like These

Apple Hospitality REIT (APLE)
Dividend Yield: 6.2%

I wonder how many investors researching Apple (AAPL) have accidentally come across this lesser-known real estate investment trust, only to quickly punch in the correct ticker and get back to reading about iPhones.

Anyone who had missed out on a gem.

Apple Hospitality REIT (APLE) owns 236 hotels across 33 states for a capacity of roughly 30,000 guestrooms. The REIT’s properties are spread between two upscale hotel families – Hilton (HLT) and Marriott (MAR) – which includes their namesake brands, as well as the likes of Fairfield Inn, Embassy Suites and SpringHill Suites.

APLE has delivered an impressive growth story over the years, ballooning its top line from less than $400 million in 2013 to more than $1 billion last year. However, while the company has been rapidly expanding, management is fiscally responsible and has given the dividend a wide safety net.

Through the first six months of 2017, the company posted 90 cents per share in modified funds from operations (MFFO) – a tweaked version of FFO, which itself is an important gauge of a REIT’s operational performance and dividend health – against six dividends of 10 cents each. That equates to a payout ratio of just 67%, meaning it would take a catastrophe to keep Apple Hospitality from ponying up what it owes shareholders.

You Won’t Have to Worry About Apple Hospitality’s (APLE) Payout

Global Net Lease (GNL)
Dividend Yield: 9.6%

Global Net Lease (GNL) would seem to be a prime monthly dividend payer for several reasons.

For one, GNL is a “triple-net lease” REIT. Unlike many REITs that take responsibility for things such as taxes, insurance and maintenance, triple-net leasers instead push all those expenses onto the tenants. The tradeoff here is that they don’t charge lessees as much, but what they do bring in should be much more predictable.

GNL also has a couple other plusses, such as international diversity – it owns commercial properties not just in the U.S., but also the U.K., Germany and a few other European countries. Moreover, it doles out nearly 10% in dividends at the moment. And better still, it’s growing; Q2’s revenues, for instance, soared by more than 14% year-over-year.

However, Global Net Lease is externally managed, which requires it to pay a great many fees for property management and other services – fees that cramp the company’s funds from operations to a dangerous extent. GNL paid out 97% of its adjusted funds from operations (AFFO) as dividends last year, and through six months of 2017, this REIT has actually paid out a little more than its total AFFO.

Worse, GNL investors have watched shares decline 5% year-to-date amid a broad up-market, eating up much of their gains from income.

Global Net Lease’s (GNL) Dividend Is Merely Subsidizing Your Losses

EPR Properties (EPR)
Dividend Yield: 5.8%

EPR Properties (EPR) is a play on one of my favorite themes of the past few years: the “experience economy.”

In short, people have started to put less value in merely amassing things, stuff and junk, and instead are increasingly spending their money doing things. That – along with the rise of Amazon.com (AMZN) and other e-commerce operators – have torn a hole through a number of retail REITs – but has benefitted a handful of properly positioned companies, including EPR.

Do you go to the movies? Ski? Have you ever spent a few hour in one of those state-of-the-art TopGolf driving ranges, complete with high-tech games and swanky bars? If so, chances are you’ve helped pad the pockets of EPR, which boasts 378 properties across the U.S.

That said, EPR is much more than entertainment – it also holds properties used for things such as public charter schools and early childhood education centers.

This extremely diversified REIT delivers a monthly payout that just got more than 6% sweeter earlier this year. Better still, the dividend is just 82% of AFFO, so EPR has plenty of ability to meet its obligation.

EPR Properties (EPR) IS Part of a New Generation of High-Performance REITs 

SPDR Barclays High Yield Bond ETF (JNK)
SEC Yield: 5.7%

It’s not widely practiced, but a few exchange-traded funds (ETFs) do dole out income monthly instead of quarterly. Better still, some of these monthly ETF payers even pay a fairly consistent amount of income every month.

The SPDR Barclays High Yield Bond ETF (JNK) does just enough to qualify, and in fact is a generally popular ETF. But I say stay away.

The JNK is a portfolio of nearly a thousand different junk issues – corporate bonds that are below investment grade, which means they have a higher risk of default, but also means that they have to yield more to compensate for that risk. Because SPDR’s junk ETF is so diversified (and so cheap), though, it has become a very common way for investors to gain exposure to this high-income bond class.

However, the JNK doesn’t hold a candle to a number of junk-focused closed-end funds (CEFs).

SPDR’s JNK Isn’t Junk, But It’s No Treasure, Either

These funds tend to charge more in expenses because of their active management, and they’re not nearly as talked about, but on average they offer much higher yields and have delivered much better performance than this merely “OK” exchange-traded fund.

Don’t buy into JNK’s junky payouts.

Please don't make this huge dividend mistake... If you are currently investing in dividend stocks – or even if you think you MIGHT invest in any dividend stocks over the next several months – then please take a few minutes to read this urgent new report. Not only could it prevent you from making a huge mistake related to income investing, it could also help you earn 12% a year from here on out! Click here to get the full story right away. 

Source: Contrarian Outlook

Dividends

These Funds Will Triple Your Income in 2018

I’m going to get straight to brass tacks. Let’s discuss 2 closed-end funds with up to 18% upside in the next 12 months,plus yields up to 5.8%. Both are leading a blockbuster trend almost everyone has missed.

I say “almost” because if you’re a canny contrarian (and if you’re reading this I’m betting you are), you probably know what I’m going to say.

I’m talking about the quiet rebound in actively managed funds (that is, funds with real humans in charge), including CEFs.

So far this year, more than half of active managers are beating their benchmarks. And when human stock pickers take the lead, they keep it, like they did from 2001 to 2011.

This is where our opportunity lies, because the first-level crowd is running in the opposite direction! In the first seven months of 2017, $272 billion flowed into ETFs, almost matching the $287 billion in all of last year.

That means it’s time for us to snap up some disrespected high-yield CEFs. To help you do just that, I’ve taken the 2 powerhouses I mentioned off the top and put them toe-to-toe with their “dumb” ETF cousins.

Round 1: Value-Fund Smackdown

The Boulder Growth and Income Fund (BIF) stands out for one figure: 15.1%, one of the widest discounts to net asset value (NAV) in the whole CEF space.

Translation: you’re paying just $0.85 for every dollar of assets here!

If this discount window snapped shut (and that’s being conservative; this fund has traded at premiums up to 20% in the past decade), the stock would soar 18%!

That kind of gain would turn ETF investors green with envy, because their favorite funds never sport such markdowns.

Consider the iShares S&P 500 Value ETF (IVE), which, like BIF, focuses on undervalued large cap stocks. IVE’s discount or premium never exceeds 1%.

One Chart You’ll Never See in CEFs

Both funds hold Warren Buffett’s Berkshire Hathaway (BRK.A, BRK.B), though BIF, in a bid to emulate the value sleuth himself, holds a much bigger stake, at 30% of the portfolio. JP Morgan Chase (JPM), Wells Fargo (WFC),Cisco Systems (CSCO) and Chevron (CVX) also show up in both funds.

By now you’re probably wondering what the difference is.

Simple: performance—and you can thank BIF’s human managers, Stewart Horejsi, Brendon Fischer and Joel Looney, for that.

Even with the fund’s 1.37% fee (compared to 0.18% for IVE), it’s beaten its passive cousin (with dividends included) both over the last five years and since IVE’s inception on May 22, 2000:

BIF: The Better Bargain Hunter

The dividend is lower than you get from most CEFs, at 3.8% but it crushes IVE’s 2.2%. That conservative yield also means the payout is safe and poised to grow.

And if you’re worried that rising interest rates will hurt CEFs (a common concern that, happily, has been disproven time and again), BIF gives you one more layer of security: it barely uses any leverage (just 3.98% of the portfolio), so you won’t have to worry about higher borrowing costs killing your returns.

The bottom line? If you want a fund to buy and hold forever, BIF—not its low-fee colleague—should be high on your list.

Round 2: Battle of the Yield Plays

For one-stop dividend-stock shopping, the Vanguard High Dividend Yield ETF (VYM) is a top choice for many folks.

The reasons are obvious: Vanguard is a trusted name in ETFs; the fund holds large cap stocks like Microsoft (MSFT), Johnson & Johnson (JNJ) and AT&T (T); it has a blink-and-you’ll-miss-it 0.8% expense ratio; and it offers a 3.0% yield—50% more than the S&P 500 average!

VYM’s Hoard of Household Names

Source: The Vanguard Group

That’s good enough for most folks.

Trouble is, if you stop here and click the “buy” button, you’re missing out on a CEF that’s a far better buy: the Gabelli Dividend & Income Trust (GDV).

Look at the gain manager Mario Gabelli, another celebrated value hound, has steered GDV to in the last decade:

Active Management Proves Its Mettle (Again)

Even if the above results flipped, GDV would still win in my book, because its higher dividend—a 5.8% yield as I write—means a big chunk of its return was in cash.

And like our two value-stock funds, GDV and VYM look similar when you open the hood, including the size of their portfolios, with GDV holding 439 stocks and VYM with 406.

The portfolios’ sector allocations are also mirror reflections: GDV has 18.8% of its assets in financials vs. 13.4% for VYM, and there’s less focus on energy (as you’d expect from a dividend fund), at 8.9% for VYM and 5.4% for GDV.


Source: Gabelli Funds

So why does GDV fly under the radar?

Same reason BIF does: fees, which come in at 1.4%, or almost 18 times (!) more than VYM. (If you haven’t read it yet, check out my colleague Michael Foster’s takedown of the common “wisdom” on fund fees here.)

You can probably guess where I’m going next. Like the three-man crew at BIF, Gabelli is more than earning his keep: the return I showed you above (and all the returns I show you) is net of fees. And keep in mind that those fees come out of GDV itself—the fund doesn’t send you a bill.

Finally, if you think this fund will stumble as rates head higher, think again.

Look at the last rising-rate period, from July 2004 through June 2006, when Fed Chair Alan Greenspan raised the federal funds rate from 1% to 5.25. An earthquake.

How did GDV do?

Just fine.

Proof Positive: GDV Loves Rising Rates

That record, plus the fund’s high yield and 6.4% discount to NAV, make it a far better play than its “dumb” cousin VYM now.

Revealed: My 8% “No-Withdrawal” Retirement Portfolio

I know that a completely safe 8% yield may sound like a pipe dream. But just like ridiculous discounts that turn into premiums overnight (I’m looking at you, BIF), gaudy 8% to 11% yields are common in the CEF world!

In fact, two of the three CEFs in my 8% No-Withdrawal Retirement Portfolio pay even more—and the entire portfolio itself, which is made up of 6 investments in all (CEFs, REITs and preferred shares) hands you a safe—and growing—8% on average.

Plus the instant diversification you’re getting here makes this “no-drama” portfolio far safer than what the strategy too many folks rely on: pile into a high yielder and hope for the best.

Here’s what you get from the 3 powerhouse CEFs in this unique portfolio:

  • My No. 1 CEF Pick lets you hire one of the brightest investment minds in the business for almost nothing! He also pays us every single month (instead of every quarter)—and our yield works out to a rock-solid 8.4%.
  • My No. 2 CEF Pick yields 8.1% and has paid its current distribution every single month since 2002! This is one of the most reliable dividends out there, and the fund’s share buybacks give it extra kick by slowly grinding away at its unusual discount. Buy now.
  • My No. 3 CEF Pick pays 6.0% today but is set to explode in the next 12 months thanks to its ridiculous 9% discount to NAV. This one has motored through crisis after crisis in its 20+ years of existence and has still left the broader market in the dust.

Editor's Note: The stock market is way up – and that’s terrible news for us dividend investors. Yields haven’t been this low in decades! But there are still plenty of great opportunities to secure meaningful income if you know where to look. Brett Owens' latest report reveals how you can easily (and safely) rake in 8%+ dividends and never worry about drawing down your capital again. Click here for full details!

Source: Contrarian Outlook 

Uncategorized

3 Crash-Survival Tips Every Investor Should Know

It’s a question I’m hearing from a lot of investors these days, and it just came up again a few days ago:

How should I prepare for the next market crash?

It’s not hard to see why folks are worried about their nest eggs, with the S&P 500 bubbling along at 24 times earnings and the Fed talking about faster rate hikes.

So today I’m going to dive into 3 simple strategies I use to protect and grow my own money, starting with…

“Crash Insurance” Tip No. 1: The Best Defense …

When I’m looking for stocks that hold their own in a crash or snap back for big gains when the dust settles, I zero in on three things: hefty discounts, share buybacks and quick dividend growth.

And a little over a year and a half ago, Boeing (BA) certainly qualified: it was a bargain at less than 12 times free cash flow, and management knew it: they’d been ramping up BA’s buybacks for nearly two years!

Buybacks Rise …

That was enough for me: I urged members of my Hidden Yields dividend growth service to buy Boeing on December 18, 2015. As if on cue, worries about Chinese stocks sent the S&P 500 into an 11% tailspin from January 1 to February 11.

How did we do?

Boeing did fall further than the market, but it wasn’t long before its share price caught up with its rising earnings per share, which got a nice assist from management’s timely buybacks. Today, shareholders are sitting on an 85% total return since the trough of the selloff, tripling the market’s gain in that time!

… and Boeing Ignites

As you can see above, BA really hit the afterburners starting in late 2016. That’s when it hiked its dividend by a monster 30%, yanking in new investors and setting us up for a nice 4.1% dividend yield on our original buy today—nearly double the 2.2% you’d get if you bought Boeing now.

“Crash Insurance” Tip No. 2: Buy Cheap in Your Sleep

My next strategy is as boring as its name suggests: dollar-cost averaging.

But that masks its power, because this savvy move not only lets you survive the next wipeout but use it to snap up great stocks at terrific prices.

It couldn’t be easier: all you have to do is buy a fixed-dollar amount of a particular stock on a set schedule. That way, you’ll be locked in to buy more shares when they’re cheap and fewer when they’re pricey.

Here’s how it works: let’s rewind to 2007 and say you decided to “gradually” invest in Pfizer (PFE), one of the 3 buy-and-hold “forever stocks” I just recommended. And let’s say you invested $7,000 annually in PFE on the last trading day of the year for the following decade.

On December 31, 2008, in the depths of the meltdown, Pfizer closed at $17.71, so your $7,000 would have gotten you 395 shares (excluding commissions). But on your priciest “buy” day (December 30, 2016, when PFE traded at $32.48), you would have automatically tempered your purchase, adding just 215 shares to your holding.

This is hands-down my favorite way to “time” the market—and you can do it with no extra legwork at all!

Which brings me to…

“Crash Insurance” Tip No. 3: No Withdrawals

Of course, the best crash-survival strategy is to be able to ignore the crash completely!

That’s where my “No-Withdrawal” plan comes in—especially if you’re retired or leaning on your portfolio for income. All you have to do is buy stocks (or funds, as I’ll show you in a moment) paying high, safe dividends … and hold for the long haul.

How high are the dividends we’re talking about here?

How does a 7.5% yield sound? That will send a nice $37,500 our way on a modest $500,000 nest egg. It’s also where my plan gets its name, as an income stream like that lets you live on dividends alone—without being forced to sell into a downturn.

And you might be surprised to hear that there are plenty of “unicorns” out there throwing off safe 7.5%+ payouts. We just have to go where other investors aren’t.

A great example is the Nuveen Tax-Advantaged Dividend Growth Fund (JTD), a closed-end fund my colleague Michael Foster analyzed on May 1.

Funny thing is, despite its gaudy yield, JTD’s top 10 holdings don’t look much different than those of any other equity mutual fund.


Source: Nuveen

However, it throws in three smart twists to squeeze that 7.5% payout out of household names like Apple (AAPL), owner of a 1.6% yield, and JPMorgan Chase & Co. (JPM), at 2.4%.

First, it devotes about 19% of the portfolio to preferred shares, many of which boast higher yields than common stocks.

Management then adds its own secret sauce: a modest amount of leverage (currently 29.9% of the portfolio) borrowed cheaply to reinvest in higher-yielding common stocks and preferreds. JTD also uses a savvy call-option strategy to smooth out volatility and protect its portfolio from a downturn.

As an extra bonus, it minimizes your tax bill by focusing on long-term capital gains and qualified dividend income, both of which are taxed at lower rates than short-term capital gains.

And this stealth income play is just the start. Because now I’m going to show you 6 other “unicorns” that combine to hand you a payout that’s even safer than JTD’s—and higher, too!

Your Own Personal 8% “No-Withdrawal” Plan

What I’m about to reveal is a 6-stock portfolio I spent months crafting for one purpose: to hand you a solid 8% income stream no matter what the market does.

That’s enough to generate a $40,000 a year on your $500,000 nest egg (with plenty of room for more payout hikes, to boot).

And with just one click, you can get all the details on these 6 income wonders now.

This 8% “No-Withdrawal” portfolio is far safer than making an all-in bet on a fund like JTD because it spreads your cash out across 6 investments—CEFs, real estate investment trusts (REITs) and preferred shares.

Here are just a few of the retirement lifesavers you’ll discover:

  • A CEF that’s the brainchild of one of the top fund managers on the planet and pays 8.6% every year in cash.
  • This REIT is a dividend machine! It pays 8% now and has boosted its dividend for 20 quarters in a row!
  • A preferred fund that gives you an extra layer of protection because it doesn’t move in tune with the stock market. It pays a reliable 7.3% and can easily keep that up no matter what the market does.
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