The Fed Just Cut Rates: What to Do Now

So the Federal Reserve cut interest rates. This was their third rate cut in the last three months. The new target range for overnight interest rates is 1.5 to 1.75%. That’s below the rate of inflation.

There are three things you should do right now.

#1. Don’t panic.

#2. Seriously, don’t panic.

#3. Make sure you own a broad, well-diversified portfolio of high-quality growth stocks.

I can help you with #3, but for the first two, well…you’re on your own but hopefully #3 will help.

Before I go further, let’s look at what the Fed is doing and why.

The Federal Reserve’s Game Plan

Not that long ago, the Federal Reserve was on a path of increasing interest rates. After all, the economy was slowly getting over its long hangover, and interest rates had been cut to the bone. Things were gradually getting back to normal.

In a three-year stretch, the Fed hiked interest rates nine times. Not only that but going by their public statements, they seemed on track for several more hikes. For the most part, Wall Street was cool with that.

But then it stopped, and Wall Street got scared. In the fourth quarter of last year, stocks plunged. Not only that, but stocks in economically sensitive areas really plunged. President Trump wasn’t shy about expressing his displeasure with the Federal Reserve and all those higher rates.

The key metric to watch is the yield on the two-year Treasury note. It’s not perfect, but the two-year yield can often be a decent forerunner for Fed policy. Last November, the yield on the two-year got as high as 3%. As worries about the economy and trade war set in, that yield started to plunge. By May, the two-year was below 2%, and earlier this month, it fell below 1.4%. That’s a stunning fall for such a short amount of time.

The Fed had to keep up. That’s why in late July, the Fed cut rates. They cut again in mid-September and again today. Jay Powell, the top banana at the Fed, said that this is simply a “mid-cycle” adjustment and not the start of recessionary rate-cutting splurge.

Wall Street believes him. At least for now. After today, the Fed will probably chill out on any more rate cuts, and they’ll assess how the current cuts have worked. The Fed, I should add, does not exactly have a stellar track record when it comes to forecasting the economy.

What does this mean for us? Lower rates are good news for investors for two reasons. One is that it lowers the cost of borrowing, and that’s a major expense for companies. It will also lower the cost of many variable-rate mortgages. Importantly, lower rates tend to help equity valuations. The lower rates go, the higher price/earnings ratios can rise. (Not always, but in general.)

There’s an old saying on Wall Street, “don’t fight the Fed.” That’s very true. Don’t forget; they have a lot more money. This is why investors should be following the Fed’s path.

The key insight is that lower rates help particular sectors of the economy. Basically, anything that is bought with financing; housing is the obvious example. Another area is the industrial sector.

Consider a company like 3M (MMM), formerly known as Minnesota Mining and Manufacturing. This is a classic example of an economically sensitive industrial stock.

Blue chips don’t get much bluer than 3M, and the company is a lot more than Post-It Notes. Last year, 3M had revenues of more than $32 billion. The company is a Dow component, and it has 93,000 employees all over the world.

There’s something else it has—an amazing dividend streak. 3M has raised its dividend every year for 60 years in a row. That dates back to the Eisenhower administration.

This is a good time to give 3M a close look because the stock has disappointed Wall Street this year. Just last week, the company had to lower its business forecast again. This could be 3M’s worst year for sales growth since the recession.

But remember, most of those results happened when interest rates were higher. The lower rates will help 3M and its customers. You always want to pay attention when good companies go through rough patches. Over the last two years, the S&P 500 has gained 19%, while 3M has lost 19%.

Honestly, I’m not too worried about 3M. This is one of the largest and most innovative companies in the world. 3M currently pays out a quarterly dividend of $1.44 per share or $5.76 per share for the year. That currently works out to a dividend yield of 3.4%. That’s about twice what the Fed is charging.

3M will be back, and the Federal Reserve is helping.

Pay Your Bills for LIFE with These Dividend Stocks

Get your hands on my most comprehensive, step-by-step dividend plan yet. In just a few minutes, you will have a 36-month road map that could generate $4,804 (or more!) per month for life. It's the perfect supplement to Social Security and works even if the stock market tanks. Over 6,500 retirement investors have already followed the recommendations I've laid out.

Click here for complete details to start your plan today.

Source: Investors Alley

Feds Bust Man for Running a Phony Hedge Fund from his Frat House

Earlier this month, a Georgia man pleaded guilty to securities fraud. That may not sound so unusual but bear with me.

This is unusual because even judged by the standards of great Wall Street crooks, this conman’s scam stands out.

For one, Syed Arham Arbab is hardly a would-be Master of the Universe. Instead, he’s a 22-year-old undergrad at the University of Georgia. Still, he was able to run a $1 million hedge fund, (or more accurately, Ponzi scheme), out of his frat house!

Let me repeat that again. He ran a phony hedge fund out of his fraternity house. (Whatever happened to keggers?)

I have several questions, and most of them strain credulity.

Arbab tricked 117 people into investing in his fake fund. Instead of going into stocks, the money was used for booze, gambling, and strip clubs. Shocking, I know.

Arbab admitted that he lied about his track to dozens of investors. He promised guaranteed risk-free returns of up to 56%. That’s an impressive track record even for being complete make-believe.

Arbab also confessed to the court that he told investors he was getting his MBA at the school’s Terry College of Business and that a famous NFL player and UGA alum had put money into the fund. In reality, Arbab was rejected from UGA’s MBA program, and the football player had never invested in his fund.

Ironically, the gambling and strip club was probably the closest he ever got to acting like a real hedge fund titan.

Honestly, I’m torn by stories like this. I feel bad for the victims, many of whom, I’m sure, lost their life-savings. Yet I have to wince when I think of their naivety. How could you trust a 22-year-old who was running the show out of his frat house?

The example of Arbab is a perfect counterexample to one of my favorite stocks, also based in Georgia, which is AFLAC (AFL).

When most people hear the name AFLAC, they usually think of the duck ads. By the way, that’s now considered to be a legendary marketing campaign. In a few years, AFLAC’s name recognition went from 2% to 90% thanks to those duck ads.

But what many people, especially new investors, may not realize is what a sound and well-run company the duck stock is. Consider that AFLAC has increased its dividend every year for the last 37 years in a row.

AFLAC was founded in 1955, but its remarkable success began in 1970. That’s when John Amos visited the World’s Fair in Osaka, Japan. When he got there, he was astounded by the number of people who walked around the crowded cities wearing surgical masks.

Amos instantly recognized a golden business opportunity. Amos, along with his two brothers, ran a small insurance company based in Columbus, Georgia called the American Family Life Assurance Co. He figured that if people in surgical masks wouldn’t buy insurance, no one would.

In 1974, the Japanese government awarded American Family a monopoly on Japanese cancer insurance, which is very rare for a gaijin. The only reason they got it was because no Japanese firms were interested. Today, 95% of all the listed companies in Japan offer American Family’s products.

I’m going to let you in on a little secret Wall Street doesn’t want you to know about. Although it may appear to be boring, insurance is insanely profitable. Most investors have no idea of the goldmines they ignore just because insurance is dull as dirt. Warren Buffett built his investment empire on insurance.

Business has been going quite well for AFLAC. Three months ago, the company reported it made $1.13 per share for Q2. That topped estimates by six cents per share. Dan Amos, the current CEO and John’s nephew, said the duck stock aims to buy back $1.3 to $1.7 billion worth of stock this year.

AFLAC didn’t exactly raise guidance this summer, but they said that earnings should come in at the high end of their current range, which is $4.10 to $4.30 per share. That means the shares are going for a little over 12 times this year’s earnings. Earnings are due out again on Thursday, October 24.

Look for an earnings beat from the insurance stalwart…and steer clear of any frat house “geniuses.”

President Trump’s Secret 5G Stock Nod?

President Trump is now officially on the record as saying…

“The race to 5G is a race America must win, and it’s a race, frankly, that our great companies are now involved in.”

But here’s what Wall Street and the media won’t tell you…

The great companies Trump is referring to are NOT just Verizon, Sprint, or AT&T.

New evidence suggests Trump may have been referring to this secret 5G company. It’s not a household name… but experts say it’s ready for “Amazon-like” growth.

Pay Your Bills for LIFE with These Dividend Stocks

Get your hands on my most comprehensive, step-by-step dividend plan yet. In just a few minutes, you will have a 36-month road map that could generate $4,804 (or more!) per month for life. It's the perfect supplement to Social Security and works even if the stock market tanks. Over 6,500 retirement investors have already followed the recommendations I've laid out.

Click here for complete details to start your plan today.

A 64-Year Dividend Increase Streak: Buy, Hold or Sell?

Dividend yields are so low today that dividend growth is actually becoming cool. Income investors are combing over “Dividend Aristocrats”–stocks that have raised their payouts for 25 straight years–in desperation to find any meaningful yield.

Problem is, these stocks are so popular and richly valued that they don’t pay much today. Nor will they yield much more tomorrow, even with yearly raises. Our princely picks pay less than 2% today, which is going to net you less than $20,000 on a million bucks.

Dividend Aristocrat Yields Head Towards Zero

The Dividend Aristocrats are the well-worn, oft-recommended dividend growers of the S&P 500. All 57 Aristocrats have improved the amount of their total annual payouts every year for at least 25 years (and in many cases, they have done it for much longer.)

Yes, reliably increasing income matters. After all, the dividend-growth strategy in my Hidden Yields product is roughly doubling our money every four years with a 17%+ yearly return since inception.

But the Aristocrats are starting with too much of a handicap. As you can see above, the ProShares S&P 500 Dividend Aristocrats ETF’s (NOBL) yield is better than the market, but still below 2%.

The actual average among all 57 components isn’t much better, at 2.4%. In fact, only 13 components yield more than 3%. And just two—AT&T (T) and AbbVie (ABBV)—yield more than 5%.

That’d be OK if we were sacrificing high nominal yields for great price performance, but we’re not. In fact, NOBL has actually underperformed the S&P 500 since 2013 inception.

My take? Cherry pick ‘em. A few Aristocrats are truly royalty among the entire world of publicly traded stocks. Others actually have promising growth prospects that you wouldn’t expect from supposedly stodgy dividend plays.

Let’s look at a six-pack of the best and worst Dividend Aristocrats together.

McCormick & Co. (MKC) 
Dividend Yield: 1.4%

Let’s start with McCormick & Co. (MKC), a frequent cupboarder in American kitchens. Whether it’s the namesake spices, Old Bay seasoning, Stubb’s barbecue sauce, Zatarain’s rice mixes, French’s mustard or Frank’s Red Hot, our food has often been flavored up by its products.

In fact, you probably enjoy McCormick more often than you realize, given that it also provides spices and condiments to restaurants. Overseas, too, as its international reach spans roughly 150 countries and territories.

All this makes McCormick & Co. a recession-resistant play hiding in your pantry corner. When times are tight, folks eat out less and prepare more food at home.

Check out our last mega-recession as an example. While the S&P 500 was trashed during the bear market of 2007-09, MKC managed to tread the boiling water for most of the downturn:


Its dividend, which has improved for 33 consecutive years, has grown by a nice 43% since the start of 2015. But it yields less than a 10-year T-note today, which is not good enough for us income seekers.

Franklin Resources (BEN)
Dividend Yield: 3.8%

Franklin Resources (BEN), the name behind the Franklin Templeton investment firm, has expanded its payout for 37 years. Recently shares have jumped 73% since the start of 2015 plus the firm dished a generous $3-per-share special dividend at the start of 2018 as a way of giving back after the passage of the Tax Cuts and Jobs Act. That translated into an additional 9 percentage points of yield for the year!

However, Franklin’s yield has recently rocketed higher for the wrong reasons. Its business is in the tank, and the dividend looks increasingly dicey as a result.

In June, I highlighted BEN as one of several “zombie dividends” to sell. The company has been suffering from dwindling assets under management for years, and it was way behind the curve with ETFs, finally launching its first suite of passive products in 2017. Since we called out this loser, it quickly dropped 20%:

The Wrong Way to Increase Yield

Walmart (WMT)
Dividend Yield: 2.8%

Walmart (WMT) is one of the few retailers that can compete with (and potentially topple) Sales through Walmart’s website and mobile app are booming. Its e-commerce revenue is growing at a brisk 43% clip year-over-year.

In my college days at Cornell we operations research and industrial engineers (ORIE) actually studied Walmart’s supply chain. It was one of the finest examples of ORIE applied to market domination. “Wally World” is one of the few retailers positioned to compete with Jeff Bezos and Amazon on same-day delivery, thanks to its logistics expertise and deep bench of brick and mortar locations. Really the firm is one partnership with Uber away from getting you anything you want within the hour.

WMT also serves as a poster boy for the inarguable link between dividend growth and share-price returns.

Walmart (WMT) Always Snaps Back

Clorox (CLX)
Dividend Yield: 2.8%

Clorox (CLX) is a consumer staple that needs no introduction. But to get an idea of just how wide its reach is, understand that Clorox is far more than just Clorox. It’s also Pine-Sol, Brita water filters, Fresh Step cat litters, Glad trash bags, Liquid Plumr, Burt’s Bees lip balms and even Hidden Valley ranch sauces.

These are durable brands that have no-brainer recession appeal. But the company is taking a decided step back.

Earlier this month, Clorox presided over a dour analyst meeting in which it cut its full-year guidance from $6.50-$6.30 per share to $6.25-$6.05 per share. That led to several price-target downgrades, including by JPMorgan’s Andrea Teixeira (Underweight rating), who trimmed her outlook from $143 per share to $137. What’s particularly concerning is she sees additional downside earnings risk.

There’s little criticizing CLX’s dividend growth. Payouts have been on the rise for 42 consecutive years, and have improved 43% since the start of 2015.

But the sub-3% yield is nothing to fawn over, especially given Clorox’s growth issues. It’s also curiously priced at 23 times profits.

Clorox’s (CLX) Merely Market-Matching Performance Could Slow Even More

Dover (DOV)
Dividend Yield: 1.9%

Near the end of 2018, I told Market Wrap host Moe Ansari that the key to finding potential doublers is to home in on boring stocks.

And Dover (DOV) is a publicly traded bottle of ZzzQuil.

Dover is a diversified industrial that makes everything from product-tracing technologies to bench tools to chemical dispensing systems and even commercial refrigeration units. That kind of revenue diversification always keeps Dover in the game, and more importantly, it has helped finance one of the longest-standing payout increases among the Aristocrats.

Indeed, I mentioned Dover in July 2018. Since then, it has announced two more annual dividend increases to extend its streak to 64 years. It has also quadrupled the broader market with 43% in total returns.

The Saucy Side of Fluids and Food Equipment

Dover is a little pricey at the moment, but it should keep slowly churning out growth of about 3% annually over the next few years. The bottom line is what’s more encouraging–analysts are looking for a 17% bump this year and a still-respectable 8% improvement on top of that in 2020.

3M (MMM)
Dividend Yield: 3.5%


That’s the word JPMorgan analyst Stephen Tusa used to describe 3M’s (MMM) business model in an early August note.

“There is something that goes beyond the impact of cyclical volume pressure here. (A) structural issue, that there is generally a higher cost to serve than many appreciate, now seems clear.”

It’s yet another sign of just how much has turned for what once was one of the most consistent blue chips on Wall Street. It’s currently mired in its sharpest decline in decades, a 35% drop since early 2018.

The industrial conglomerate that’s responsible for Post-it Notes, Scotch Brite  and Nexcare bandages has delivered a few dismal reports in that time. That includes a ghastly earnings miss in April that saw it also cut its full-year forecast, announcement of the layoffs of 2,000 workers, and informed investors it was undergoing some restructuring and other measures to try to cut costs and boost cash flow.

It’s also been bitten by the litigation bug. 3M could face as much as $6 billion in legal liabilities connected to accusations that the company’s chemicals have shown up in groundwater across the country.

3M is one of the longest-tenured Dividend Aristocrats at 61 consecutive years and counting. But even that seems like less of a guarantee than it used to. While the payout is well-covered at less than 70% of profits, Tusa warned that “Another leg down in fundamentals would mean they are on watch for a cut, after 37 straight years of increase.”

Will things degenerate that much? It’s difficult to say. But 3M appears set up to endure more pain before it establishes an enduring recovery.

Better Than Aristocrats: “2008-Proof” Income Plays With 7.5% Yields and Fast 10%+ Upside

It’s remarkable to think that even the most reputable blue chips sporting decades of dividend growth can be so suspect.

But that’s how I can help you separate yourself from “first-level” investors. While they lean on lazy recommendations based on past performance and reputations, I invest using methodical, forward-looking analysis, and sniff out the dangers in supposedly no-brainer plays.

And I want to start by showing you how to get real income. We’re talking safe, sustainable payouts of 3 to 4 times what most Dividend Aristocrats deliver.

This is no time to gamble in a desperate stretch for yield. We’re in the back half of a bull market that’s extra-long in the tooth, and numerous global risks are converging on this fragile market.

Big yields mean nothing if you’re not protecting your hard-earned nest egg, too.

And that’s precisely the inspiration behind my 5-stock “2008-proof” portfolio, which I’m going to GIVE you today.

These 5 income wonders deliver two things most “blue-chip pretenders” don’t:

  1. Rock-solid (and growing) 7.5% average cash dividends (more than my portfolio’s average).
  2. A share price that doesn’t crumble beneath your feet while you’re collecting these massive payouts. In fact, you can bank on 7% to 15% yearly price upside from these five “steady Eddie” picks.

With the Dow regularly lurching a stomach-churning 1,000 points (or more) in a single day during pullbacks, I’m sure a safe—and growing—7.5% every single year would have a lot of appeal.

And remember, 7.5% is just the average! One of these titans pays a ROCK-SOLID 8.5%.

Think about that for a second: You can buy this incredible stock right this second, and every single year from now on, nearly 9% of your original buy boomerangs straight back to you in CASH.

If that’s not the very definition of safety, I don’t know what is.

These five stout stocks have sailed through meltdown after meltdown with their share prices intact, doling out huge cash dividends the entire time. Owners of these amazing “2008-proof” plays might have wondered what all the fuss was about!

These five “2008-proof” wonders give you the best of both worlds: a 7.5% CASH dividend that jumps year in and year out, with your feet firmly planted on a share price that holds steady in a market inferno and floats higher when stocks go Zen.

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

The 8.6% Dividend Your Advisor Hides From You

When I show people how closed-end funds (CEFs) can hand them safe 7% yields and let them retire on much less than a million bucks, they often say one thing:

“Why the heck hasn’t my financial advisor told me any of this?” 

The reasons are both simple and surprising: 1) Many financial advisors don’t fully understand how CEFs work, and 2) Some CEFs involve a bit of research, so for a lot of advisors it’s easier to recommend low-cost index funds and call it a day.

Both of these (unacceptable) reasons are costing folks millions in profits!

So today we’re going to demystify CEFs by zeroing in on a fund that’s crushed the market for nearly two decades. In fact, since its IPO in 2002, the PIMCO Corporate & Income Opportunities Fund (PTY) has given investors double the S&P 500’s return.

The Power of a Top-Notch CEF

A lot of advisors dismiss funds that beat the S&P 500 in a year or two as simply lucky—but that doesn’t explain PTY’s 777% return in 17 years. And a deeper look tells us a lot about CEFs and how we can harness them to retire earlier and lock in a massive income stream that too many pros say is unattainable.

How to Buy a 777% Winner (With an 8.6% Dividend) on the Cheap

Since its inception, PTY has returned 13.6% annualized on its market price, while the S&P 500 has returned 9.3%. This outperformance is due to one factor: the fund’s inherent return, despite the market’s lower valuation of PTY.

Let me explain the difference. If we look at the value of the portfolio of assets PTY holds, we see that this portfolio has risen 784.6% since its inception, a bit above the fund’s market-price return.

Portfolio Value Outraces Market Price—and Hands Us a Discount

In other words, PTY’s portfolio gains and the dividends the fund has paid out, if reinvested, are greater than the market price you’d pay for PTY if you bought it now.

This is in large part compounding magic: when you reinvest 8.6% dividends in such a high-performing fund, your total return is bound to grow. But the other part of the story is PTY’s portfolio itself—the real source of its massive outperformance—and PIMCO’s skill in managing it.

Let’s take a look at that now.

A Misunderstood Fund With an Undervalued Edge

PTY’s portfolio consists of $2 billion worth of a variety of debt instruments:

Source: PIMCO

If we focus on the market value (MV) column, we see that the biggest allocation is to mortgage bonds (32.36%), separated into non-agency and agency mortgage-backed securities (MBS’s).

These are often depicted as complicated and exotic derivatives, but they’re pretty simple at their core: imagine taking a large number of mortgages, putting them together in a single portfolio, then selling portions of that portfolio to investors.

PTY would be one of these investors, because it can get less exposure to any one single mortgage, helping insulate its portfolio, even if housing crashes like in 2008. (It’s important to note that PTY survived 2008 and kept beating stocks during that crash).

The other large exposure, to high-yield credit, is to bonds from corporations with lower credit ratings. Think of this as a group of loans that companies take out and pay back at a higher interest rate. With defaults in these loans staying below 2% most of the time, it’s a lower-risk bet than many people think.

But it’s even less risky for PIMCO, because it’s the world’s second-largest bond buyer. It can access top-quality bonds and information about companies that most other investors can’t. This edge has helped PTY crush the market for decades. And since they still have that advantage, this outperformance will likely continue.

The Income Key to Financial Independence

A lot of investors hear things like “MBS’s” and “high-yield bonds” and get scared. Others cynically say that this kind of outperformance can’t last. But PTY not only survived the worst recession in living memory, its portfolio recovered faster than the S&P 500. And it paid out a high level of income throughout the crisis.

This is what really matters. Investors who held PTY during the crash saw unrealized losses in their portfolios—but they also lost no money if they didn’t sell. And PTY’s huge income stream makes it possible to hold during tough times.

Remember: PTY’s dividend yield is 8.6%. That means investors get $716.67 per month for every $100,000 they invest. If you wanted that same income stream from an S&P 500 income fund, you’d need to invest $450,000.

Yet financial advisors tell their clients to tolerate the pathetic yield they get from the stock market, because they don’t understand how funds like PTY have been crushing the market for years. But PTY’s record speaks for itself.

And PTY isn’t the only CEF that’s crushed the index. It isn’t even the best-performing CEF, or the highest yielding. There’s a whole universe of CEFs out there that you can harness for financial independence.

And now I want to introduce you to 5 of them with 8%+ dividends and 20% gains ahead in the next 12 months …

5 More 8%+ Dividends Wall Street Hides From You

Before I do that, I have to tell you that advisors aren’t the only ones trying to keep CEFs off your radar. The big fund companies are in on it, too!

I’m talking about massive providers of exchange-traded funds (ETFs), such as Vanguard and iShares. These firms throw big marketing dollars at ETFs, and because most of these funds are automated, their costs are next to nothing.

Translation: even the low management fees they collect are pure profit.

But CEFs are different: with average yields of 7% and up, they often beat ETFs on dividends alone! And that doesn’t account for the performance a top-flight human manager can add on, especially in areas like high-yield bonds, preferred stocks and real estate investment trusts (REITs).

I just showed you how PTY demolished its benchmarks while paying an 8.5% dividend—and bear in mind that its return is net of fees.

I don’t know about you, but I don’t mind paying a few hundred bucks more in fees if it will net me a market-crushing 777% return!

Which brings me to the 5 CEFs I want to show you now. They’ve delivered their shareholders life-changing gains, they yield 8% on average (with the highest yielder of the bunch paying an outsized 9.3%), and they’re all bargains now.

The upshot: they’re primed for 20%+ price upside in the next 12 months or less!

Michael Foster has just uncovered 4 funds that tick off ALL his boxes for the perfect investment: a 7.4% average payout, steady dividend growth and 20%+ price upside. — but that won’t last long! Grab a piece of the action now, before the market comes to its senses. CLICK HERE and he’ll tell you all about his top 4 high-yield picks.

Source: Contrarian Outlook

Get Ready for Cannabis 2.0

ne year ago, on October 17, 2018, Canada legalized marijuana for recreational use.

But that was only the first step.

Now we’re at “Cannabis 2.0.” This comes exactly one year later, on October 17, 2019. Cannabis 2.0 is when Canada will legalize edibles, drinks, vapes, plus a few other categories.

The idea with the Canadian plan was to go about legalization in steps.

The first step of legalization, Cannabis 1.0, unleashed a “green rush” as shares of cannabis stocks soared. The business of getting high was making new highs nearly every day.

Frankly, it got out of hand. The rally soon went bust, and many marijuana stocks tumbled back to earth. Shares of Tilray (TLRY), to use one example, went from $20 to $300.

Then back to $20.

So now that Cannabis 2.0 is here, will we see another explosive rally? My first bit of advice is to slow down. The Canadian law means that on October 17, companies are allowed to file a notice with the government that in 60 days, they’re going to bring new products to the market. (Funny how legalization means bureaucracy and red tape.) So it won’t be until December that anyone can buy anything.

Let’s consider some numbers. Deloitte estimates that the annual market for edibles and alternative cannabis products is worth C$2.7 billion. Of that C2.7 billion, C$1.6 billion is just for edibles, and remember, this is only for Canada.

The key here is breaking down the market. The first wave of legalization was happy news for regular users of marijuana, but the unknown factor is how many occasional users there are.

In addition to that, there could more consumers who have never tried marijuana before due to its illegal status but might be lured in now that it’s legal. There’s been a lot of debate about these so-called “curious” users.

For these folks, they probably want to take baby steps first, and that’s why the edibles legalization is so important. For a person who never inhaled (and watched all their friends get stoned in college), trying a gummi bear might be an easy first step.

So what companies are poised to benefit from Cannabis 2.0? At the top of the list, I’d have to put Canopy Growth (NYSE: CGC). In many ways, this may be the most impressive marijuana stock.

For starters, the company has an NYSE listing. This is important because many institutional investors may shy away from OTC stocks.

I also like that Canopy’s Tweed brand is closely associated with Snoop Dogg, which is a nice relationship to have.

Canopy also has its eye on the future. The company recently made an interesting deal. Canopy offered to buy Acreage Holding (OTC: ACRGF) for $3.4 billion, but there’s a hitch. The deal won’t close until the U.S. legalizes cannabis for recreational use. The deal has a 90-month window, so all bets are off if legalization doesn’t happen. That’s a smart move.

But the most important reason why I like Canopy, and which brings us back to Cannabis 2.0, is that Canopy has developed a close relationship with Constellation Brands (NYSE: STZ). Constellation bought a $4 billion chunk of Canopy stock. This relationship is in the interest of both companies.

Constellation, if you’re not familiar, is a beer and spirits company with a global reach. The company has 9,000 employees and a market cap of $37 billion. Now that cannabis drinks are legal in Canada, it’s nice to have the maker of Corona and Modelo on your side.

This is the perfect partner to have in an effort to reach out to those “curious” consumers. The blue-chip firm could come in handy if Canopy needs to raise a lot of money. The relationship is so close that Canopy recently made the CFO of Constellation Brands its new chairman.

Currently, Canopy has ten production facilities in Canada. That works out to 4.3 million square feet of growing space. Canopy plans to add another 1.3 million square feet. The company also has a hemp production facility in New York state (hemp is legal at the federal level).

This is a good time to give Canopy a close look because the stock was down over the past few months. During the spring, CGC got as high as $52 per share. Lately, it’s been going for less than $20 a piece. That probably cleared out a lot of short-term traders. Cannabis 2.0 could be a major boost for Canopy Growth.

Pay Your Bills for LIFE with These Dividend Stocks

Get your hands on my most comprehensive, step-by-step dividend plan yet. In just a few minutes, you will have a 36-month road map that could generate $4,804 (or more!) per month for life. It's the perfect supplement to Social Security and works even if the stock market tanks. Over 6,500 retirement investors have already followed the recommendations I've laid out.

Click here for complete details to start your plan today.

Source: Investors Alley

How to Play Tech for 6% Dividends and 300% Upside

New funds are rare in the closed-end fund (CEF) world. But there’s a new kid on the block throwing off a monthly 6% dividend. Today we’re going to run through this new fund to see if it might have a place in your portfolio.

6% Dividends and Netflix-Like Growth—in 1 Fund

I’m talking about the BlackRock Science and Technology Trust II (BSTZ), launched in mid-May of this year.

The unique thing about BSTZ is right in its name: it’s no stodgy income play: its portfolio is packed with some of the fastest-growing tech plays out there.

I’m not talking about Apple (AAPL), Netflix (NFLX) or Facebook (FB). Instead, BSTZ focuses on off-the radar companies whose biggest growth lies ahead, like payment processor Square (SQ) and Twilio (TWLO), a communication platform many big companies already depend on.

That’s in contrast to many tech funds, which start and stop with the well-trodden territory of FAANG—Facebook, Apple, Amazon (AMZN), Netflix and Google (Alphabet [GOOGL]).

The Next Apple? It’s Likely in Here.

Source: BlackRock

Twilio is a great example. Its stock price has more than tripled since the start of 2018, and management feels there’s plenty more to come:

A 6% Dividend Plus Gains Like This

The next question is obvious: as none of these companies pays a dividend, what’s BSTZ’s plan for maintaining—and growing—its 6% income stream? Simple: it will sell these stocks when management feels they’re overvalued and buy when it senses a bargain. The profits then roll out to us in the form of that 6% dividend.

The strategy works because these are the kind of firms that, despite their small size, rely on their own cash flow to drive growth. They’re also the kinds of stocks that can get overbought quickly, giving BSTZ’s tech-savvy analysts the chance to sell at a premium.

Can a Growth-Focused Dividend Strategy Work? Absolutely.

The concern here, from a dividend investor’s point of view, is also obvious: can BSTZ keep paying out dividends by rotating in and out of tech stocks?

To answer this, let’s look at a competing fund: the Columbia Seligman Premium Tech Fund (STK). While the management team is different, the strategy is similar: find high-quality, fast-growing companies and buy them up.

A Tech Portfolio Focused on Quality

Source: Columbia Threadneedle Investments

As you can see, STK’s portfolio has gotten a little more conservative lately, with a shift from smaller growth companies toward big names like Alphabet and Apple. But don’t be fooled: most of the portfolio is still focused on fast-growing companies like Synopsys (SNPS) and Teradyne (TER). STK is an aggressive tech growth fund, just like BSTZ.

One difference? History. While BSTZ held its IPO a few months ago, STK has been around for a decade. Which is why its past is helpful in understanding BSTZ’s future.

Namely: was STK able to maintain dividends throughout its history by buying and selling tech stocks? Yes.

Steady Payouts—and More

Not only has STK maintained its distributions, which yield a whopping 8.8%, but it’s even paid special dividends in recent years, meaning it has been an even bigger income producer.

I expect the same from BSTZ, but with even bigger gains, thanks to its more aggressive strategy of buying younger, faster-growing companies before the rest of the world is aware of their true potential.

8.8% Dividends and Fast 20% Upside—in Your Income Portfolio?

BSTZ offers something all of us want but few people think is possible: a healthy dividend and fast upside from your income investments.

It’s the investment holy grail! Because with your income stream secure, any growth you can squeeze from this corner of your portfolio is gravy.

Free money. Pure and simple.

Too bad most people’s advisers tell them this dream is impossible. But not only is it possible, it’s easy with CEFs.

But BSTZ, promising as it is, isn’t our best play now.

For one, its dividend is lower than I’d like. With CEFs, it’s easy to bag safe 7%+ payouts, often paid out monthly. And second, because it’s a new fund, the hype has yet to die down: BSTZ trades at a 10% premium to its NAV (or the value of the stocks in its portfolio).

I don’t know about you, but I’m not fussy about paying $1.10 for every dollar of a fund’s assets. I don’t care how skilled its management team is!

28% Total Returns Waiting for You Here

That’s why I’m pounding the table on 4 other CEFs now: they yield an average 8.8% today, and they all trade at huge discounts to NAV.

The bottom line?

I fully expect 20%+ price upside from all 4 of these new picks, in addition to their huge dividend yields. Add it up and you’re looking at 28%+ total returns by this time next year, including their massive payouts and upside potential.

Michael Foster has just uncovered 4 funds that tick off ALL his boxes for the perfect investment: a 7.4% average payout, steady dividend growth and 20%+ price upside. — but that won’t last long! Grab a piece of the action now, before the market comes to its senses. CLICK HERE and he’ll tell you all about his top 4 high-yield picks.

Source: Contrarian Outlook

How to Find Stocks Poised to Skyrocket

Imagine how your life would be different with just a few critical calls in the market.

finding stocks that skyrocket

Source: Shutterstock

Imagine your life if you had bought:

  • Microsoft (NASDAQ:MSFT) for 39 cents per share.
  • Apple (NASDAQ:AAPL) for $1.38 per share
  • Cisco Systems (NASDAQ:CSCO) for 50 cents per share.

I recommended those stocks at those prices …. and my subscribers collected massive gains.

And I live a comfortable life because of those calls and many many others with similar huge gains.

I didn’t achieve those gains with market timing, or just by getting lucky.

I’m a numbers guy.

I have loved math my entire life and I have used math and technology to help me find the stocks poised to make huge moves in the market.

But I still wasn’t satisfied. I knew that math and technology could lead me to find the stocks that are poised to soar in a much shorter period of time.

We’re talking about moves of 100%, 200% and even 500% in months instead of years.

I’ve been working on this project for years, and now — finally — I’m ready to share it with everyone.

I call this effort Project Mastermind.”

Even just a few years ago, this kind of analysis was more like a dream than reality.

Using modern technology and loads of data, I am able to identify which stocks are ready to skyrocket, and the gains can come in months, not years!

Gains like these can be a retirement game changer. A chance to collect triple digit returns in a short time.

And now, I’m ready to unveil this system to the world.

We all know technology is changing the world around us, and it’s changing the way we invest too.

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These REITs Are Expected to Increase Dividends In November

019 has been volatile, but so far into the year, a positive one for income stock investors. If you look at the Vanguard REIT Index Fund (VNQ) you see that 2019 has produced a steady increase in REIT values.  

After a great first nine months of the year, the market is showing signs of strain and fears about an economic slowdown. There is also lingering fear from last year’s fourth-quarter market correction. Investing for dividend growth may be the best path to close out 2019 and into the new year.

Most REITs that regularly increase dividends do so once a year, and then pay the new dividend rate for the next four quarters. The timing of dividend increases is not widely followed, so if you know a bump in the payout rate of a REIT is coming, you can buy shares before the announcement and have a good chance at a nice share price boost when the new rate becomes actual news.

One of my income stock analysis techniques is to develop and maintain a database of REITs that tracks when, during the year, they have historically announced new dividend rates.

Currently, I have about 130 REITs in the database, and out of those, 90 have been increasing their payouts to shareholders.

While these REITs announce new dividend rates once a year, the timing varies. For every month of the year, there are companies that will announce a new rate.

Now is the time to look at the REITs that should increase dividends in November. If you buy shares three to four weeks ahead of the dividend announcement, you will be ahead of the crowd. The higher rate should produce a share price increase. In the worst case, your yield will go up compared to the current percentage quoted.

Here are three REITs that will most likely announce dividend boosts in November.

Acadia Realty Trust (AKR) acquires, redevelops, and manages retail properties in the nation’s most dynamic urban and street-retail corridors, including those in New York, San Francisco, Chicago, Washington DC, and Boston.

Acadia Realty will announce its third-quarter earnings results at the end of October. The new dividend rate announcement occurs during the first half of November.

For the last six years, the dividend has been bumped up by one cent, which would be a 3.6% increase on the current $0.28 per quarter dividend.

The payment of the new rate starts in January with a December 31st record date. This REIT has also paid a special year-end dividend three out of the last five years.

AKR currently yields 3.9%.

American Assets Trust, Inc. (AAT) owns, operates, acquires and develops retail, office, multifamily and mixed-use properties in high-barrier-to-entry markets in Southern California, Northern California, Oregon, Washington, Texas, and Hawaii.

This REIT has announced a higher dividend at the end of October or in early November of each of the last six years. In 2018 the new dividend was 3.7% higher than the old payout.

It looks like this year’s increase will be about 5%. The next dividend announcement will be around November 1st and has a record date of about December 10th.

The payment will be just before or just after Christmas. AAT currently yields 2.4%.

Kimco Realty Corp (KIM) owns and manages open-air shopping centers. This REIT slashed its dividend in 2009, during the financial crisis, but has increased it every year since then until 2018, when it didn’t announce an increase.

Kimco had increased the dividend by 7% on average for the previous five years, before not announcing an increase in 2018.

The company’s adjusted FFO per share was flat in the first half of 2019 compared to the same period in 2018, so it is uncertain the amount of any increase. The current dividend is just 75% of AFFO/share, so there is plenty of capacity for dividend growth. Kimco announces a new dividend rate at the end of October or in very early November with record and payment dates in January.

KIM currently yields 5.5%.

Pay Your Bills for LIFE with These Dividend Stocks

Get your hands on my most comprehensive, step-by-step dividend plan yet. In just a few minutes, you will have a 36-month road map that could generate $4,804 (or more!) per month for life. It's the perfect supplement to Social Security and works even if the stock market tanks. Over 6,500 retirement investors have already followed the recommendations I've laid out.

Click here for complete details to start your plan today.

Source: Investors Alley

Three Oil Stocks to Pick Up The Slack From the Loss of Saudi Production

On Saturday, September 14, Saudi Arabia’s largest crude oil processing facility at Abqaiq, was attacked by at least 30 drones and cruise missiles. The attack shut down about one-half of the country’s oil production capacity, which is 5% of the world’s daily production and consumption. When trading markets opened on Monday, crude oil prices jumped by 14%.

However, within a couple of days, crude was back trading at just a couple of dollars per barrel above the pre-attack price. I am shocked that the markets are that unconcerned about an attack that shut down 5% of the world’s oil supply.

The reason that crude oil, which saw WTI peak at almost $63 on Monday, is back trading in the high $50s is that Saudi Aramco management has promised to get the lost production quickly back online. From what I have read, this may not be feasible.

It is my opinion that Saudi Arabia will sell oil from its reserves and try to get Abqaiq back up to full capacity in a few weeks. This may be very, as in too, optimistic and the country could quickly exhaust its reserves and leave the world supply with a continuing shortage with a much smaller safety net.

Related: What’s In Store For Oil Now That Half of Saudi Arabia’s Production is Offline?

Another concern is that oil traders seem to be completely ignoring the potential for another attack. I am a former Air Force pilot, and my thoughts are that when the attackers see that 30 drones and cruise missiles didn’t get the job finished, I would start to ready the next one with 60 drones and missiles.

The powers behind the first attack want to shut down the capitalist world. The capitalists trading oil seem to have blinders on that their way of life has been attacked.

I think the world of oil traders is insulated from the dangers of the world and are underpricing the risks to crude oil. There is a strong possibility of another event that will drive the price of a barrel of crude much higher, and the next time it will stay higher. Here are three dividend-paying stocks that would benefit from higher oil prices.

Royal Dutch Shell (RDS.A) (RDS.B) is a global energy producer that would be a significant beneficiary of another or continued production reductions out of Saudi Arabia.

The company is truly a global producer with production areas in the Gulf of Mexico, Canada, Norway, Malaysia, Nigeria, Brazil, and Russia.

Royal Dutch Shell appears to be a prime player to provide oil to end-users that find they are not getting what they need from Saudi Arabia.

RDS shares currently yield 6.4%.

Occidental Petroleum Corp. (OXY) is a crude oil and natural gas production company whose share price is down 40% since it announced earlier this year that the company would acquire Anadarko Petroleum Corp. The merger is now complete. OXY is a global energy producer with a large footprint in the U.S. Permian, Rockies and Gulf of Mexico production areas.

The U.S., especially the Permian, is where most of the world’s crude oil production growth is being fueled.

Higher oil prices will allow the Permian and other U.S. production areas to ramp up their growth further.

OXY shares currently yield 7.0%.

Plains All American Pipeline LP (PAA) is a master limited partnership (MLP) that owns the largest independent crude oil pipeline and storage network in the U.S.

The company is a major mover of crude oil out of the Permian.

The company has additional pipelines under development and typically partners with crude oil end users as partners in any new projects.

While the company doesn’t count on the results of its Logistics Division to support the dividend, this trading business can generate huge profits when energy prices get disrupted.

PAA currently yields 6.6%.

Pay Your Bills for LIFE with These Dividend Stocks

Get your hands on my most comprehensive, step-by-step dividend plan yet. In just a few minutes, you will have a 36-month road map that could generate $4,804 (or more!) per month for life. It's the perfect supplement to Social Security and works even if the stock market tanks. Over 6,500 retirement investors have already followed the recommendations I've laid out.

Click here for complete details to start your plan today.

Source: Investors Alley

The Home Run Stocks Wall Street Doesn’t Want You To Know About

Imagine there’s a stock that’s up nearly 30-fold since 2000 and not a single Wall Street investment analyst follows it.

This investment has crushed just about every hedge fund out there, yet Wall Street is entirely unaware of it.

Worst of all, it’s stock in a company that’s known by many. It’s a favorite of people who work on Wall Street.

The stock I’m talking about is Nathan’s Famous (NATH).

That’s right, the hotdog place. It’s a New York institution. Not only that, it’s a July 4thinstitution. They sponsor the annual July 4thhotdog-eating contest. When you have a moment check out the ESPN video of this year’s contest featuring record-holder Joey Chestnut.

Nathan’s is currently in its 102nd year of business. The hotdog stand was started by a guy named, wait for it, Nathan. In this case, Nathan Handwerker.

Today, there are tons of Nathan’s located across the country, and several locations around the world. (Earlier this year, I was at the location near Manila in the Philippines.)

I bet you didn’t know Nathan’s has also been an astounding winner.

In late 2000, shares of Nathan’s were going for $2.50 apiece. Lately, Nathan’s is going for $70 each. (That’s down from its high of $107.)

Nathan’s is what we call an “Orphan Stock.” That means that it has zero or near-zero analyst coverage.

I love Orphan Stocks. They’re a great place to find overlooked values. Consider a stock like Amazon (AMZN). I love Amazon, and I wish I had bought it years ago, but what new information can I find on the company now?

Amazon is already worth $900 billion. There are 50 firms in Wall Street that follow the stock. The stock basically lives in a glass fishbowl. That’s not the case with Nathan’s which, despite its name, apparently isn’t as famous as I thought.

How can a stock rise so much for so long and no one on Wall Street has ever thought to start covering it? Part of the reason is probably because they don’t bring Wall Street any investment banking business.

That’s more of a plus than a minus. It suggests the company hasn’t entered into any unwise mergers. Or taken on too much debt. Or has been acquired at a poor price. Not needing a banker is hardly a bad thing.

Every earnings season, investors gather to see what companies have beaten expectations and what companies have fallen short. It’s interesting because a company can have a lousy quarter, but as long as it was less lousy than expected, then it can be a good quarter for its stock. Investors are expecting expectations.(awkward sentence) maybe; investors are expecting the stock to meet expectations.

With Nathan’s and other Orphan Stocks, there’s nothing to expect. Why? Because no one follows them. For an investor, that’s another bonus. They don’t have to worry about the Wall Street earnings game.

Have you ever heard of Atrion (ATRI)? Don’t worry. You’re not alone.

Atrion is a medical products company based in Dallas. Even though they’re small ($1.5 billion market cap), they’re active in some very niche markets like soft contact lens disinfection cases. Ever wonder who makes valves for life vests? There’s a good chance it’s Atrion. I particularly like that Atrion has wide operating margins.

Thirty years ago, you could have picked up one share of ATRI for $6. Recently, the stock got up to $927 per share. A few weeks ago, Atrion boosted its dividend by 15%.

Now I’m going to ask you a straightforward question: Guess how many firms on Wall Street cover Atrion? I’ll give you a hint. It’s the same as Nathan’s.

That’s right. Zero.

Let’s also remember how hard the financial crises blew through Wall Street. The big houses simply don’t have the big research departments that they used to. The budgets have been cut back. As a result, there are lots of companies that get no analyst coverage.

Many Orphan Stocks have been orphaned for good reasons; they’re not very good. But if you look closely, there are many incredible orphan stocks like Nathan’s Famous and Atrion.

With fewer eyes watching, it’s easier to find overlooked gems. Make sure there are some Orphan Stocks in your portfolio.

Pay Your Bills for LIFE with These Dividend Stocks

Get your hands on my most comprehensive, step-by-step dividend plan yet. In just a few minutes, you will have a 36-month road map that could generate $4,804 (or more!) per month for life. It's the perfect supplement to Social Security and works even if the stock market tanks. Over 6,500 retirement investors have already followed the recommendations I've laid out.

Click here for complete details to start your plan today.

Source: Investors Alley

Stock Research Made Simple