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Crucial: My No. 1 Buy for 8.5% Dividends and 20% Gains (by 2019)


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By Michael Foster

I donaEURtmt want to alarm you, but if youaEURtmve got a lot of cash sitting on the sidelines right now, youaEURtmre about to miss out on a double-digit stock-market gain in the next 6 months.

In a moment, IaEURtmll show you 5 funds you can buy today to lock in these quick, life-changing profits (and dividend payouts, too). To make it even easier for you, IaEURtmve ranked these 5 popular buys from worst to first.

But first, let me tell you what IaEURtmm basing this bold prediction on. The story starts in early February of this year.

You no doubt recall those wild days: after a sharp run-up in stocks in January, which itself was on the heels of a 23% gain for the S&P 500 in 2017, the SPDR S&P 500 ETF ( SPY ) suddenly did this:

A Nosedive


Panic was in the airaEUR"so much so that I was getting calls from worried family and friends asking me what was causing the selloff and what it meant for their retirements ( I wrote about that in this article ).

My response: aEURoeIt means nothing.aEUR

ThataEURtms also what I told readersaEUR"I explained how there was a bit of profit-taking and a much-needed break from the bull market weaEURtmd enjoyed for so long. And I also said that stocks would recover long before the end of 2018aEUR"a theme I wrote about again even as the market kept falling in February and again in March .

And now the market is doing this:

The Recovery Kicks In


I donaEURtmt have a crystal ballaEUR"I have something better: data. A lot of it. And itaEURtms telling me you need to act now if you want to grab your share of the profits from aEURoestage 2aEUR of the 2018 market boom.

Your Buy Window Is Closing Fast

Whether itaEURtms corporate profits (which rose to a record high in the first quarter of 2018 and are set to rise again in Q2), falling unemployment (now at a shockingly low 3.8%) or wage growth (which is reaching 3%), the signs of a resurgent economy were all there in early February.

On top of that, the S&P 500aEURtms forward P/E ratio was 17aEUR"lower than itaEURtms been for most of the last 30 years, even though the index is now dominated by tech companies boasting higher P/E ratios.

All of that screamed aEURoebuy.aEUR

Fast-forward to today, and the market has finally realized that, yes, the economy is strong, which means your window to buy into the recovery is closing fast.

But donaEURtmt worry: itaEURtms not closed yet.

With continued economic strength lifting most US firms, thereaEURtms plenty of reason to expect stocks to end the year up at (or at least near) double digits.

So how do we get in before itaEURtms too late?

5 Funds to Play the ReboundaEUR"Ranked From Worst to First

The obvious candidate (and worst of my 5 picks) would be an index fund. You can take your pick here, SPY or the Vanguard 500 ETF ( VOO ) . Both will get you the same thing: market-matching performance and a pretty sad 1.8% dividend.

Next up is the Invesco QQQ Trust ( QQQ ), which gives you a growth burst through its exposure to the tech companies of the Nasdaq 100 index, including the big payment giant Visa ( V ), which is up a handsome 16.7% so far in 2018. QQQ is already up a nice 11.9% for 2018 after falling into negative territory in early February.

But you are sacrificing income to get that growth: the fund yields just 0.75% as I write.

A slightly better option is the iShares S&P 500 Growth ETF ( IVW ) , which goes beyond tech stocks while focusing on companies that are seeing the biggest sales growth and dodging aEURoeold-economyaEUR laggards like Xerox (XRX) and Time Warner (TWX). Its dividend, at 1.5%, is above that of QQQ but still behind the index funds.

IaEURtmm sure youaEURtmre seeing a theme here, and itaEURtms a major downside with all 3 of these funds: if you want a meaningful income stream, youaEURtmll have to supplement their meager dividends by selling your shares.

Trouble is, youaEURtmll have to be very careful not to do so into a downturn. And that kind of market timing is beyond the reach of most mortals, which gives my top ETF pick a decided edge.

IaEURtmm talking about the iShares Core High Dividend ETF (HDV) . Its 3.8% yield is far ahead of the payouts on the 3 funds I just showed you, and it also offers exposure to American large-cap firms boasting either a long history of growing dividendsaEUR"such as Johnson & Johnson (JNJ) and Pfizer (PFE) aEUR"or big yields right now, like Verizon (VZ) and AT&T (T) .

And since HDV still hasnaEURtmt recovered for 2018 (itaEURtms down 5.6% year to date), itaEURtms a great bet for the contrarian who sees a market-wide recovery in the future, as I do.

My #1 Pick: Buy NOW for 8.5% Dividends and 276%+ Gains

But I have to tell you something here: I still have one serious reservation about HDV: itaEURtms just a little too focused on aEURoeold economyaEUR stocks and underweight on the tech and biotech firms setting the pace for tomorrowaEURtms economy.

And that could set the stage for a steady drip lower while the rest of the market races away.

Luckily, my No. 1 fund pickaEUR"which IaEURtmm going to tell you about nowaEUR"doesnaEURtmt have that problem. ItaEURtms got all the tools to lead the market higher in the critical 6 months to come!

This off-the radar biotech champ has obliterated SPY in the last decadeaEUR"and thataEURtms just the start:

A Market Dominator


You see, because this chart includes dividends, most of this monstrous return was in CASH, so owners didnaEURtmt have to worry about selling shares into a crash (hello, 2008/09), like SPY holders did.

And those dividend payouts are still massive: this fund currently yields a mind-blowing 8.5%aEUR" nearly 5 TIMES as much as SPY. Oh, and it drops those fat cash payouts into your account monthly too!

IaEURtmm not done yet.

The secret behind this off-the-radar fund lies in its very structure: itaEURtms a closed-end fund (CEF).

DonaEURtmt let the technical name fool you. All this really means is that this fund trades at a market price thataEURtms different than the value of its underlying holdings.

And right now, that difference amounts to a 5% discount. This is basically free money!

To sum up, hereaEURtms what youaEURtmre getting in this 5% aEURoemarkdown saleaEUR:

  • All the stocks in this fundaEURtms portfolioaEUR" rock-solid names with long histories of dividend growth, like Amgen (AMGN) and Gilead Sciences (GILD).
  • Market-crushing outperformance, with 276% gains (and most of that return in cash) over the last decade.
  • 1-click access to the top talent in biotech: this fundaEURtms manager, with more than two decades of experience himself, hires doctors and researchers with aEURoeboots on the groundaEUR expertise at finding the next breakthrough treatment.

IaEURtmll give you all the details on this breakthrough income play when you click here .

And thataEURtms still not all.

You see, this fund is part of a 5-fund aEURoemini-portfolioaEUR I crafted exclusively for members of my CEF Insider service. Now, for a limited time, IaEURtmll show it to you at no cost. Taken together, these 5 totally ignored CEFs will hand you a safe 8.2% yield now.

And, thanks to their ridiculous discounts, my team and I have each one pegged for easy 20%+ price upside in the next 12 months.

DonaEURtmt miss out. CLICK HERE to get the names, ticker symbols, buy-under prices and my complete research on these 5 income (and growth!) plays now .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



This article appears in: Investing , Options
Referenced Symbols: SPY , VOO , QQQ , V , IVW



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