By Brett Owens
Today IaEURtmm going to give you everything you need to sail through the next crash, crush the S&P 500 by this time next yearaEUR"and grab safe dividends up to 8.4%.
WeaEURtmll pull off this aEURoedividend hat trickaEUR through a set of aEURoepullback-proofaEUR investments with dividends up to 5 times bigger than what your typical S&P 500 stock pays.
In a moment, IaEURtmll reveal three funds yielding up to 8.4% that are more than worthy of your attention now. They come from a corner of the market that will surprise you.
First, though, you might be wondering how I found these big, steady payouts.
The answer is that these three funds have a lot in common with the seven aEURoebest buysaEUR I released one year ago, in the June 2018 issue of my members-only Contrarian Income Report service.
And how did those seven do?
Just fine! They yielded an outsized 7.2%, on average (with the biggest yielder of the bunch paying 8.2%), when I pounded the table on them a year back.
ThereaEURtms more, though.
Because these aEURoemagnificent sevenaEUR went on to do something income plays simply arenaEURtmt supposed to do : crush the S&P 500!
Since I recommended these seven stocks to CIR members a year ago, theyaEURtmve returned 14%, on average, including dividends, clobbering the indexaEURtms 11%. And these stocksaEURtm big payouts mean CIR members got a big slice of that return in cash!
And remember, that 14% was just the average . Check out some of the amazing performances the top names put up:
Highest Yielders Dominate
To be clear, these three stocksaEUR" Blackstone Mortgage Trust ( BXMT ), in blue, Medical Properties Trust ( MPW ), in red, and Ladder Capital ( LADR ), in orange, led the way, while boasting the highest yields of our seven picks, at 7.9%, 7.6%, and 8.2%, respectively.
So much for the so-called aEURoewisdomaEUR that you can have income or gainsaEUR"but not both!A And these seven picksaEURtm outperformance isnaEURtmt even the best part.
This is: when the market fell off a cliff last September and stayed on its back till the end of the year, not a single one of these seven stocks fell as far as the S&P 500. One, Medical Properties Trust, even knocked out a double-digit return!
A Classic aEURoePullback-ProofaEUR Play in Action
In other words, all our CIR members had to do was sit back, pocket their 7.2% avera ge dividends and wait for the 2019 rebound!
Where IaEURtmm Investing NowaEUR"for Safe Payouts Up to 8.4%
But enough with history.
LetaEURtms look to the future, and one corner of the market where weaEURtmll find the next big dividends (and upside) heading into the back half of 2019. IaEURtmll also give you those three high-yield funds (with payouts up to 8.4%) I mentioned earlier.
Then, at the end of this article, IaEURtmll give you a chance to get the latest issue of Contrarian Income Report, just released last Friday, with my next seven portfolio aEURoebest buys.aEUR They come from across the investing universeaEUR"foreign stocks and bonds, US REITs and undervalued infrastructure plays, to name a few.
I fully expect these fresh seven picks to crush the market and protect your nest egg in the next 12 monthsaEUR"just like our previous septet did in the last 12!
America: A Dividend Desert
Before we get to that, though, we need to face facts: with the S&P 500 up 20% in the first six months of 2019, many of the big dividends have dried up here in America.
As I write, the typical S&P 500 stock yields 1.8%. Ten-year Treasuries are little better, paying less than 2% (and falling!).
Rate-Cut Talk Tanks Treasury Yields
And now the Fed is set to throw gas on the fire, with the market pricing in three to four rate cuts in the next nine months, starting with the FedaEURtms July 31 meeting:
As I wrote last week , in the rare instances when the Fed cuts rates in a rising market (like today), the result is usually higher stock prices.
So where the heck are we supposed to find bargain high yielders now?
WeaEURtmll dive into one area most income players have left untouched: emerging markets. But weaEURtmre not going to buy overseas stocksaEUR"weaEURtmre going to turn to safe, underappreciated EM bonds instead.
The CEF Advantage
No, I have no interest in hopping on a plane to scout out issues from Brazil, Indonesia or other foreign locales. Why would you when, with a click of a mouse, you can hire a top-notch fixed-income manager who will handpick an emerging-market bond portfolio for you?
ThataEURtms one advantage of tapping EM bonds through high-yielding closed-end funds (CEFs) . HereaEURtms another: unlike ETFs, CEFs canaEURtmt issue shares to new investors after their IPOs. But like ETFs, CEFs trade on the open market, like stocks.
The upshot? Occasionally a fund will fall out of favor and trade at a discount to the value of its underlying portfolio, known as the net asset value, or NAV.
Our job: buy when these markdowns get absurdly wide, then aEURoeride them upaEUR as they revert back to normal, yanking the share price higher as they do.
With that, here are three emerging-market CEFs I like now. Their yields all trounce the payouts on the S&P 500 and the 10-year, and their portfolios have all returned at least 7% annualized since inception.
Best of all, they set us up for further upsideaEUR"and downside protectionaEUR"thanks to their outsized discounts to NAV:
3 aEURoeGlobetrottingaEUR CEF Bargains Paying Up to 8.4%
In case youaEURtmre wondering how these three funds can sustain dividends up to 8.4%, let me clear that up, because it comes back to the discount to NAV I just mentioned.
The yields shown above are based on the CEFaEURtms market price. But that doesnaEURtmt matter to management: they only care about the aEURoeyield on NAVaEUR (or the yearly payout as a percentage of the per-share value of the fundaEURtms portfolio). ThataEURtms what dictates how much they need to earn from their bond holdings to cover the fundaEURtms dividend.
And when you calculate the yield on NAV, you see that these payouts are safe, with TEIaEURtms yield on NAV coming in at 7.3% (vs. 8.5% on market price), EMD at 7.4% (vs. 8.4%) and EHI at 6.9% (vs. 7.6%).
For pros like the ones running these rock-solid income plays, fetching annualized returns like those is a snap. TheyaEURtmve already proven it with their 7%+ annualized returns on NAV!
7 aEURoeBest BuysaEUR Set to Crush the Market Again (and yield up to 9%!)
As I said, I just released the names of my next 7 best buys from the Contrarian Income Report portfolio to CIR members. These picks are set to deliver even bigger returns than the market-dominators I pounded the table on a year ago!
Fatter dividend payouts! These 7 fresh aEURoebest buysaEUR yield 7.6%, on averageaEUR"and the top payer among them throws off an incredible 9.0% dividend!
How to Get These 7.6%+ Dividends Now
IaEURtmm ready to share the names of these 7 aEURoebest buysaEUR with you. TheyaEURtmre on page 12 of the latest issue of Contrarian Income Report, which was just released last Friday. To get yours, all you have to do is take a no-obligation trial to CIR today.
ThataEURtms not all: IaEURtmll also give you full details on my new 8% Monthly Payer portfolio . As the name suggests, with this aEURoeinstantaEUR diversified 8%-yielding portfolio, you get a safe 8% income stream that flows into your account every single month.
That means you could kick-start a $40,000-a-year income stream on a $500K nest egg! This is easily enough income for many folks to retire on.
DonaEURtmt miss out! Click here to get the names, ticker symbols, best-buy prices and more on the high-yield picks in my 8% Monthly Dividend portfolio. You can also sign up to try Contrarian Income Report and get the latest issue , including those 7 high-yielding aEURoebest buysaEUR (with market-beating upside) I mentioned earlier .