The story I’m about to share with you today is one I’ve shared with my High-Yield Investing premium subscribers before. But I think it bears repeating, because something big and entirely unexpected happened a couple of weeks ago, and few investors noticed. And to put it simply, the implications could be huge for many income investors. #-ad_banner-#But more on that in a moment… The day before Thanksgiving in 1996, Rich Kinder left his post at Enron. He was disappointed that Kenneth Lay had passed him over for the CEO job. Soon after, an old college buddy, Bill Morgan, approached Kinder… Read More

The story I’m about to share with you today is one I’ve shared with my High-Yield Investing premium subscribers before. But I think it bears repeating, because something big and entirely unexpected happened a couple of weeks ago, and few investors noticed. And to put it simply, the implications could be huge for many income investors. #-ad_banner-#But more on that in a moment… The day before Thanksgiving in 1996, Rich Kinder left his post at Enron. He was disappointed that Kenneth Lay had passed him over for the CEO job. Soon after, an old college buddy, Bill Morgan, approached Kinder with a business proposition. Morgan had just bought some assets Enron had no use for: a couple of small pipeline systems and a coal terminal. He needed someone like Kinder to run the business. Kinder agreed, and the partnership was christened Kinder Morgan Inc. in February 1997. Kinder doubled the company’s market capitalization to nearly half a billion dollars by watching costs and shipping more volume through the pipelines. He did all of that in just seven months. Today, Kinder Morgan Energy Partners (NYSE: KMI) is a $35 billion business, operating more than 80,000 miles of pipeline and roughly 180… Read More

The world is on high alert for terror after the savage attacks in Paris that left 130 people dead and many others injured. This terrible act reminds us that there are more important things than money. Yet, I fear that terrorism itself is becoming a wild-card factor that all investors must weigh and consider. #-ad_banner-#Before Paris, ISIS claimed responsibility for taking down a Russian passenger jet returning from Egypt. Investigators combing through the wreckage discovered evidence of a bomb. And there has since been another attack within the past few days by al-Qaeda that left dozens dead at a Radisson… Read More

The world is on high alert for terror after the savage attacks in Paris that left 130 people dead and many others injured. This terrible act reminds us that there are more important things than money. Yet, I fear that terrorism itself is becoming a wild-card factor that all investors must weigh and consider. #-ad_banner-#Before Paris, ISIS claimed responsibility for taking down a Russian passenger jet returning from Egypt. Investigators combing through the wreckage discovered evidence of a bomb. And there has since been another attack within the past few days by al-Qaeda that left dozens dead at a Radisson Hotel in Mali. There have been other recent attacks in Nigeria, Denmark, Lebanon and Turkey. I don’t know what will happen in the days and weeks ahead. I would like to think that the worst is over. We all would. But common sense says otherwise. By all accounts this jihadi cancer is spreading, and it’s far more likely that the United States and other western nations will be drawn into further conflict. Normally, I would be talking to you about economic or financial matters today. To be sure, I’d much rather be discussing employment reports or factory orders. But my… Read More

We are nowhere near April 15th on the calendar. Still, for millions of taxpayers seeking to limit their liability this spring, the clock is ticking. The deadline to close out trades that went south to deduct capital losses is December 31.  Given the natural inclination of procrastinators to wait until the last minute, there is always a flurry of activity as millions of investors dump their losers in the final weeks of the year. Institutional mutual fund managers are also busy removing laggards and adding winners to window dress their portfolios.  #-ad_banner-#This doesn’t do much for performance — it is… Read More

We are nowhere near April 15th on the calendar. Still, for millions of taxpayers seeking to limit their liability this spring, the clock is ticking. The deadline to close out trades that went south to deduct capital losses is December 31.  Given the natural inclination of procrastinators to wait until the last minute, there is always a flurry of activity as millions of investors dump their losers in the final weeks of the year. Institutional mutual fund managers are also busy removing laggards and adding winners to window dress their portfolios.  #-ad_banner-#This doesn’t do much for performance — it is purely a cosmetic enhancement right before annual reports go out. So many stocks that struggle during the year are beaten down even further in December. Once the loss is harvested, the proceeds usually rotate back into the market shortly after, sometimes into the same stocks, as investors anticipate a rebound. Aside from tax harvesting in December and reinvesting in January, many workers also plow year-end bonuses into their accounts shortly after the New Year begins. All of this means that January is typically a good month for inflows into stocks and equity mutual funds. In fact, market observers as far… Read More

According to the U.S. Department of Labor, the economy added 211,000 jobs for the month. That’s good growth right on the heels of October’s job report, which, at 298,000 jobs for the month, was the strongest job creation this year, shattering estimates for around 180,000.  This is just one report. Still, when taken with other indicators such as job postings and unemployment claims, the big picture suggests a labor market that is firmly on the mend. The unemployment rate has fallen to 5.0%, the lowest level since April 2008. I should note that this figure doesn’t reflect the number of… Read More

According to the U.S. Department of Labor, the economy added 211,000 jobs for the month. That’s good growth right on the heels of October’s job report, which, at 298,000 jobs for the month, was the strongest job creation this year, shattering estimates for around 180,000.  This is just one report. Still, when taken with other indicators such as job postings and unemployment claims, the big picture suggests a labor market that is firmly on the mend. The unemployment rate has fallen to 5.0%, the lowest level since April 2008. I should note that this figure doesn’t reflect the number of people on the sidelines that have stopped trying to look for work. The labor force participation rate of 62.4% is still the lowest in 38 years. But after a summer lull, recent strong job growth is an encouraging sign. Even better, average hourly wages have also ticked up by $0.09 (or 2.5%) to $25.50 per hour. It’s been a long time since we’ve seen any upward pressure on wages.  The main upshot of this is the U.S. Federal Reserve now has a stronger argument in favor of lifting interest rates at the December meeting. Based on testimony from Chair Janet… Read More

I get a lot of questions each month from subscribers to my premium income newsletter, High-Yield Investing. With such a devoted following, I make it a point to read every single message. And every once in a while, I’ll come across a question from a subscriber that I think is worth sharing. #-ad_banner-#The following came across my desk from a subscriber, Megan P. from Phoenix, asking whether the strong dollar would present some attractive opportunities for investors. Q: Are there any high-quality dividend payers temporarily hurt by the strong U.S. dollar that could be attractive turnaround candidates? Here was my… Read More

I get a lot of questions each month from subscribers to my premium income newsletter, High-Yield Investing. With such a devoted following, I make it a point to read every single message. And every once in a while, I’ll come across a question from a subscriber that I think is worth sharing. #-ad_banner-#The following came across my desk from a subscriber, Megan P. from Phoenix, asking whether the strong dollar would present some attractive opportunities for investors. Q: Are there any high-quality dividend payers temporarily hurt by the strong U.S. dollar that could be attractive turnaround candidates? Here was my answer… Yes, there are some strong turnaround candidates that have taken a hit recently, and I’m tracking a few of them for my portfolio. For some background, the strong dollar has been a thorn in the side of many large multinational companies over the past few quarters. A stronger greenback not only makes exported goods less competitive overseas, but also erodes the value of sales conducted in foreign markets when revenues denominated in yen, euros and rubles are converted back into dollars. One such opportunity is Genuine Parts Company (NYSE: GPC). This specialty retailer is best known for… Read More

Analysts have been trying to predict when the Federal Open Market Committee (FOMC) will raise interest rates for years now, but no real steps have been taken… yet. The next chance for the Fed to decide to raise rates is coming up this month, and many believe it will actually happen this time.   So how do you react? Do you play it safe and settle for whatever short-term yield you can get, or roll the dice and bet on longer-term securities with higher payouts? The more cautious approach will earn you next to nothing in this meager environment. The… Read More

Analysts have been trying to predict when the Federal Open Market Committee (FOMC) will raise interest rates for years now, but no real steps have been taken… yet. The next chance for the Fed to decide to raise rates is coming up this month, and many believe it will actually happen this time.   So how do you react? Do you play it safe and settle for whatever short-term yield you can get, or roll the dice and bet on longer-term securities with higher payouts? The more cautious approach will earn you next to nothing in this meager environment. The average 12-month bank CD is currently paying a paltry 0.27%. A one-year Treasury will only get you double that, about 0.50% — that’s just $500 in annual income on a $100,000 investment. Good luck living off that. On the bright side, at least your principal will be secure if and when rates finally do start to climb. On the other hand, you can find corporate bonds paying almost ten times as much. The average 20-year A-rated corporate bond is currently yielding 4.4%. That’s $4,400 in annual income instead of $500. Now we’re talking. Unfortunately, these bonds won’t mature for another… Read More

The 30-year U.S. Treasury Bond is quite possibly the worst investment option out there right now… even your Uncle Dave’s coin and baseball card collection might offer better long-term returns. Let’s forget for a moment about the Fed’s intention to raise interest rates, possibly as soon as December (which will put downward pressure on bond prices). And let’s forget that the longer a bond’s duration, the greater its sensitivity to interest rate movements. So with every basis point uptick, nothing will feel the pain more acutely than the 30-year “long bond.” Let’s even forget that Uncle Sam’s credit rating has… Read More

The 30-year U.S. Treasury Bond is quite possibly the worst investment option out there right now… even your Uncle Dave’s coin and baseball card collection might offer better long-term returns. Let’s forget for a moment about the Fed’s intention to raise interest rates, possibly as soon as December (which will put downward pressure on bond prices). And let’s forget that the longer a bond’s duration, the greater its sensitivity to interest rate movements. So with every basis point uptick, nothing will feel the pain more acutely than the 30-year “long bond.” Let’s even forget that Uncle Sam’s credit rating has already been downgraded by at least one ratings agency in the past… Even if interest rates don’t rise and Congress miraculously balances the budget — a best-case scenario, if you own Treasurys — you’re still tying up your capital for the next three decades at a paltry rate of around 3%.  But here’s the kicker: when your principal is finally repaid in the distant future, those dollars will have lost much of their purchasing power. Just ask anyone who bought one of these bonds back in 1983. Let’s say they loaned the government $30,000 — enough money to buy three… Read More

When Carl Icahn speaks, people listen. In March, the legendary investor disclosed that he had bought a 52% ownership stake in a small digital marketing firm called Voltari (Nasdaq: VLTC) to his legion of 250,000 Twitter followers. One month later, the stock had already surged more than 800%. Granted, that is an extreme example. But you can understand why investors were quick to bid shares of the little-known company up so quickly. Icahn is the world’s 31st richest individual, with a net worth estimated at $21 billion. That personal wealth didn’t come from oil or computers or shipping. It came… Read More

When Carl Icahn speaks, people listen. In March, the legendary investor disclosed that he had bought a 52% ownership stake in a small digital marketing firm called Voltari (Nasdaq: VLTC) to his legion of 250,000 Twitter followers. One month later, the stock had already surged more than 800%. Granted, that is an extreme example. But you can understand why investors were quick to bid shares of the little-known company up so quickly. Icahn is the world’s 31st richest individual, with a net worth estimated at $21 billion. That personal wealth didn’t come from oil or computers or shipping. It came from activist investing. #-ad_banner-#The guy just made $2 billion on Netflix (Nasdaq: NFLX) alone, with the video streaming company’s shares soaring 12-fold during his ownership tenure. Icahn’s moves have greatly enriched his investors as well. With annualized returns of 17.4% since 2000, his fund has racked up a cumulative gain of 1,339% — crushing the Dow Jones Industrial Average, the S&P 500, the Nasdaq Composite, and even the legendary Warren Buffett. You can invest alongside Icahn through Icahn Enterprises (NYSE: IEP) a holding company with ownership stakes in a diverse array of industries, including automotive, energy, metals and gaming. The… Read More

​As someone who was taught as a kid to hate waste, I love efficiency. That means doing little things that enable me to run my household for less — and deposit the savings into my portfolio. I wouldn’t necessarily call it penny pinching, just a conscious effort to maximize the return from every dollar spent. As an investor, I look for managers with the same mindset because even minor improvements with multi-billion dollar organizations can mean a big difference on the bottom line. #-ad_banner-#​Take UPS (NYSE: UPS), for example. In an effort to increase efficiency, the… Read More

​As someone who was taught as a kid to hate waste, I love efficiency. That means doing little things that enable me to run my household for less — and deposit the savings into my portfolio. I wouldn’t necessarily call it penny pinching, just a conscious effort to maximize the return from every dollar spent. As an investor, I look for managers with the same mindset because even minor improvements with multi-billion dollar organizations can mean a big difference on the bottom line. #-ad_banner-#​Take UPS (NYSE: UPS), for example. In an effort to increase efficiency, the company has used technology to optimize delivery routes, calculating that a reduction of one mile per driver per day can save $50 million a year. You can’t get at the heart of this important concept by looking at familiar measures like operating margins and earnings. Those earnings must be placed in the proper context. Suppose there are two popular restaurant chains vying for a spot in your portfolio. One posted $515 million in net income last year, while the other earned $710 million. We can’t draw many conclusions from this information alone, except that the second business… Read More

For the past 40 years, this firm has become an elite source of income for investors, thanks in large part to the 543 consecutive monthly dividends it has paid. I’m willing to bet most of you have never heard of it. Yet the company I’m referring to has become the very definition of a monthly dividend-paying stock. It’s never missed a single one of its monthly dividends since 1969, shelling out more than $3.5 billion to shareholders during its 40+ year run. And that payout has increased 81 times during that span as well. I’m talking about Realty Income Corp… Read More

For the past 40 years, this firm has become an elite source of income for investors, thanks in large part to the 543 consecutive monthly dividends it has paid. I’m willing to bet most of you have never heard of it. Yet the company I’m referring to has become the very definition of a monthly dividend-paying stock. It’s never missed a single one of its monthly dividends since 1969, shelling out more than $3.5 billion to shareholders during its 40+ year run. And that payout has increased 81 times during that span as well. I’m talking about Realty Income Corp (NYSE: O). Despite this impressive and consistent track record, you may be wondering why you’ve never heard of the company before. That’s because Realty Income is a real estate investment trust (REIT).  The average investor on the street has probably never heard of this lucrative asset class, but it’s exactly the kind of off-the-radar investment I look for to deliver market-beating income in my premium advisory, High-Yield Investing.  You see, thanks to their unique structure, REITs are obligated by law to pass along 90% of their income to investors — in the form of dividends.  That means a company like… Read More