The Schwab US Dividend Equity ETF (SCHD) is about to create a lot of stock market winners. In this report, we review five reasons why it is a superior strategy for many investors right now (including its volatility characteristics, current market conditions, dividend flows, tax advantages and clear practicality benefits), plus one critical risk factor investors need to consider. We conclude with our strong opinion investing.
Top 10 Big-Yields (November Update) Members
Despite macroeconomic concerns, the stock market has continued to post strong gains this year thereby leaving some investors wondering if it’s time to take some chips off the table. One popular approach is owning attractive big-yield investments (6% to over 10% yields) that will continue to pay high income regardless of what happens in the broader market. In this report, we provide an overview of “frothy” market conditions (e.g. valuation metrics) and then countdown our top 10 big-yields (including BDCs, stock and bond CEFs, REITs and more). We conclude with a critical takeaway that is sadly overlooked by many.
PDI: The Big ROC Bath, 13.1% "Yield"
They often say “you don’t want to see how the sausage is made,” but in this report we are going to look under the hood at PIMCO’s Dynamic Income Fund (PDI) to see how this popular closed-end fund (“CEF”) really generates that big 13.1% “yield” (paid monthly). We put “yield” in quotes because it’s really an artificially manufactured “distribution” that recently included a massive amount of taxable return of capital (“ROC”) something many investors try to avoid like the plague. After reviewing the fund, the distribution and the risks, we conclude with our strong opinion on investing.
Ares Capital: 25+ Big-Yield BDCs Compared (Earnings Season Edition)
Income-focused investors are frequently attracted to business development companies (“BDCs”) for their large dividend payments. And among BDCs, Ares Capital (ARCC) is the stalwart blue chip that leads the industry (and currently offers a big 9% dividend yield). But before you invest in Ares, let’s take a closer look at what they do and how they compare to peers (especially ahead of this upcoming BDC earnings season). In this report, we review the business, the current market environment (especially fixed-versus-floating interest rate dynamics, plus rising non-accruals), what we like and don’t like (i.e. risks) and then conclude with our strong opinion on investing.
Update: Top 10 Growth Stocks, Disciplined Growth Portfolio
Climbing the Wall of Worry: The S&P 500 was up another 1.5% this week (and now +22% year-to-date) despite major jitters over the US election in just three weeks. We have updated our Top 10 Growth Stocks and our Disciplined Growth Portfolio to reflect new opportunities and continuing confidence in the long-term economy (despite a never-ending drumbeat of short-term naysayers). If you are looking for two minutes of fame, go ahead and hide in cash until the next market correction (which may be in two days, two years or two decades), but if you are looking to keep building long-term wealth, the ideas in this report are absolutely worth considering.
Albemarle: Lithium Supply Cycle
This lithium miner (with a strong tie in to electric vehicle batteries) has gone from “loved” (at over $300 per share in 2022) to “hated” (now trading at around $100). But what many investors may not fully appreciate is the massive lithium supply cycle swing, which now places Albemarle in an interesting position going forward. In this report, we review the business, the lithium supply cycle, current market dynamics and risks. We conclude with our strong opinion on investing.
Eli Lilly: The Bull Case is Compelling
Despite the recent “dip” (shares are trading 20% below recent all time highs), Eli Lilly remains a very attractive company and compelling investment opportunity (e.g. blockbuster weight-loss drugs, wide moat, massive growth, attractive valuation). In this report, we share the bull case (plus a few bear case arguments, for balance). Let’s get into it.