Dividend Income

ETF Battles: DVY vs. DGRW, Who Wins?

This is an excerpt from ETF Battles on ETFguide TV between DVY vs. DGRW – two stock dividend ETFs.  Who wins the battle? More investors are getting their dividend income via exchange-traded funds (ETFs).  Yet, getting dividend cash flow is becoming ever more challenging as more publicly traded companies and real estate investment trusts (REITs) …

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Retirement Pro: Think Cash Flow, Not Rate of Return

This is an excerpt from the video titled Think Cash Flow, NOT Rate of Return with Lynn Dolan at ETFguide and Mark Mappa, CFP and Author of Cash Flow is King. Lynn: Cash flow is important for everyone. But it’s especially important for retirees as income from working turns off and income from retirement savings …

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5 Building Blocks for Your Investment Portfolio

The difference between well-built and poorly designed buildings can be strikingly drastic. Take for example, I.M. Pei, the Chinese-American architect, who is a legend in his profession and has won many prestigious awards, including the Pritzker Prize. Among all the illustrious structures he’s designed, the Rock and Roll Hall of Fame in Cleveland, OH is the …

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4 Moments When “Stay the Course” is the Wrong Investment Advice

The worst January start for U.S. stocks since 2009 should get your attention. If you’ve been hiding underneath a rock or hibernating in a cave-like dwelling, it’s time to come out. “A little sunlight is the best disinfectant,” as Judge Brandeis might say. Most global stock yardsticks from China (NYSEARCA:ASHS) to Japan (NYSEARCA:EWJ) and even the United …

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What’s Your Income Plan?

For just the fourth time in 50 years, the S&P 500’s (NYSEARCA:IVV) dividend yield was briefly more versus 10-year U.S. Treasuries (ChicagoOptions:^TNX). It’s another testament to the difficult climate facing bond investors (NYSEARCA:BOND) who want to generate a respectable level of income. For good reason, more people are employing alternative income strategies like selling covered calls. The covered call technique (also …

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How to Improve Your Investment Performance by Playing Defense

“The best defense is a good offense.” That axiom has been applied in a broad array of fields including politics, sports, and the military. The 1985 Chicago Bears are still regarded as one of the NFL’s best defensive teams ever. Not only did they lead the league in defenses that score, but the Bears defensive …

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Ocean Waves

Bull Market in Borrowing: Corporate Debt Skyrockets to $9.6 Trillion

How healthy are corporate balance sheets? It depends who you ask. One news outlet said that U.S. firms are hoarding a record $1.6 trillion in cash led by Apple, Google, and Microsoft. Shockingly, that same report made no mention of corporate debt levels, which are also at all-time records. During the previous 2009 recession high, …

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Boxer Vintage Mecca Card

How to Beat the Low Yield Cycle

How would you like an 11% cut to your paycheck? That’s exactly what’s happened to income investors who own long-term Treasuries (ChicagoOptions:^TYX). At the beginning of the year, 30-year U.S. Treasury yields (NYSEARCA:TLT) were above 3.90% but have trended lower. That’s not what income investors who piled into long-term Treasuries were expecting. Their plan was to capture more …

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Financial Geek

Stock Prices Are Cheap! Valuation Geeks Get it Wrong Again

“Stocks are cheap by historical standards” is the latest fiction being promoted by valuation geeks. Is it true? Meb Faber, proprietor of the Cambria Global Value ETF (NYSEARCA:GVAL), and a valuation guru tweeted the 5-year CAPE ratio for the usually frothy technology sector (NYSEARCA:XLK) is just 22 today compared to an elevated 96 at the height …

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Portfolio diversification

3 Steps to Beating the Retirement Income Shortage

One definition of insanity is doing the same thing over and over while expecting a different result. This is an apt description of retirement income investors who definitely want and need more dividends, but are going about it in the wrong way. For bond investors (NYSEARCA:BOND), yields on 10-Year U.S. Treasuries (ChicagoOptions:^TNX) have slid almost …

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Beating the Dividend Income Drought

Will dividend yields test 1999 lows? That was the title of my post from a few weeks ago in which I explained to readers how the dividend income drought facing investors continues into 2014. Interestingly, the Federal Reserve’s initiation of ZIRP (zero interest rate policy) on Dec. 16, 2008 wasn’t the beginning of the bear …

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3 Big Shortcomings of Target Date Funds

Around 41% of all 401(k) savers have are using target-date mutual funds (TDFs) and the numbers keep rising. Experts in the financial services industry applaud this trend, but are target-date funds really the panacea to a secure retirement income? TDFs attempt to match a person’s age and risk tolerance with a projected retirement date. For …

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Smart Beta Investing: New Paradigm or Word Trick

Is so-called smart beta investing a new and improved way to invest or just another one of Wall Street’s fancy sales pitches? Smart beta strategies (formerly known as “fundamental indexing”) in the investment world generally fall into two camps: 1) Indexes that use a one-dimensional or simple formulas, like equal weighting all the stocks within a benchmark like the …

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How Much Money is Enough for a Comfortable Retirement?

In 2011, the oldest members of the Baby Boom generation reached retirement age and over the next 15 years, around 8,000 Boomers per day will turn 65. And as more Americans contemplate life in retirement and preparing for it, they need to have a clearer picture of what their income (NYSEARCA:AGG) needs will be after …

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Will Dividend Yields Test ’99 Lows?

The past six years have been brutal for dividend and income investors. Zero percent interest rates have depressed bond yields (NYSEARCA:BOND) and with major stock indexes (^DJI) now trading at all-time highs, dividend yields relative to prices have fallen too. Last year, the number of S&P 500 (NYSEARCA:SPY) stocks paying a dividend touched a 17-year …

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Valuation Models Say Stock Market Losses Ahead

Overpaying for anything is a bad idea. But it’s an especially bad thing when it comes to investing in the stock market. James Montier at GMO correctly observes: “Over the years I’ve witnessed many attempts by the practitioners of this most dark art to justify why tried and tested measures of valuation are no longer …

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Are Corporate Earnings Being Gamed?

Are corporate earnings really as great as the executives at the helm and Wall Street want us to believe? Over 70% of S&P 500 (^GSPC) companies that have already reported beat analysts’ earnings estimates during the fourth quarter. Furthermore, 66% reported higher sales revenue, which is above four year averages, according to FactSet.  Equity permabulls …

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Portfolio diversification

Are Covered Call Funds a Smart Income Play?

What’s better? A covered call options strategy executed by the individual investor or a covered call ETF or fund that proposes to do the heavy lifting? Selling covered calls is a popular investment technique used by investors with high income or cash flow as their primary goal. The investor is “covered” because they own the …

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