How To Retire On Dividends – Brett Owens (1)

But buying convertibles does require individual research. We prefer to “outsource” this task to experts, and again here, CEFs are our favorite way to buy convertibles. For example, asset manager Nuveen expanded its Preferred & Income Securities Fund’s mandate recently. Along with preferred securities, the fund began buying hybrids such as convertible securities. (The fund started purchasing debt that has options to convert to equity.) We didn’t worry about this mandate change because we trusted the management team. The SPDR Bloomberg Barclays Convertible Bond ETF (CWB) is the most popular mainstream vehicle to purchase convertibles.

It lets investors join this “country club” favorite and brag to their friends that they own a basket of convertible bonds. But if their friends are impressed, their accountants are not. Bloomberg Barclays Convertible Bond has, on the surface, been fine. It’s generated 159% returns over the last 10 years. Problem is, its stock market competition—the S&P 500—returned 280%. And its bond market competition, Nuveen Preferred & Income, returned an amazing 317%.

Which means that this “country club ETF” blended the two strategies and did worse than both! (All while smart bond buyers were enjoying larger yields, lower risk, and superior total returns with Nuveen Preferred & Income.) CEF First, Index Second, ETF Last Could we improve upon Bloomberg Barclays Convertible Bond by hiring some smarter management? We do have one “pure play” option in CEF-land that meets our previous criteria for desirable preferred funds.

The Ellsworth Growth and Income Fund (ECF) pays 5.9% today, more than double the 2.6% yield of the Bloomberg Barclays fund, and trades at a generous discount to its NAV: And, oh, by the way, it’s outperformed its too-popular ETF cousin over the past 10 years as well. Including dividends, Ellsworth Growth and Income has generated 203% profits versus 159% for Bloomberg Barclays.

Also by Tom Jacobs What’s Behind the Numbers? A Guide to Exposing Financial Chicanery and Avoiding Huge Losses in Your Portfolio (with John Del Vecchio) Rule of 72: How to Compound Your Money and Uncover Hidden Stock Profits (with John Del Vecchio) OceanofPDF.com How to Retire on Dividends: Earn a Safe 8%, Leave Your Principal Intact Brett Owens and Tom Jacobs OceanofPDF.com © 2019 Brett Owens and Tom Jacobs All rights reserved.

Printed in the United States of America. Except as permitted under the United States Copyright Act of 1976, no part of this publication may be reproduced or distributed in any form or by any means, or stored in a data base or retrieval system, without prior written permission of the publisher. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered.

It is sold with the understanding that neither the authors nor the publisher is engaged in rendering legal, accounting, investment or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. Published by The Marfa Group, Inc. Book design by Susan Veach Cover design by Ty Nowicki Edited by Betsy Goolsby ISBN: 9781093726015 Printed in the United States of America OceanofPDF.com Contents INTRODUCTION CHAPTER 1 The Problem: Not Enough Low-Risk (Dividend-Powered) Income Dividend “Aristocrats” aren’t The “4% Withdrawal” fallacy CHAPTER 2 The Solution: 8% “No Withdrawal” Retirement Portfolio CHAPTER 3 Our Edge: Second-Level Thinking CHAPTER 4 A Better Way to Buy Bonds: Closed-End Funds What are CEFs and how do they work?

Three more reasons to buy bond CEFs instead of ETFs When it comes to CEFs, you need an active manager How to find the best CEFs Watch out for discount traps Closing the discount window CHAPTER 5 Safe High-Yield CEFs in Any Rate Environment CEF rate fear #1: leverage (borrowing) CEF rate fear #2: competition Floating on air with floating-rate bonds Bonds that rise with rates—floating-rate corporate bond funds CHAPTER 6 Stock “Hybrids” Preferred shares: They pay double mere “common” dividends Convertible bonds Covered calls Cheaper stocks with higher yields via CEFs CHAPTER 7 Constructing a Safe Bond Portfolio (and More Secure High Payers to Add) “Go anywhere” bond funds Municipal bonds CHAPTER 8 Stocks Dividend growth for 12%+ annual returns Following the money for dividend growth The best industries for REITs today When to buy REITs #1: headline worries When to buy REITs #2: unfair company-specific worries The Dividend Yield Trendline: a buy signal Three parting words for REIT (and REIT-like) investing CHAPTER 9 Building Your Portfolio Parting Words Appendix A: Frequently Asked Questions (FAQs) What is dollar-cost averaging (DCA)?

Wait. Isn’t this portfolio designed to never go down? How do I stay ahead of inflation?

This is a short excerpt from the opening of “” by Unknown, quoted for review and introduction purposes. All rights belong to the copyright holders.

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