I’m going to add to the SNOWBALL a TR share, that is a share that doesn’t pay a dividend. I’m going to drip feed one hundred pounds of dividends into the share but only investing £200 because of costs. Hopefully the share price will fall as the SNOWBALL builds a position and one day the share will be sold and re-invested into a dividend paying share. Because the income is coming from earned dividends, the risk is lowered and it will make very little difference to the total income for the SNOWBALL.
High risk, so the plan is to drip feed a small amount of income into the share bi- monthly.
Wall Street Whales Can’t Buy This 12.8% Dividend—But We Contrarians Can!
Brett Owens, Chief Investment Strategist Updated: September 23, 2026
“If winning isn’t supposed to matter, then why are they introducing a playoff system?”
I shook my head in disbelief as I whispered this unfolding “riddle” to my coaching buddy in the chair next to me. We were at the YMCA fall basketball meeting, sweating it out in the preschool room. (Where was the air conditioning on this sultry September evening?)
The YMCA regional manager, notorious for talking for an hour about the exact same thing to kick off every season, had something new. And to be honest, the “ruling” made no sense to me.
Playoffs? We’re talkin’ about…playoffs?
At the Y?
What a silly rule! We, as coaches, are supposed to play everyone equally. Our job is to develop players. Winning a game on a random Saturday afternoon in September shouldn’t come at the expense of poor Little Joey not being able to get off the end of the bench because his too-serious coach is in “win now” mode.
Alas, the room voted. The masses overruled my objections and implemented our playoff system.
Yet another “rule” that I will refuse to recognize. I don’t care if we make the playoffs. Just as I don’t care what the “middle rating agency” says about a particular bond.
Yes, Bondland can be like the YMCA! It runs by rules that may not make sense. Vanilla investors, like delusional weekend coaches, can be tempted into following them, however. It’s why the masses think it’s impossible to retire on dividends! They stop their shopping at investment-grade bond ETFs, like the iShares Core U.S. Aggregate Bond ETF (AGG) and the Vanguard Total Bond Market ETF (BND). They collect 4% or so and call it “good enough.”
Four percent is $40,000 on a million bucks. Not good enough!
These poverty-payout chasers play by the house rules in Bondland. But they don’t have to. It’s more profitable to swim away from the whales.
Which are massive animals. Global pension assets topped $68 trillion at the end of 2025. US insurance companies, meanwhile, held $5.7 trillion worth of bonds. That’s some whales!
For funds tracking the Bloomberg Aggregate, the rulebook is explicit: The index drops a bond when two of its three ratings fall below investment grade. The funds that track the Aggregate index sell the disgraced holding at their next month-end rebalance.
But the selling is often a knee-jerk reaction. Take the case of Celanese (CE), a chemical company that has been boosting debt levels to grow. Rating agencies don’t like borrowing, growth plans or not!
Celanese’s bonds started at 6.55%. S&P downgraded them first, then Moody’s piled on. The Moody’s downgrade is what knocked them below investment grade and out of the Aggregate index.
Now, the notes carry a “step-up clause,” which means every S&P or Moody’s cut raises the coupon by a quarter point. Four cuts later, the bonds that started at 6.55% will pay a full point more, 7.55%, starting this November. And here’s the part the whales missed: The price didn’t budge on the boot. It went up. The only real dip came eight weeks later, in the April 2025 selloff, when everything fell:
So the bond’s coupon moved up, its price held, and the April dip was the market’s, not the downgrade’s. How did Celanese respond? “I’ll show you” by reducing its net debt nearly 20% from $13.2 billion to $10.6 billion. The company made its payments just fine, rewarding those who bought the dip.
Bonds downgraded from investment grade to junk are called fallen angels. It’s become a popular bond buying strategy to buy them all. But be careful—they don’t all recover!
And honestly, do we want to—can we?—underwrite every chemical company and automaker? Analyze individual balance sheets and cash flows? Nah…we’ll hire the bond pros to make those calls!
This is the lucrative yield game that the pros at PIMCO play. The famous bond shop is the former home of the Bond King, Bill Gross, and current home of his successor, Dan “The Beast” Ivascyn. Ivascyn runs a series of closed-end funds through which we can buy downgraded and unloved bonds, handpicked by the Beast and his team.
My top bond CEF to buy right now is PIMCO Dynamic Income Opportunities Fund (PDO). Its mandate puts no cap on below-investment-grade bonds—only on the very lowest grades. No self-defeating rules here!
PDO uses 39% leverage as I write. Leverage can be risky in the wrong hands, but PDO’s recent payout coverage is strong: It earned $1.41 in income per $1 paid out over the last three months, and $1.11 over the last six, by PIMCO’s own estimates. That’s a lot of headroom.
As I write, the fund trades at a 4% discount to net asset value (the value of its bonds, net of borrowings), which means we can buy it for 96 cents on the dollar. This is compelling for a blue-blood bond fund like PDO, which traded at a 3.1% average premium over the past year, selling for $1.03 on the dollar. Today, 96 cents. Nice.
Why is a deal like this available?
First, the pension and insurance whales have many trillions to invest and rules that keep them out of the things PDO can own. We, as individuals, don’t have the trillion-dollar problem or the rulebook—and neither does Dan Ivascyn at PIMCO. That’s our collective edge. And remember, we can hire Ivascyn today for 96 cents on the dollar.
Second, rate worries. Over the last five years, PDO’s returns have averaged a lackluster 3.1% per year on the fund’s net asset value. The reason for the soft price is that interest rates rose from nearly zero to 5% in a hurry. Today, the damage is largely done and already priced in.
Ivascyn is a perennial winner at a game the whales don’t play. He’s the guru we want coaching up our fixed-income portfolio.
Discover the safe, simple way to lock insteady monthly dividends up to 16.2% right now!
Look, I know I don’t have to tell you that all of our monthly bills are going up—and fast.
Inflation is still too high. And retirees (or those who are hoping to retire) feel it the most.
It’s no wonder more and more people think they’ll never retire.
Especially when the media goes on and on about the massive sums needed to clock out—sums that feel outdated the moment they’re released!
Not so long ago, we used to think a million bucks was enough to retire. Now, it seems paltry.
Well, I’ve got good news for you. You very well may be able to clock out on a realistic amount of money (much less than a million!)
I’m talking about just $600,000 here. And in some parts of the country you could do it on even less.
Got more? Great. I’ll show you how you can retire well on your current stake.
I know that’s a bit tough to believe, but stick with me for a few moments and I’ll walk you through it.
The key is my “9% Monthly Payer Portfolio,” which lets you live on dividends alone—without selling a single stock to generate extra cash.
And you’ll get paid the same big dividends every month of the year—so that your income and expenses will once again be lined up!
This approach is a must if you want to quickly and safely grow your wealth and safeguard your nest egg through the next market correction, too!
This isn’t just a dividend play, either: this proven strategy also has the potential to deliver 10%+ price upside in addition to your monthly dividends.
That’s the Power of Monthly Dividends
We’ll talk more about that price upside shortly. First, let’s set up a smooth income stream that rolls in every month, not every quarter like the dividends you get from most blue-chip stocks.
You no doubt already know that it’s a pain to deal with payouts that roll in quarterly when our bills roll in monthly.
But convenience is far from the only benefit you get with monthly dividends. They also give you your cash faster—so you can reinvest it faster if you don’t need income from your portfolio right away.
More on that a little further on. First I want to show you…
HowNotto Build a Solid Monthly Income Stream
When it comes to dividend investing, many “first-level” investors take themselves out of the game right off the hop.
That’s because they head straight to the list of Dividend Aristocrats—the S&P 500 companies that have hiked their payouts for 25 years or more.
That kind of dividend growth is impressive. But here’s the problem: These folks are forgetting that companies don’t need a high dividend yield to join this club—and without a high, safe payout, you can forget about generating a livable income stream on any reasonably sized nest egg.
Worse, you could be forced to sell stocks in retirement—maybe even into the kind of plunges we saw in March 2020 or throughout 2022—just to make ends meet.
That’s a nightmare for any retiree, and leaning too hard on the so-called Aristocrats can easily make it a reality: the ProShares S&P 500 Dividend Aristocrats ETF (NOBL), which holds all 69 Aristocrats, still yields just 2% as I write this.
Solid Monthly Payers Are Rare Birds …
You can certainly build your own monthly income portfolio, and the advantage of doing so is obvious: you can target companies that pay more than your average Aristocrat’s paltry payout.
Trouble is, only a handful of regular stocks pay in any frequency other than quarterly, so we’ll have to patch together different payout schedules to make it happen.
To do that, let’s cherry-pick a combo of well-known payers and payout schedules that line up. Here’s an “instant” 6-stock monthly dividend portfolio that fits the bill:
Procter & Gamble (PG) and AbbVie (ABBV) with dividend payments in February, May, August and November.
Target (TGT) and Chevron (CVX), with payments in March, June, September and December.
Sysco (SYY) and Wal-Mart Stores (WMT), with payments in January, April, July and October.
Here’s what $600,000 evenly split across these six stocks would net you in dividend payouts over the first six months of the calendar year, based on current yields and rates:
You can see the consistency starting to show up here, with payouts coming your way every single month, but they still vary widely—sometimes by $1,003 a month!
It’s pretty tough to manage your payments, savings and other needs on a lumpy cash flow like that.
And the bigger problem is that we’re pulling in $17,390 in yearly income on a $600,000 nest egg.
That’s not nearly enough for us to reach our ultimate goal of retiring on dividends alone, without having to sell a single stock in retirement.
We need to do better.
Which brings me to…
Your Best Move Now: 9%+ Dividends AND Monthly Payouts
This is where my “9% Monthly Payer Portfolio” comes in. With just $600,000 invested, it’ll hand you a rock-solid $54,000-a-year income stream. That could be enough to see many folks into retirement.
The best part is you won’t have to go back to “lumpy” quarterly payouts to do it!
Of all the income machines in this unique portfolio, nearly half pay dividends monthly, so you can look forward to the steady drip of income, month in and month out from these plays.
The TR chart for MRCH. After the covid crash there was plenty of time to buy into the price drop, always easier with hindsight.
If you bought at 400p, the current dividend is 30p, so a buying yield of 7.5% plus the yield from the dividends re-invested. April of last year another opportunity to buy. Maybe better to wait for a market crash before opening a new position but one for your watch list.
Merchants buys eight new stocks in increasingly ‘polarised’ UK market
The £992m UK Equity Income trust sold the likes of Unilever to take advantage of cheap stocks that were caught up in the software selloff.
By Lotte Edwards
Merchants (MRCH) made a flurry of purchases over the first half of the year, taking advantage of what lead manager Simon Gergel described as an increasingly ‘polarised’ UK market.
The £992m UK Equity Income trust run by Allianz established positions in eight new companies during the six months to the end of July.
In June alone, it deployed nearly 5% of the portfolio across three software and information services names: Auto Trader, Sage, and Wolters Kluwer. All three were caught up in an indiscriminate sell-off beginning in February over fears of disruption from artificial intelligence (AI).
‘For the first time in many years, these companies were trading on modest valuations and with dividend yields close to the market average or higher,’ Gergel said. ‘Whilst we acknowledge that AI does create some new potential risks, it also creates opportunities to sell incremental services.
‘By diversifying exposure across three stocks, we were taking advantage of what we believed was a mis-pricing of this area, without taking undue risk on any one company,’ he said.
Elsewhere, new positions were taken within the healthcare, travel & leisure, media, construction & materials, and life insurance sectors.
Helping to fund the buying spree, five positions were exited entirely, including consumer goods giant Unilever following the announced sale of its food business to US seasonings manufacturer McCormick.
‘Whilst we understand the logic of the deal, it will take a long time to complete and we decided to sell the shares to reinvest in a bigger position in Reckitt, which we believed offered better value,’ Gergel explained.
Over the reporting period, Merchants delivered a net asset value (NAV) total return of 9.3% and share price total return of 8.4%, outperforming the FTSE All-Share benchmark’s 7.9% gain. Over a five-year horizon, it remains ahead of its peers, with shares up 65.2% versus 59.7% for the average UK Equity Income trust.
Performance was aided by takeover bids at substantial premiums for two of the portfolio’s larger holdings, Tate & Lyle and DCC, providing external reassurance of the value hiding in overlooked UK stocks . They gained 50% and 40% respectively.
Despite a considerable rally for the FTSE All-Share over the past 12 months, the managers stressed that UK medium-sized companies − to which MRCH is tilted − look ‘particularly cheap’.
The board declared a first-half dividend of 15p per share, up 2.7% on last year and marking 44 consecutive years of increases. The period represents the final half-year report for chair Colin Clark, who will step down at the end of September.
I’ve sold112 shares in HFEL for a ‘profit’ of £300 as the share is at the higher risk in the SNOWBALL, Mr. Market may take back the profit and some.
Current profit for the share £526.00, whilst remembering that a profit is not a profit until the underlying security has been sold and the cash sits in your account.
A stock can climb for months without paying you a dime.That’s the problem I want to help you solve.I’ve been researching funds designed to generate income from stocks… even when the companies themselves pay little or nothing in dividends (like Tesla or Apple).I call them “Paycheck ETFs.”Whether your retirement income goal is $3,000 or $5,000 a month, see how you could help fund that goal on less than you think.The fund managers use options to collect payments that can help fund distributions to shareholders.You buy the ETF through your brokerage account. The managers handle the trades.There’s a trade-off: you can miss out on some potential gains…But if your goal is money to spend in retirement, this is an approach worth understanding.Because “How high can my stocks go?” is only half the question.The other half?“How much income could my savings help me collect?”
Back Up the Truck On This 7.8% Dividend as Rates Rise
by Michael Foster, Investment Strategist
This latest shift toward interest rate hikes has sent income investors into a tizzy. That’s great for us, because they’re tossing out one terrific fund kicking out a 7.8% dividend that’s grown.
This smartly run corporate-bond fund is now on the table for 11.9% below the value of its portfolio. That not only positions this fund (a closed-end fund, or CEF, to be exact) for future upside-it helps cushion its portfolio, letting us collect its 7.8% payout in peace as the Fed raises rates.
I know that may sound strange: Usually higher rates are bad for bonds, especially for funds chock full of bonds that pay out “old” rates that may be lower than the “new” interest rates likely to come. But here we are.
Let me explain my thinking here, then we’ll dive into the dynamics fueling this growing 7.8% payout.
Strong Economy = Greater Safety for This Discounted Dividend
With the latest hike, the Fed raised the upper end of its rate target by a quarter of a point, bringing it to 4%. That, of course, is meant to slow down borrowing in an attempt to keep inflation in check.
But let’s be clear about something here: Inflation, while stubbornly above 2%, hasn’t tracked much higher than 3% since its peak at the start of the Iran conflict. The inflation gains we’ve seen lately have a lot more to do with that situation, and how it’s driven up oil prices, than with runaway inflation due to systemic problems in the economy as a whole.
That’s key, because it suggests we’re not in a 2022-style situation, where inflation roared to 9%. Instead, once the conflict ends (and it will at some point), inflation will likely shrink back to somewhere around the Fed’s 2% target.
So what we’re really seeing is the effect of higher oil prices on the one hand but also a strong economy on the other, especially due to high AI investments. So the Fed is doing what it should be: Trying to maintain strong economic growth without allowing it to become a bubble.
That economic strength is backed up by other numbers, like low corporate-default rates and strong household income gains and spending, with median US household income up 2.6% in 2025, to a record high of $87,460.
These strengths have, of course, propelled stocks in recent years. But they’ve also helped bonds. Indeed, they’re part of the reason why the corporate-bond default rate has stayed low, even after interest rates have gone up.
This is a godsend for debt investors: They get higher rates on the bonds they invest in, and they get fewer defaults, despite those higher rates. Which brings me back to that overly discounted 7.8%-paying fund.
Higher Rates Could Mean More Hikes for This 7.8%-PayerThe fund in question is the PIMCO Dynamic Income Strategy (PDX), a holding of my CEF Insider service and one of the many PIMCO funds managing corporate bonds.
Before we go further, I want to stress how important the PIMCO brand is: The company manages over $2.3 trillion in assets and is one of the world’s most prominent bond investors. That means it gets early access to the best new issues.
This is why PDX (and indeed many PIMCO bond funds) has crushed the go-to corporate-bond index fund, the State Street SPDR Bloomberg High Yield Bond ETF (JNK), over the long haul.
PDX’s Well-Connected Managers Give It an Edge In addition, as you can see above, PDX has returned around 116% since its launch in 2019. That’s a big move for a bond fund, and another sign of management’s skill.
In addition, the fund has not only maintained that 7.8% dividend-it’s grown it, while offering multiple special dividends along the way.
This Dividend Is Much More Than “Just” a 7.8% Yield Source:Income Calendar First, even though it’s a little tough to see in the chart above, PDX’s regular payouts have risen 33% since its IPO in 2019. That’s impressive enough on its own for a high yielder like this.
But also look at those spikes in late 2024 and late 2025: Those are special dividends the fund has paid out, thanks to its excess income due to, you guessed it, higher-yielding corporate bonds issued after the rate hikes of the prior two years. More special payouts are likely, as the rate hikes we’re now experiencing give management more opportunities to buy higher-yielding bonds.
Meantime, that 11.9% discount to NAV helps cushion the portfolio by virtue of the fact that it’s so unusual for a PIMCO fund. Due to the company’s sterling reputation, most of its funds trade at a premium. What’s more, the fund’s discount has gotten wider lately, despite its strong total return these past seven years:
Bond Bears Trash a Perfectly Good Fund I suspect this latest widening is due to the conservative retail investors who dominate the CEF market. They simply hear the words “bond selloff” and cut back on all bond funds, including durable payers like PDX.
Something else they’re forgetting: PDX’s discount can’t last forever, since the fund comes to term in 2031, at which point it will be liquidated at par. So that discount works in our favor the longer we hold.
Their loss is our gain. Especially when you consider that the fund can cover its dividend simply by purchasing the average high-yield bond, which yields around 7.4% today. That’s higher than PDX’s yield when calculated on NAV, not the 11.9%-discounted market price: 6.9%.
That 6.9%, in other words, is what management needs to earn in the market to cover PDX’s 7.8% payout to us.
Next up, leverage: As I write this, PDX borrows against 22% of its portfolio. That’s modest for a CEF: high enough to meaningfully boost returns, but not so high as to cause excessive damage in a downturn.
That sets the stage for more hikes to PDX’s regular payout and puts more special dividends on the table. And at an 11.9% discount, we can see that investors have not priced any of this in. That’s our cue!
