By now you have heard the news. As much as I have truly enjoyed bringing Dividend Pro to you, my publisher has decided to discontinue the service. However, I am pleased to announce that you will now receive my new, high-octane trading service, Triple Digit Trader.
I’ll have more news on Triple Digit Trader further below.
Although the S&P 500 ended the only 0.53% lower over the past week, that flat performance masked yesterday’s sharp decline of 1.25%. The Nasdaq also fell 1.5%, matching the Feb. 4 decline as the worst single-session dip so far in 2013.
The market dropped on news that January housing starts missed expectations. Also, the minutes of the latest Fed meeting signaled that it may scale back its asset purchases. Volume climbed on both major exchanges — a negative sign for the market going forward.
For weeks, I have been concerned that market volatility, as measured by the VIX, continues to hover near record lows. That indicates to me that the market remains remarkably complacent, and oblivious to the fiscal cliff coming in a scant nine days. Perhaps the markets are cynical enough to believe that Congress will pull back from the brink — or kick the can farther down the road — as they did in December. Whatever happens, technically, the market is as overbought as it has been in years, and a sustained correction is a question of “when” and not “if.”
So, how best to deal with your current positions in your Dividend Pro portfolio?
First, I urge you to make note of the relevant stop prices for each of your positions. You can find those on the Dividend Pro website by clicking here.
Second, remember that the biggest risks are in the individual stock picks — Two Harbors Investment Corp. (TWO), Omega Healthcare Investors Inc. (OHI), Fifth Street Finance Corp. (FSC), Annaly Capital Management (NLY), Northern Tier Energy Trust LP (NTI), Apollo Residential Mortgage Inc. (AMTG) and Banco Santander (SAN). So you want pay special attention to your stop prices in those positions.
All other Dividend Pro recommendations are bets on sectors or asset classes, which you can feel comfortable holding independent of “Mr. Market’s Mood swings.” (If you want to continue making money in high-yielding picks like what you’ve seen in Dividend Pro, I recommend you download my Special Report on my firm Global Guru Capital’s “Double Your Dividends” Investment Program by clicking here.)
NOTE: Global Guru Capital is a Securities and Exchange Commission (SEC)-registered investment adviser, and is not affiliated with Eagle Publishing.
Now, let me tell you a bit about my new service, Triple Digit Trader.
First, you should know that Triple Digit Trader is a very different type of service than Dividend Pro.
While Dividend Pro has been all about generating high income in a zero interest rate world, Triple Digit Trader is by far my most high octane, volatile and active trading service. It will require more attention from you — and a much higher tolerance for risk. One of my colleagues said it was like “swapping a 2005 Cadillac (with curb indicators) for a 2013 Dodge Viper V10 and hitting the gas.”
So my recommendation is to “start small” until you get the hang of it.
Second, Triple Digit Trader will recommend stocks, exchange-traded funds (ETFs), commodities and U.S.-listed foreign stocks. No type of investment is off limits if it has triple-digit percentage profit potential. Plus, options will be a key tool in our arsenal. Not only will options let you turbocharge your profits on the upside, they will let you grab big gains from downside moves as well.
Third, Triple Digit Trader is a premium (read “expensive”) service. While Dividend Pro costs $1,250 a year, Triple Digit Trader has an annual price tag of $2,995. Now, your current subscription will continue for the same term you have left on your Dividend Pro subscription, so there is no need to do anything. You will automatically receive Triple Digit Trader starting next week. And as a “Thank You” for being a Dividend Pro subscriber, we will keep the same renewal price for you as long as you remain a subscriber. You will not pay the higher price others are paying. That’s almost a 60% discount.
Finally, to ensure you continue to receive dividend-paying investments, we are happy to give you three free months of my colleague Mark Skousen’s service — Skousen High-Income Alert. Dr. Skousen chooses high dividend-paying stocks, as well as options, for every pick in this weekly service. Your subscription to that service will start next week.
Thank you for being a subscriber and I look forward to helping you build your portfolio each week in Triple Digit Trader.
Global X SuperDividend ETF (SDIV) pulled back 1.38% last week. SDIV attracted $41.5 million dollar inflow — that’s a 14.0% increase week over week in outstanding units (from 12,900,000 to 14,700,000). Yielding 7.22%, SDIV remains a BUY.
Two Harbors Investment Corp. (TWO) fell 0.79% this past week. For 2012, Two Harbors delivered a return on book value of 47% as measured by dividends declared and book value appreciation. TWO remains a BUY.
PIMCO Municipal Income Fund II (PML) rose 0.31%. Still below its 50-day moving average (MA), PML remains a HOLD.
Omega Healthcare Investors Inc. (OHI) fell 0.59%. Omega returned over 36% year-over-year and over 25% in the last 90 days. With a 6.5% dividend yield, I see no reason that Omega cannot return at least 30% this year (23.5% growth and 6.5% dividend). OHI is a BUY.
PowerShares Preferred (PGX) fell 0.54%. When bonds drop, preferred shares sometimes rise. Like bonds, preferred shares pay fixed yields. But bonds are considered senior to preferred shares. So in the event of a default, bond holders are paid first with whatever remains of the corporate assets. Preferred shares are next in line. Because they come with more risk, preferred shares yield more than comparable bonds. This monthly income payer, with a 6.42% yield, remains a BUY.
Fifth Street Finance Corp. (FSC) dropped 2.94%. Its monthly dividend of $0.0958 is payable on Feb. 28. FSC has now moved to a HOLD.
Annaly Capital Management (NLY) dropped 0.79%. Annaly Capital Management has a history of paying huge dividends to shareholders. Though that payout has taken a dip lately, things appear to be looking up. NLY is a BUY.
Peritus High Yield ETF (HYLD) rose 0.14%. Instead of following passive benchmarks designed to mirror the U.S. High Yield Corporate market, HYLD employs an actively managed approach that seeks the right mix of individual corporate bond issues. HYLD remains a BUY.
Northern Tier Energy Trust LP (NTI) fell 1.48%. NTI has declared its first distribution for 2013. The company is paying out $1.27 per unit, which will be paid on Feb. 28 to unit holders of record as of Feb. 21. That equals a yield of 17% at the current share price of $29.50. NTI remains a BUY.
Apollo Residential Mortgage Inc. (AMTG) fell 1.19% this past week. The company’s Q4 and full-year 2012 financial results will be released after the market closes on Wednesday, March 6. AMTG is a BUY.
SPDR S&P Emerging Markets Dividend ETF (EDIV) dropped 2.05%. Yielding 5.40%, this bullish bet on emerging markets is now a HOLD.
UBS E-TRACS 2x Wells Fargo Bus Dv Cm ETN (BDCL) ended the week flat. With a double-digit percentage yield of 12.87%, BDCL remains a BUY.
Market Vectors International High Yield Bond ETF (IHY) rose 0.22%. Historically, the correlation between high-yield bonds and Treasuries has been slightly negative, as high-yield debt has generally had a far higher correlation with equities.” Falling below its 50-day moving average, this high-yield play is now a HOLD.
Banco Santander (SAN) tumbled 4.58%. Santander is a bet on Europe, Latin America, and an eventual banking recovery with less of the scandal risk that has plagued the sector. Plus, collect an 8.2% yield while you wait for that recovery. This high-yield bet on European banks is now a HOLD.
iShares FTSE NAREIT Mortgage REIT (REM) dropped 1.12%. REM has a 30-day SEC yield of nearly 12%. Component stocks of REM have seen substantial buying recently. REM remains a BUY.