Dividend Investor Insights: Alternatives for Income Investors in the Year Ahead

You are receiving this email because you signed up to receive our free e-letters, or you purchased a product or service from its publisher, Eagle Financial Publications. Alternatives for Income Investors in the Year Ahead 12/01/2023 [Sponsored Content [Serious profits in months with teeny tiny gains?](]( Small gains could turn into big profits. Sounds strange…But it's the foundation of an A.I. powered investing method we call "hyper compounding" that helps everyday folks potentially turn $10,000 into nearly $35,000 in just one year. For comparison, that $10,000 in a savings account would get you $10,535. How can you get started "hyper compounding"? [Check out the details here.]( [Click Here...]([1pxtrans]( Alternatives for income investors in the year ahead include [dividend-paying equities]( money market accounts and more. The best alternatives for income investors in the year ahead are affected by key factors such as U.S. government interest rate policies, economic growth, corporate earnings, whether the Fed will begin cutting rates in 2024 and political risk. Even though it appears the Fed is finished or nearly done with the short-term rates it controls, much uncertainty remains for income investors. Absent a significant decline in the U.S. economy, the Fed may not cut interest rates for months while inflation remains elevated. However, investor optimism for the Fed to cut rates could be fulfilled in 2024 if the inflation rates keeps trending down as it did by dipping to 3.24% in October, following 3.70% in September and 7.75% in 2022. Alternatives for Income Investors: Recession-Resistant Dividend Payers Dividend investors must be cautious about the effects of higher interest rates and slower economic growth on corporate profits and cash flow, cautioned Bob Carlson, a pension fund chairman who heads the [Retirement Watch]( investment newsletter. It is "critical" that investors select dividend-paying companies that can can maintain or increase their payouts during an economic slowdown, he added. "The best trade off between risk and reward now is in money market funds and other short-term, principal-protected investments," Carlson continued. "Longer-term bonds and other risky investments face several headwinds in the first half of 2024." Bob Carlson, head of the [Retirement Watch](, gives an interview to [Paul Dykewicz](. The Fed doesn't want to return to 0% interest rates if it can avoid that, Carlson told me. Yet, markets are pricing in significant reductions in short-term rates, he counseled. "More importantly, longer-term rates are lower than short-term rates," Carlson said. "Most of the time, short-term rates are lower than longer-term rates. The current anomaly has to be corrected by either reductions in short-term rates or increases in longer-term rates. I expect longer-term rates to increase from current levels, which should hurt prices of bonds and other income-oriented investments in 2024." [[How To Become a One-Percenter in The Next Six Months]( According to Fortune, you need to be pulling in at least $650,000 every year to be considered a one-percenter in America. Now, to make that kind of money in one year, you’d usually need to own a booming business, climb the top of the corporate ladder or hit a jackpot in Vegas… But one breakthrough trading system can help you make “one-percenter” money, in the next six months. [Learn about it here.]( [Click Here...]( Alternatives for Income Investors: Money Market Accounts [Top money market rates]( are now above 5%. Income investors currently can avoid market risk by using money market accounts and certificates of deposit, Carlson recently wrote to his [Retirement Watch]( subscribers. Another seasoned market and interest rate watcher is Jim Woods, who leads the [Successful Investing]( newsletter and a variety of trading services. Woods has identified “three pillars” of the current market rally, featuring a soft economic landing, reduced falling inflation and the Fed stopping its rate hikes. In the November issue of [Successful Investing](, Woods advised another key factor going forward will be stable earnings. For bullish sentiment to prevail, all the positive expectations need to happen, he added. Woods also used the term "immaculate disinflation" to convey the idea that prices will fall quickly and growth does not slow. This is different from the more negative consensus view that inflation gradually declines in 2024, he added. "Instead, immaculate disinflation means inflation falls quickly by itself and that economic growth stays resilient," Woods advised his [Successful Investing]( subscribers. Seasoned stock picker Jim Woods heads [Successful Investing.]( "This makes sense because it’s possible all the inflation of the past two years was supply chain driven and now that supply chains are mostly working again, all that inflation will reverse itself and we’ll go back to a 2019 type of inflation," Woods opined. Alternatives for Income Investors: High-Yield Investments Another way to reap the rewards of high income is to let someone who has a knack for picking winners take the lead. That is the role that Bryan Perry, head of the [Cash Machine]( investment newsletter, tries to do. His [Cash Machine]( portfolio recommendations have an average dividend yield of 11.14%. Positive news for the market lately has included robust earnings from key big-cap tech companies, as well as Black Friday and Cyber Monday promotions leading to record sales, Perry wrote to his subscribers. What became clear amid the rally during November is that market sentiment pivoted hard with the softened inflation and the view the Fed’s rate-cutting was accomplished, he added. Recent data implied Fed rate cuts would come as early as spring 2024 when measured by the Treasury futures market. It is not just Perry's opinion, since the CME FedWatch Tool on Nov. 30 showed a 46% probability of a quarter-point rate cut in March 2024 versus just an 11% probability one month earlier. "This shift in investor mentality has provided a sustainable catalyst as underinvested professional fund managers raised equity weightings, insiders bought shares in the open market and corporations accelerated their stock repurchase programs," Perry commented. "The combined inertia has taken the major averages back up to the previous 2023 highs last seen in late July." Bryan Perry's [Cash Machine]( averages 11.14% dividend yield. [[Warning: America on the Brink of Financial Crisis!](]( Traders who make money understand the need to optimize their trading strategy to capitalize on every opportunity that comes their way. [Count On This Dual-Patented A.I. Trading Tool (Learn for FREE Now) >>]( [Click Here...]( Alternatives for Income Investors: Political Risk Rises Roughly 140 hostages taken from Israel by Hamas militants on Oct. 7 remain captive in Gaza, after a weeklong truce that led to the release of many women and children. The majority of the hostages held in Gaza by Hama and other Palestinian groups are men, including some Israeli soldiers. Both sides accused each other of of violating the ceasefire, causing the exchange of hostages taken from Israeli for Hamas detainees to end. Winter conditions are descending in war-torn Ukraine. Continuation of the protracted invasion by Russian forces seemed destined well into 2024 and possibly beyond. Russia's attack of Ukraine began on February 24, 2022, and has caused massive deaths and injuries on both side. Russia's President Putin seems willing to inflict a devastating humanitarian toll of Ukraine's civilian population with direct attacks on communities with no military activity taking place. Such brutality draws international condemnation from many countries but Russia's tactics continue nonetheless. U.S. government resolve to oppose Russia’s aggression resurfaced this week from an American diplomat who said that restrictions aimed at curbing Moscow's energy revenue will continue in the years ahead. The goal will be to halve Russia’s energy revenue by 2030 to limit Russia's financial resources to rearm for future military action. Sincerely, Paul Dykewicz, Editor [DividendInvestor.com]( About Paul Dykewicz: Paul Dykewicz is an accomplished, award-winning journalist who has written for Dow Jones, the Wall Street Journal, Investor’s Business Daily, USA Today, Seeking Alpha, GuruFocus and other publications and websites. Paul is the editor of [StockInvestor.com]( and [DividendInvestor.com]( a writer for both websites and a columnist. He further is the editorial director of Eagle Financial Publications in Washington, D.C., where he edits monthly investment newsletters, time-sensitive trading alerts, free e-letters and other investment reports. Paul also is the author of an inspirational book, "[Holy Smokes! Golden Guidance from Notre Dame's Championship Chaplain](", with a foreword by former national championship-winning football coach Lou Holtz. 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