Earn Thousands With 'Sweet Spot' Income Stocks
As many of my long-time readers know, I generally like to have my portfolio holdings equally split among three types of dividend stocks: High-Yield Opportunities, Fast Dividend Growers and Steady Income Generators. (I talked in more detail about each of these in this issue of StreetAuthority Daily.)
The critical discovery I've made over the past five years is that by using the right combination of dividend stocks, you can you create a retirement portfolio that maximizes income, maximizes growth and minimizes risk.
This is exactly what my Daily Paycheck Retirement Strategy is all about. It's how I've been able to collect more than $1,500 per month in dividends over the past year, and how my real-money portfolio has grown from $200,000 to over $315,000 in just a little more than five years.
As I said, the strategy uses three types of dividend stocks. But to maximize income, my Daily Paycheck strategy dedicates nearly a third of its portfolio to high-yield dividend stocks.
I doubt I need to tell you the primary benefit of this elite category. But high-yielding securities are defined by their generous income payouts, making them particularly attractive for anyone looking for a large income stream in retirement.
But you need to be selective. When it comes to high yielders, the biggest isn't necessarily the best. Instead, you want to find something in what I call the "high-yield sweet spot," a segment of dividend-paying stocks that consistently performs well over the long haul.
Professor Kenneth French, world renowned for his financial research, painstakingly ranked the performance of all U.S. stocks from 1927 through 2013 according to yield.
[More from StreetAuthority.com: The Only Investing Strategy You'll Ever Need For Retirement]
He discovered that there's a special group of high-yielders that outperformed all others, returning an average of 14% per year.
This sweet spot isn't made up of the absolute highest yielders -- for instance, those with 18% yields and up. According to Dr. French's findings, some of the best high yielders are those that pay above-average yields -- but not so high that they can't afford to keep paying them.
That's the sweet spot... and that's the group I focus on.
So in the high-yield section of my Daily Paycheck portfolio, the yields start at 8.3% and go up from there. They average a whopping 10.3% yield overall.
Let me show you an example from my portfolio that illustrates what I look for in a high-yielder.
[More from StreetAuthority.com: This Income Strategy Earns $1,555 A Month]
The Gabelli Multimedia Trust (NYSE: GGT) is a closed-end fund that has traded on the NYSE under the ticker symbol GGT since 1994.
The fund holds an unusual mix of very dependable cash cows and aggressive growth stocks -- from rock-solid global telecommunications firms to fast-growing internet companies.
I first bought shares in August 2010, and I've already collected over $3,400 in dividend paychecks. My total return is over 45%.
The fund has an attractive yield of roughly 12.3%. So if you invested $10,000 in it tomorrow, you could immediately start collecting about $1,230 annually.
But I have others.
[More from StreetAuthority.com: A Great Stock To Own In A Bad Market ]
In fairness to my paid subscribers, I can't show you the names of all my high-yielders. But I can tell you one of my current holdings yields 8.3% and has returned over 40% since 2010. Another yields 8.9% and has returned more than 80% over roughly the same time period.
They're right in the high-yield sweet spot, and pay an average yield that's more than four times greater than the S&P 500's.
They have paid me thousands of dollars over the last few years -- and they could do the same for you.
P.S. If you're retired -- or are set to retire in the coming years -- you should know starting this month, your benefits could be cut by up to 50%, or more. It's part of a new law that Congress passed in late 2014... but millions of Americans still don't know about it yet. Click here so I can give you all the details on this dangerous new law, and show you how The Daily Paycheck could save your retirement.
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