| Dear Reader, Greg Canavan here. I’ve been in this industry for over 25 years. For the great bulk of that time, however… My ideas on valuation and income regarding stocks were out of favour. With interest rates so low…for so long…capital flowed into the stock market. People became ‘bank account refugees’. And stock prices soared as a result. The higher stock prices went…the less popular ‘income’ in the form of dividends became. I eventually gave up going on CNBC and Bloomberg to talk about quaint ideas like dividends and gold. No one was interested. See…the income valuation process is rational, analytical, and calculating. And those are not three words to describe the investor mindset during the last long bull market. That epic growth run spanned 2009–20. In that time, the S&P 500 only posted a single losing year (2018). It was a ‘dart board’ market. You could throw a dart blindfolded with good odds of hitting a winning growth stock. But in the space of 24 months…this dynamic has completely flipped. INCOME is back in play With inflation, interest rates are market volatility…investors are now focusing back on good, old-fashioned income. Getting compensated for your stock market risk. Sheltering in cash with inflation this high is a losing proposition long term. So…what’s the alternative? You go for stocks that give you the opportunity for price appreciation, like the ones above. But that also REWARDS your risk with regular dividend payments. Ideally ones in the 6–10% range. I classify these as
ROYAL DIVIDEND plays… And, over the last four weeks, I’ve constructed a tight portfolio of them for you. All six constituents currently offer you juicy dividend yields of up to 9%. But with a potential capital growth kicker thrown in…these are six deeply undervalued stocks that could have price bounce-backs in the near future. Click here to learn about The Royal Dividend Portfolio. Regards, Greg Canavan,
Editorial Director, Fat Tail Investment Research | 