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5% Dividends... Outside of U.S. StocksBy
Thursday, April 9, 2015
Right now, emerging markets offer some of the planet's highest dividend yields...
At this moment, you can earn a 5% dividend in the WisdomTree Emerging Markets Equity Income Fund (DEM).
In our zero-percent-interest-rate world, a 5% dividend is massive... Money will certainly be attracted to this 5% dividend very soon – driving the price of this fund up (and its yield down).
For now, investors have been completely ignoring emerging markets...
The news has been terrible. China is growing the slowest in a quarter-century. Brazil's major company, state-owned oil-and-gas giant Petrobras, has been mired in scandals. And Russia has been confounding the world with its actions in Ukraine, and it has been suffering with the huge fall in oil prices.
China, Brazil, and Russia are the major emerging-market countries – and it's hard to imagine them being more hated than they already are by investors today. The thing is, if you're a smart investor, this is just when you want to consider buying them.
We have exactly what we want in shares of DEM... They're cheap, the countries it holds are hated, and just in the last month DEM is in an uptrend. Take a look:
 The moment is perfect...
The holdings in DEM are cheap. Its top seven holdings (nearly a quarter of the fund) trade for an average forward P/E of 5. From that kind of low valuation, I legitimately believe our upside potential here is 100%-plus.
Remember, retirees and investors are in a massive hunt for yield... This 5% dividend is irresistible right now. Emerging markets are extremely hated right now. But that will change, as it always does, and investors will bid this high-dividend fund up much higher when that day comes.
I think that has already started... as DEM has started its uptrend in the last month.
Check out shares of DEM today. By buying today, you'll earn a 5% dividend while setting yourself up for 100%-plus upside potential...
For more on DEM, visit its website here.
Good investing,
Steve
Further Reading:
Steve is especially bullish on China. "If you're looking for an area where investor sentiment is terrible and it's dirt cheap, then you need to look at Chinese stocks that trade in Hong Kong," he writes. "Your upside is triple-digit-percentage gains here." Find out his favorite way to invest right here.
Steve isn't so high on energy stocks, however. "Energy stocks are one of the cheaper sectors in the stock market today," he writes. "I am just not a buyer – yet." Find out why here.
Market NotesAN UPDATE ON OIL STOCKS Today's chart shows that oil stocks are in the "sandpaper" phase... and DailyWealth readers shouldn't be surprised.
In January, Brian Hunt and Ben Morris shared the concept of "the guillotine and sandpaper," and how it was the most likely path for beaten-down oil stocks.
In short, the guillotine is what happens when a market suffers a sharp selloff in a short time (like oil stocks)... and sets up an opportunity to trade a recovery. But before the recovery takes place, the asset often spends months or years moving sideways. That's the frustrating sandpaper phase.
You can see this idea in action in the chart below. It tracks the Dow Jones U.S. Oil & Gas Index over the past year. As you can see, the oil and gas sector has been stuck in a sideways pattern since bottoming in mid-December. As expected, oil and gas stocks are still in "sandpaper" mode for now.
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