This 10.5% Dividend Shines as Americans Get Richer (and Are Less Happy About It)
View original at nasdaq.comThis 10.5% Dividend Shines as Americans Get Richer (and Are Less Happy About It) There's a clear "disconnect" happening in the US economy right now…
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USA has delivered a 12.3% annualized total return over the last decade consistently
60% confidenceLiberty All-Star Equity Fund (USA) is a 10.5%-yielding closed-end fund holding large-cap S&P 500 stocks
60% confidenceInflation-adjusted worker earnings were flat from 1980 to 2015, then began growing in the late 2010s and have continued to rise, even as consumer sentiment has declined
60% confidenceThe S&P 500 averages approximately 10% per year including dividends historically
60% confidenceCEFs offer access to holdings at a discount to NAV, a deal that does not exist with ETFs
60% confidenceUSA generates its 10.5% dividend by linking the payout to NAV and committing to distributing approximately 10% of NAV annually; the quarterly payout floats slightly
60% confidenceAmericans are generally getting richer while sentiment is declining simultaneously, creating a paradoxical disconnect
60% confidenceThe S&P 500 returned 25% in the last year
60% confidenceThe AI buildout is benefiting utilities, energy, infrastructure, construction, transport, retail and other industries, appearing in US companies' bottom lines including riskier firms
60% confidenceAll past major market selloffs including Liberation Day tariffs, the Iran conflict, and the 2022 inflation selloff were buying opportunities, and future pullbacks will be too
60% confidenceDefault rates in the speculative credit market are falling significantly, most rapidly in the loan market that drove the private-credit panic
60% confidenceS&P 500 company sales growth has been accelerating for years, in part due to businesses benefiting from the AI boom
60% confidenceCurrent University of Michigan consumer sentiment is at its lowest level in approximately 50 years
60% confidenceThe 60-Paycheck Dividend Plan consists of 5 hand-picked monthly-paying CEFs yielding 9.3% in aggregate, delivering 60 dividend checks per year
60% confidenceUSA currently trades at an 11.3% discount to NAV, well below its 7.5% one-year average and far below its 0.7% five-year average
60% confidenceAmerican families are less likely to default on debts than in the 2010s and there has been a sharp drop in defaults since early 2025, potentially due to AI-related job opportunities
60% confidenceS&P 500 firms booked year-over-year earnings gains north of 11% in Q1, the highest since 2022, with sales growth accelerating for years partly due to AI
60% confidence
Data points we hold from this source
| S&P 500 Index Fund · historical avg annual return | 10 percent |
| S&P 500 Index Fund · trailing 1yr return | 25 percent |