Positioning for 2026 with Discipline, Dividends, and Patience

Happy New Year, and welcome to 2026.

From all of us at High Dividend Opportunities, we wish you a year filled with good health and happiness.

For centuries, financial markets have been among the greatest wealth generators known to humankind. It’s remarkable to think that today’s global system—where trillions of dollars in securities trade every single day—can trace its roots back to a small gathering of 24 brokers under the Buttonwood Tree in New York in 1792. This event gave rise to what we now know as the New York Stock Exchange.

Since then, public markets have grown into vast engines of global commerce. The companies listed on them participate in trade and commerce measured in the tens of trillions of dollars annually. For individual investors, dividends remain the most direct and time-tested way to tap into that enormous economic activity, to claim a small but steady share of it for our own financial needs.

At High Dividend Opportunities, our philosophy is simple: we focus on getting paid for our time (and our investment) in the markets. Time in the market translates into money in our pockets through consistent cash flow. We maintain a highly diversified portfolio, knowing that no single sector will outperform every year. Some holdings will inevitably lag, while others will quietly deliver outsized returns.

Interestingly, our biggest winners in 2025—agency mortgage REITs, healthcare, and commodities—were among the most widely disliked sectors at the start of the year. That outcome didn’t surprise us. We’ve seen this pattern repeat many times over the years, and we remain comfortable leaning into areas the market is actively ignoring or discounting.

As we look ahead to 2026, we see several compelling opportunities across our core focus areas. Below, we outline where we believe the risk-reward balance is most attractive today, and how we are positioning the portfolio to continue delivering reliable income and long-term total returns.

1. Fixed Income

At High Dividend Opportunities, we believe the biggest opportunities today lie in the fixed income space. We expect multiple rate cuts in 2026, and our individual preferred and baby bond holdings, and diversified funds are well-positioned to deliver excellent total returns. We particularly like Vornado Realty Trust (VNO-O), yielding 7.8%, and Synchrony Financial Preferreds (SCE-M), yielding 7.2%

We also like diversified funds for fixed income exposure, with Virtus InfraCap U.S. Preferred Stock ETF (PFFA) yielding 9.4%, and Nuveen Preferred & Income Opportunities Fund (JPC), yielding 9.3%, offering a necessary balance between publicly traded and institutional securities, spanning a broad range of credit quality and issuer industries.

2. Utilities

Inflation data continues to show that electricity and gas prices in the U.S. are rising significantly more than the CPI. America has an aging power grid with serious capacity issues, and experiences a massive surge in demand from all those data centers being built to achieve AI leadership.

Utility companies hold the balance of power to America’s AI ambitions, and we like to pursue this sector through time-tested monthly-paying CEFs like Cohen & Steers Infrastructure Fund (UTF), yielding 7.6%.

3. Healthcare

No matter which party holds the majority in the Senate or the House, or who the President is, a few things don’t change – America has an aging population with over 4 million expected to turn 65 each year. The older we get, the more we rely on medical care, treatment, and prescription medication. 

Despite all political narratives, America has one of the most complex healthcare systems among developed economies. The complexity is the root cause for comparatively higher prices, which neither tariffs nor regulations can change. We were buyers when the markets were fearful in 2025, and continue to see excellent opportunity in this undervalued sector as we look ahead into 2026. Our top pick for diversified exposure to healthcare is the time-tested abrdn Healthcare Investors (HQH), yielding 11.6% (variable payer).

4. Energy

Geopolitical events have brought oil prices down considerably in 2025. In geopolitical disputes, energy exports are frequently among the first targets of sanctions, underscoring the central role oil and gas continue to play in global trade and commerce. Despite periodic efforts to downplay their relevance, hydrocarbons remain critical to the global economy and will remain so for decades.

Periods of pessimism often create opportunity, and in our view, today’s energy sector reflects that dynamic. We are comfortable adding exposure when sentiment is weak and valuations are disconnected from long-term cash-flow fundamentals.

The U.S. is currently the largest global producer of both crude oil and natural gas, and production levels are expected to remain steady through 2026. This bodes well for our variable-paying mineral royalty companies like Dorchester Minerals (DMLP), yielding +12%, and Kimbell Royalty Partners (KRP), yielding +12%.

Conclusion

As we enter the new year, many popular resolutions have nothing to do with markets—less screen time, more time with loved ones, better sleep, healthier habits, pursuit of a hobby. A dependable stream of income supports those goals by reducing the need to constantly watch markets and react to headlines.

At High Dividend Opportunities, our focus is simple – build portfolios that generate steady cash flow, help you sleep better at night, and allow you to spend more time living your life. Here’s to a happy, healthy, and income-filled 2026!