This Discounted 3-Fund Portfolio Crushes Stocks, Pays 7.7% in Cash

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At my CEF Insider service, I regularly write about the most effective ways to get big dividends—often double-digit yields—from closed-end funds (CEFs) holding some of the world’s best stocks.

I’m talking about companies like Microsoft (MSFT), Apple (AAPL) and Visa (V) here—three common holdings among equity CEFs.

But you can’t just dial up any of these high-yielding funds (CEFs typically yield north of 7%) and call it a day. To get the most out of your CEF investments, you need to invest a bit of time and effort.

Well, how about this: I’ll save you the work and show you a simple three fund portfolio you can create today that gets you a 7.7% income stream and the confidence to hold these funds for decades to come.… Read more

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These days, I’m seeing something I’ve frankly never seen before in the markets: a lot of people questioning so-called investment “truths” they thought were frankly unmovable.

Most people’s natural instinct is to withdraw in times like these, but that would be a mistake in this case, especially for closed-end fund (CEF) investors, as it may result in funds that seem to always trade at a discount suddenly seeing those “eternal” sales come to a swift end.

I know that’s quite a bit to unpack, so let’s start with the skepticism that seems to be rolling through the markets today, starting with the S&P 500’s new—and long-awaited—all-time high.… Read more

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With stocks on the upswing, the appetite for risk is back! That might tempt some folks to abandon sound long-term investing and take a stab at day trading.

Before we go too far into whether this is a good idea, I’d say that to be a successful day trader, you should be aiming to beat the market … and a lot of ink has been spilled about how active managers—and I’d include individual investors here—can’t do that.

Well, that’s nonsense. Plenty of portfolio managers and individual investors do beat the market regularly. Consider closed-end funds (CEFs), for example, which yield 7%+ on average, with plenty sporting histories of beating their benchmarks.… Read more

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If you always wanted a free lunch but thought they don’t exist, well, they kind of do, in the form of the Fidelity group of ZERO index funds, like the Fidelity ZERO Total Market Index Fund (FZROX).

After all, its 0% fees mean it should easily beat a closed-end fund (CEF) with a high expense ratio, right? Well, not so fast.

0% Fees Do Not Equal Outperformance

FZROX—in purple above—may levy no management fee, but it’s underperformed many equity CEFs over a long period. Since inception, it’s trailed the Adams Diversified Equity Fund (ADX), in blue, and the General American Investors Co.Read more

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I hate to see investors get snared by so-called “rules of thumb” like the 4% rule (which we’ve debunked here on Contrarian Outlook many times before).

The trouble is, these rules only “work” until they don’t. And blindly following them through an unexpected market turn could lead you to investment losses, or to run out of money in retirement.

Heck, some don’t even have a germ of truth to them, like the “100 minus your age” rule, which says you should subtract your age from 100, and that’s how much of your portfolio you should dedicate to stocks. So if you’re 30 years old, 70% should go into stocks and 30% into bonds.… Read more

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Does the name William Bengen ring a bell? If not, don’t worry. Many people haven’t heard of him. But he’s likely to have a major influence on your financial situation (if he hasn’t already).

Bengen is the (now retired) financial advisor who came up with the so-called “4% rule,” which is seductive due to its simplicity: it says you can safely withdraw up to 4% of your assets in retirement without having to worry about running out of money.

Obviously, such a vague rule has critics, with most of them suggesting 4% is too lenient. Most of these folks are financial advisors who take fees to manage people’s money, so they definitely have an incentive to keep their clients working and investing!… Read more

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Here’s some great news as we head into the summer market doldrums: we’ve got a terrific setup to buy, with stocks rallying, economic data strong—and the S&P 500 (and many high-yielding closed end funds) still cheap.

These bargains exist because of the media’s constant bleating about a recession. But that, of course, has been completely wrong—and I expect it will continue to be.

The key takeaway is that our buying opportunity in CEFs is as strong as it’s been since this rally started in January—which is why five of the six CEFs in the equity section of our CEF Insider portfolio, which boasts an 8.8% average yield as I write this, are buys.… Read more

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TV personality Suze Orman has bad news for anyone hoping to escape the rat race: they’ll probably have to wait until they’re over 70.

In a recent interview, the host of the Suze Orman Show splashed cold water on the idea that anyone can enjoy their golden years without clocking in at the office. “Stop this ‘Oh, I’m going to retire at 60. I’m going to start claiming Social Security at 62!’” she proclaimed to viewers.

The reason Orman is adamant most people don’t have enough money to retire, and won’t until they’ve hit 70? She says the 4% rule—a cornerstone of retirement planning for decades—is “dangerous,” and no one should “be using the 4% rule on any level.”… Read more

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Let’s face it: yields on Treasuries and “regular” stocks are still pathetic! We need much bigger payouts (I’m talking yields of 7%+ here) to fund our lifestyles in these inflation-weary times.

Trouble is, most of us have been conditioned by the media and Wall Street to believe that all yields that big are dangerous. Nothing could be further from the truth!

Case in point: my favorite high-yield vehicles, closed-end funds (CEFs), which hold all the assets most folks own, like blue chip stocks, corporate bonds and real estate investment trusts (REITs). Except when we buy these assets through CEFs, we get much higher yields than we would if we bought “direct.”… Read more

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With yields north of 7%, closed-end funds (CEFs) should be a staple of every American’s portfolio. Especially when you consider that the vast majority of these funds pay dividends every single month.

But the truth is, CEFs remain a niche product—only folks have taken the time to try them out realize what incredible income generators they are. (This is why I started my CEF Insider service: to bust the myths around CEFs and give members a selection of diversified funds they can use to build a retirement-changing income stream.)

Why are CEFs still off most people’s radar? Mainly due to the financial press and financial advisors, both of which have preached for decades that any yield of 7%, 9%, 10% or higher is unsustainable.… Read more

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