Not many people know this, but you can actually “magnify” the return of a regular stock—just by holding it through a closed-end fund (CEF)!
That’s in addition to getting a much bigger dividend than the typical S&P 500 stock dribbles out: 7%+ payouts are, of course, common in the CEF space.
So how does our CEF “gain magnifier” work?
It comes down to what at first blush seems to be a rather obscure fact: CEFs (which trade on the market, just like stocks or ETFs), generally have a fixed number of shares for the entirety of their lives. That means their market price can be different from their per-share net asset values (NAV, or the value of the stocks they hold in their portfolios).… Read more