The Economist Just Changed the Game for These 7.8% Dividends

Our Archive

Search completed

The Economist Just Changed the Game for These 7.8% Dividends

I’ve been covering CEFs for about a decade, and I’ve never seen them get as much attention as they are right now.

And it’s only the beginning.

We talked about the much-brighter spotlight on our favorite income plays in the November issue of my CEF Insider service. Back then, we noted that big institutional investors (including the particularly aggressive folks at Saba Capital Management) were starting to pressure CEFs to change or shut down.

Shuttering a fund may sound dramatic, but the key thing to bear in mind here is that doing so can result in an immediate gain for investors.… Read more

Read More

This Huge “Dividend Shift” Dropped May 3 (You Can Still Get In)

A couple weeks ago, on May 3, BlackRock, the world’s largest investment firm, did something that will send a shockwave through our favorite high-yield investments: closed-end funds (CEFs).

The result is likely to be higher prices for CEF investors in the future—and even steadier dividends, too. Most folks missed this change, but it’s only a matter of time until it makes itself known. We’re already seeing it kick in with some of these high-paying funds.

Before we go further, let’s be clear on what we’re talking about: The $400-billion universe of CEFs currently yields an eye-popping 8.2% on average.

How is that possible?… Read more

Read More

This Ticker Turns Nvidia Into a 9.2% Dividend Payer

Stock market rallies climb walls of worry. Well, we have no shortage of such worries today!

A few days ago, Bloomberg lamented there was “no relief in sight for bonds”. This was ironic because relief—the catalyst for the next big bond rally—is hidden in plain sight. Despite the despair, 10-year Treasury rates are still a ways off from their recent 5% highs last October:

Reality Check: Rates Still Lower Than Last Year

If they put in a “lower high”—as I’m expecting they will, thanks to a slowing economy and labor market—it will be wildly bullish for bonds (which trade inverse rates.)… Read more

Read More

My Outlook for Tech Stocks (and One 6.2%-Paying Fund) in 2024

The first week of 2024 was a rough one for stocks—and that, oddly enough, suggests we might see a good year for stocks in 2024.

But as we’ll discuss below, recent market moves also suggest some parts of the technology sector are starting to look just a little overbought now—especially one 6.2%-yielding tech-focused closed-end fund (CEF).

I know that’s a lot to lead off with, so let’s break it down.

A week and a half before Christmas, and before last year’s Santa Claus rally, I wrote that we didn’t want a Santa Claus rally to end ’23. That’s because these year-end market bounces have historically led to the following year to be weaker for the markets.… Read more

Read More

My #1 Prediction for 2024 (and Our CEF Dividend Strategy to Profit)

Today I want to go over what the economic data is telling us about the future of the financial markets in 2024.

Truth is, we are likely inching toward a recession, which means it’s time to be a bit more cautious. But at this point I only see us “backing into” a recession—and likely not till 2025, 2026 or maybe even later.

The upshot here is that when a recession does hit, we’ll want to make sure we have a steady income stream so we can keep on collecting our high payouts right through to the other side. As part of this strategy, we’re going to “lock in” the 8%+ yields (often paid monthly) available on some of our favorite closed-end funds (CEFs) while they’re still cheap.… Read more

Read More

My #1 Prediction for 2024 (and Our CEF Dividend Strategy to Profit)

Today I want to go over what the economic data is telling us about the future of the financial markets in 2024.

Truth is, we are likely inching toward a recession, which means it’s time to be a bit more cautious. But at this point I only see us “backing into” a recession—and likely not till 2025, 2026 or maybe even later.

The upshot here is that when a recession does hit, we’ll want to make sure we have a steady income stream so we can keep on collecting our high payouts right through to the other side. As part of this strategy, we’re going to “lock in” the 8%+ yields (often paid monthly) available on some of our favorite closed-end funds (CEFs) while they’re still cheap.… Read more

Read More

3 Ways to Buy Stocks (and Bonds) for Up to 37% Off

Today I want to show you three funds that are highly unusual in a way that matters a lot to many folks: all three are free from a management-fee perspective.

In fact, these three funds—closed-end funds (CEFs), to be precise—are more than free: they have negative management costs!

What do I mean? Well, usually index funds sell themselves on being cheap. Fees on the Vanguard S&P 500 ETF (VOO), for example, are just 0.03%, or $300 in annual fees for every $1 million invested, in other words.

There are even funds out there that cost nothing, like the Fidelity ZERO Total Market Index Fund (FZROX), which has no expenses at all.… Read more

Read More

This 7.9%-Payer Just Hinted Its Payout Will Grow

Closed-end funds (CEFs) really are the “Swiss army knife” of investments: with one click, they let us grab big income (the average CEF yields 7.9%), diversify (within and beyond asset classes) and buy their holdings for cheap!

But let’s be honest, when it comes to CEFs, it’s all about the dividends.

On that front, there’s a lot to say. For one, many CEFs pay monthly, making managing our income easy: CEFs’ high yields mean we could potentially replace a $6,500 monthly paycheck with less than $1 million invested and live on dividends alone.

And check out these discount and dividend stats from across the CEF space:

  • A third of all CEFs yield over 10%.

… Read more

Read More

This 10.6% Dividend Is the Best Way to Play the Tech Bounce

It’s no secret that stocks—especially tech stocks—have soared this year. And today I’m going to show you a contrarian dividend play I see as the perfect way to take advantage.

And before you ask, no, we’re not too late here, even though it may look like we are, in light of the NASDAQ’s 40% rise in half a year.

The key to unlocking tech-driven gains is not buying overbought darlings like Meta (META), Alphabet (GOOGL), Apple (AAPL) and Amazon.com (AMZN). Instead we’re buying through a closed-end fund (CEF) yielding an outsized 10.6% and trading at a 15.7% discount to net asset value (NAV, or the value of its underlying portfolio).… Read more

Read More

Buying This Fund Is Like Buying Apple With a 12.1% Dividend

We’ve seen a big bounce (and 12%+ dividends!) in one particular type of closed-end fund (CEF) this year—and all of my buy indicators suggest this profitable play is still in its early stages.

Specifically, I’m talking about tech-focused CEFs—which we’re getting a nice second chance to buy thanks to last week’s earnings whiffs from the likes of Apple (AAPL) and Alphabet (GOOGL).

Buying a tech CEF is like buying an ETF that focuses on technology, but with two key differences:

  • Big dividends: the CEF we’re going to analyze today yields 12.1%—and it pays dividends monthly, too. You and I know that both of these things are unheard of in the world of “regular” stocks and funds.

… Read more

Read More

Categories