Why We Love to Buy “Freshly Cut” Dividends (3 Yielding Up to 13.6%)

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Why We Love to Buy “Freshly Cut” Dividends (3 Yielding Up to 13.6%)

If you invest for long enough, you may hear a skeptic of high-yield investments—such as 8%+ yielding closed-end funds (CEFs)—say something like:

“Sure, you’re getting a lot of income now, but what if that dividend gets cut?”

Today we’re going to answer that with a look at how a dividend cut can actually send a CEF (or any dividend investment, really) on a profitable run. We’ll do it by looking at three CEFs that followed this exact pattern: Cutting dividends and then going on to give investors huge returns for years and years.

These funds show that a dividend cut on its own isn’t reason enough to avoid an investment.… Read more

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This Ridiculous Fund is 512% Overvalued (Elon Musk Could Pop Its Bubble)

I often talk about high-yielding closed-end funds (CEFs) that are great buys because, well, there are plenty of CEFs that are. Yes, even in unprecedented times like these!

That’s because the best CEFs offer three things we love:

  • Big dividends, with an average yield of 7.8% across the asset class.
  • Bargain valuations, with average discounts to net asset value (NAV, or the value of a CEF’s underlying portfolio) of 5%.

    And how’s this for a stat …
  • Proven performance, with 94% of CEFs posting positive returns (with dividends reinvested) over the last decade. Ninety. Four. Percent.

Still, every once in a while, a CEF comes across my desk that’s an obvious one to sell (or avoid if you don’t already hold it).… Read more

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Why It’s (Almost) Time to Buy This 15.6% Yielder

There are two things I need to bring to your attention right now, especially if you’re an income investor. One is my outlook for the market, as volatility really hits home.

The other is a 15.6%-yielding(!) fund that just changed its name and ticker—and really grabbed contrarians’ attention in the process.

Let’s start with what’s really going on with this wild market.

The NASDAQ is now down more than 10% from its peak price, and stocks on the whole are down for the year. I don’t expect this to last very long. My take: 2025 is likely to be a year of volatility rather than a year of decline.… Read more

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