CEF Deep Dive: The One “Profit Indicator” Everyone Gets Wrong

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CEF Deep Dive: The One “Profit Indicator” Everyone Gets Wrong

The other day, we broke down how return of capital (ROC) can be both good and bad for investors in 8%+ yielding closed-end funds (CEFs). But in the case of high-quality CEFs, ROC is, contrary to what most people think, a good thing.

Today we’re going to look at some real-world examples to explain how, in fact, return of capital can make up a large share of a fund’s returns.

To do so, we’re going to go into five Nuveen funds, the Nuveen S&P 500 Buy-Write Income Fund (BXMX), Nuveen Dow 30 Dynamic Overwrite Fund (DIAX), Nuveen S&P 500 Dynamic Overwrite Fund (SPXX), Nuveen NASDAQ 100 Dynamic Overwrite Fund (QQQX) and Nuveen Core Equity Alpha Fund (JCE).… Read more

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Thank the Financial Press for These 10%+ Dividend Deals

Way too many financial writers have been decrying this market “pullback” we’ve seen in the last few months … but they’re entirely missing the point.

The “boring” truth is that what we’ve been seeing is nothing more than a transition from a panicked market to a more normal one. That’s the kind of setup the drama-fueled press hates—but we income investors love.

After all, in a “normal market,” we can buy our favorite high yielders—and there are plenty out there trading at bargain prices right now—without worrying about “losing our dividends” to price declines.

How do I know we’re shifting to a more normal market?… Read more

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This 8%-Yielding Fund Soared 260% (It’s Just Getting Started)

This market’s insistence on falling—even though earnings are soaring—has opened up a strong buying opportunity for us dividend investors.

And we’re going to tap it to grab a rare “double discount” on an 8%-yielding closed-end fund (CEF) that no one’s noticed. This income-and-growth machine has soared 260% since inception and has the potential to crush stocks this year, thanks to its undeserved markdown.

More on that below. First, let’s talk about this stock-market disconnect, because recent declines have yanked the S&P 500’s price-to-earnings ratio down to 23.8. That may not sound cheap, but it’s far below last year at this time, when valuations hit a nosebleed 43.7.… Read more

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This 7.1% Dividend Makes Your Nest Egg Last Forever

Are you worried you’ll make the wrong call in this gyrating market? It’s a reasonable fear, with the Dow heading up 200 points one day and down 600 the next—and dark trade-war headlines piling up daily.

But sitting in cash is even more dangerous! Because your stuffed mattress is at the whim of inflation—and that slow cash drain leaves you at a real risk of outliving your money in retirement!

So today I’m going to share where my models see this market heading. Plus I’ll reveal one weird fund that sets you up for double-digit upside and a huge 7.1% dividend, too.… Read more

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How to Buy Your Favorite Stocks at 14% Off (with yields up to 7%)

If you’ve read the headlines about tech’s woeful slump in the past couple weeks, you might think stocks are out of favor.

You’d be wrong—and this chart proves it:

Forget the Headlines: Stocks Are Rolling

After February’s gut-wrenching plunge, the S&P 500 has more than recovered and is up 6.2% year to date. If this trend continues, we’re looking at a 12.4% return on the year.

But look at the orange line above—that’s the tech-benchmark Invesco QQQ Trust (QQQ), which is up 13.2% year to date, even after this latest correction in tech. That adds up to a monstrous 26.4% return for 2018 if that trend continues.…
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3 “Screaming Buy” Dividends up to 10.1% with Huge Gains on Tap

By now you may have heard about the huge dividends and soaring price gains offered by closed-end funds (CEFs).

But here’s something that will probably surprise you: you can lock in even bigger—and safer—income streams (I’m talking 7%+ dividends), plus massive upside with smaller CEFs.

I know that sounds counterintuitive, and quite the opposite of what happens with stocks; small-cap companies rarely pay dividends and can collapse overnight.

Go Big the Small Way

The key is to go with small CEFs sporting portfolios backstopped by large cap stocks and whip-smart management teams, like the 3 funds (paying up to 10.1% in cash each) I’ll show you in a moment.…
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