This Safe 4.5% Tax-Free Dividend Will Never Be Cheaper

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We’ve got a pullback-driven (and tax-free!) dividend opportunity waiting for us now, and we can thank the Fed’s looming rate hikes for it. It’s a “safety first” closed-end fund (CEF) paying a 4.5% tax-free dividend and trading at a rare 8.4% discount to its “true” value.

This opportunity comes our way through municipal bonds, or “munis.” If you follow the market for these bonds, which are issued by state and local governments to fund infrastructure projects, you know that they’ve pulled back this year:

Munis Slip, Giving Us an “In”

A 2.9% drop, as we see here in the iShares National Muni Bond ETF (MUB), the benchmark ETF for the space, is small compared to the much bigger declines in stocks, but this is pretty rare: as an asset class, muni bonds are less volatile than other kinds of bonds, let alone stocks, which is why any short-term drop tends to be a buying opportunity.… Read more

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A wild year like 2020 is a great acid test for closed-end funds (CEFs)—and it can tell us a lot about which of these high-yield plays to pick (and avoid!) as we move deeper into 2021.

A Split Market

If 2020 did anything, it widened the gap between winning and losing sectors of the stock (and closed-end fund) market. It just goes to show how critical it is to pick funds in the right sectors, as well as those with savvy management that can shift with the times.

Technology, of course, boomed last year. At my CEF Insider service, we were well-positioned in tech with the BlackRock Science and Technology Fund (BST), which we added to our portfolio in August 2019.… Read more

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There are, as I write this, 3 high-yielding funds giving investors over 5% in dividend income. Plus they pay out every month, tax-free.

All 3 sold off at the end of 2017. And I’m watching one group of investors who are waiting to buy back in when a “time limit” I’ll explain in a moment expires in the next few weeks.

That makes now a good time to buy. Because when this “deadline” comes and goes, I expect all 3 of these funds to rise.

Before I show you these funds, I want to give you the inside scoop on this unique situation.…
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Don’t be cheap when you buy bonds this holiday season (or ever, for that matter). Bargain shoppers, sadly, tend to be the most at-risk of outliving their fixed income portfolios!

But it’s easy for you and me to double up “regular” bond returns simply by swapping out popularity for quality.

Let’s walk through some of the most popular fixed-income plays today – and replace each with something that yields more (with superior price upside to boot).

The obsession with fees is understandable. Most investors are conditioned by their experience with stock-based mutual funds and ETFs to search out the lowest fees, almost to a fault.…
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If you want to find the best high-yield opportunities on Wall Street, you don’t follow bright neon signs – you turn over rocks.

Years of research has shown that the most widely recommended names are typically overcrowded trades, killing any chance you have at wringing out any value. Worse, analysts’ and pundits’ picks are often so conservative that they actually pose a danger to your retirement by producing sleepy returns and only so-so dividends.

That’s why I love closed-end funds (CEFs) like the three high yielders (between 7% and 9.5%) that I’m going to show you today. They garner no media coverage, so they’re less likely to develop into bubbles.…
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