One of the things we contrarian income seekers love about closed-end funds (CEFs) is that they often sell for less than what they’re worth.
CEFs’ discounts are especially appealing these days, as the market levitates into the stratosphere. Because when you buy stocks through a CEF trading at, say, a 10% discount to net asset value (NAV, or the value of the investments in its portfolio), you can get into great companies like Apple (AAPL), Microsoft (MSFT) or Visa (V) for 90 cents on the dollar.
This is a great trick—one you can’t find in ETFs or mutual funds. Plus, CEFs yield 7.3%, on average, today, so you get a monster payout in addition to your discount.… Read more