What the Trump Election Win Means for Our CEFs (Including This 11%-Payer)

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What the Trump Election Win Means for Our CEFs (Including This 11%-Payer)

Immediately after President-Elect Donald Trump won his second term last week, the US dollar surged, while US Treasuries fell:

Election Sends Dollar Up, Treasuries Down in Early Trading

Both moves are opposite sides of the same coin: Investors believe Trump’s policies will be inflationary. The theory suggests this would happen for a couple of reasons:

  1. The US government will spend more, and interest rates will rise higher than rates elsewhere in the world in response. That will attract foreign capital to America while making it less attractive for capital to leave the US.
  2. All of that extra capital in America will boost economic activity and demand for the dollar.

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The “Stealth” Funds That Pay $1,000 a Month on Every $100K Invested

I can’t tell you how many times I’ve mentioned closed-end funds (CEFs) to investors and been met with blank stares in return.

It’s too bad more people don’t know about these powerful income plays because …

  1. CEFs let you diversify, not only within stocks but beyond them. Among the 500 or so CEFs out there are funds that own stocks, corporate bonds, municipal bonds, real estate investment trusts (REITs) and more.
  2. CEFs often trade at discount to net asset value (NAV, or the value of their portfolios). This means we can buy shares of high-quality firms like Apple (AAPL) for less than market value.

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3 Funds to Beat Post-Election Volatility, Deliver 8%+ Dividends

With more volatility likely as we move past the election and into late 2024, retirement planning might not be top of mind for you right now.

I get it.

But with investing—income investing, especially—it’s critical to keep the long term in focus. And over the long term, the direction of the markets is up.

When we invest in closed-end funds (CEFs), we get an extra advantage: High income, which often comes our way monthly. The average CEF yields 8% now. That’s roughly the long-term average annualized price gain of the S&P 500, depending on the timeframe you look at, delivered to us in dividend cash every year.… Read more

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3 Funds to Beat Post-Election Volatility, Deliver 8%+ Dividends

With more volatility likely as we move past the election and into late 2024, retirement planning might not be top of mind for you right now.

I get it.

But with investing—income investing, especially—it’s critical to keep the long term in focus. And over the long term, the direction of the markets is up.

When we invest in closed-end funds (CEFs), we get an extra advantage: High income, which often comes our way monthly. The average CEF yields 8% now. That’s roughly the long-term average annualized price gain of the S&P 500, depending on the timeframe you look at, delivered to us in dividend cash every year.… Read more

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Yields 14.4%, Sure, But It’s Comically Overpriced

Who is paying a 27% premium for Guggenheim Strategic Opportunity Fund (GOF)?

Don’t get me wrong. GOF is a fine fund, delivering 9.8% yearly returns on its net asset value (NAV) since inception. But we are talking nosebleed valuation territory for GOF. It’s a dangerous purchase at these levels.

Bandwagoners buying today are unlikely to see 9.8% returns. Or anything close. Plus, they are exposing themselves to 27% downside risk because, as we’ll discuss in a minute, GOF eventually finds its way back to par.

How can a premium like this exist? GOF is a closed-end fund (CEF) with a fixed pool of shares.… Read more

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