Big Payouts, Lousy Returns: Avoid These Funds (Yielding Up to 8.9%) in ’24

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Big Payouts, Lousy Returns: Avoid These Funds (Yielding Up to 8.9%) in ’24

Here’s the thing about high-yield closed-end funds (CEFs): sometimes a CEF will seem to have all the earmarks of a terrific investment: high (and monthly) dividends, reasonable fees and reputable management. But it’ll still come up short.

We, of course, love CEFs and see them as the critical pieces of our income portfolios. The portfolio of my CEF Insider service, for example, holds plenty of top-quality buys and yields 9% as I write this.

But when picking these funds, we need to make sure we don’t let a big name, high yield or so-called “low” fees dominate our thinking. We also need to look deeper, at factors like past performance and even management’s track record with its other funds.… Read more

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3 Funds That Could Pay You Huge 7%+ Dividends Ranked Worst to First

These days, many of the dividend investors I talk to feel squeezed between:

  1. Weak yields (which have plunged as stocks have surged) and
  2. High taxes (which are likely to rise further).

You’re no doubt feeling this pinch, too. The good news is that there’s an investment that lets you wiggle out of this trap, regularly offering steady-as-she-goes dividends up to 5%.

There’s another nice twist that works in your favor here, because these payouts are tax-free, so they could be worth a lot more to you—I’m talking payouts north of 7.5% with tax savings factored in, depending on your tax bracket.… Read more

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Here’s a “DIY” Plan for 6.1% Dividends, Yearly 11% Returns

If you’re on the lookout for an expert to help you build your nest egg—and bulk up your dividend stream to, say, a 6%+ yield—you have two main choices: a professional wealth manager or an investment advisory service (or a newsletter, as they’re more commonly known).

Which is for you? Let’s break down both options. Then we’ll dive into the kind of three-fund portfolio a newsletter might tip you off to, with a healthy 6.1% income stream and a history of double-digit yearly returns, too.

Wealth Managers Charge More, But They’re a Help in a Crisis

With active wealth management, the main concern most people have is fees.… Read more

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These “Stealth” 5% Dividends Are Really 8.3% (Surprising Tax-Free Secret)

The disaster that was 2020 is finally out of our hair, though there could be one silver lining if you followed a contrarian investing approach in 2020: serious gains in your stock portfolio.

But, of course, those gains come with a big consequence: Uncle Sam will be coming for his share on Tax Day in April. And to be honest, we don’t have much leeway to cut our 2020 tax bill at this point. But there is one canny move we can make to (legally, of course!) reduce our tax burden in April of next year: buy municipal bonds.

What Everyone Gets Wrong About Municipal Bonds

Sure, municipal bonds (issued by cities and states to fund local infrastructure) seem like a pretty boring option when there are corners of the stock market (I’m looking at you, tech) that jumped 40%+ last year.… Read more

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The Bull Market in CEFs: Why It Really Is Different This Time

Closed-end funds are absolutely crushing the S&P 500.

So far in 2017, the SPDR S&P 500 ETF (SPY) is up 7.8%, including dividends. That’s impressive considering the geopolitical calamities, unpredictable moves from the White House, economic uncertainty and rising interest rates the market is facing.

But what’s even more impressive is that over 200 closed-end funds (CEFs) are up even more than that.

Let’s take a look at our new CEF Insider research service’s proprietary Total CEF Index.

Of the 500 funds it covers, almost half (229) are beating the S&P 500 so far in 2017. And it’s hard to nail down a common thread that ties them all together.…
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