Author Archive: Michael Foster

Are we in a stock market bubble or not? Let’s tackle that question head-on, because it’s all we seem to be hearing about these days.

I’ll put my cards on the table: We’re not in a bubble. I’m going to show you why I’m still bullish on stocks at these levels. Then we’re going to play overwrought bubble fears with a “cornerstone” fund that’s beaten stocks over just about every timeline but is still cheap (and yields a rich 8%, too).

When it comes to stocks, the truth is, there’s a good reason why they keep rising: We’re in a booming economy.… Read more

I hate to see investors (particularly retirees) starving for dividends, especially with inflation stuck around 3% (and you and I both know that the real number is higher—just head down to your local grocery store!).

A big myth around dividends is that you have to invest a lot upfront to get anything meaningful in return. It’s easy to see why people feel that way, with the average S&P 500 stock paying a meager 1.1% as I write this.

This is where my favorite investments, closed-end funds (CEFs), come in. Using the three we’ll delve into below, you could get a little over $1,000 a month in income, thanks to their double-digit yields.… Read more

If I can give you one piece of advice now, it’s this: Don’t fear this talk of an AI bubble.

In fact, we should love it, because it’s set to hand us a shot at big dividends and gains—especially in closed-end funds (CEFs), which yield around 8% today and regularly hand us “dividend deals” that simply shouldn’t exist.

Our job: Buy, then ride along as CEF investors, who tend to be slowpokes compared to stock buyers, finally come around and bid our funds’ prices up. And we collect those rich dividends—often paid monthly—while we wait.

One CEF is giving us just such a nonsensical discount today: a 7.7%-payer called the Virtus Artificial Intelligence & Technology Opportunities Fund (AIO).… Read more

Business development companies (BDCs) have gained popularity in recent years, but they still don’t get as much attention as they should. Which is too bad, because they pay life-changing (no exaggeration here) dividends.

The two we’ll look at below yield more than 12.9%. In other words, drop $10,000 in and you’re getting $1,290+ back in dividends every year.

That makes BDCs useful tools for retirees. They’re also a “best friend” to what I’ll call “middle market” companies—those that are too big to borrow from a local bank but too small to interest big, institutional players like, say, a Goldman Sachs (GS).… Read more

I’m regularly struck by something American investors always seem to take for granted: The many choices we have available to gain financial independence.

And investors in closed-end funds (CEFs) make the most of these choices. These high-yielding funds kick out 8%+ dividends on average, and the portfolio of my CEF Insider service, which helps investors make the most of CEFs, pays even more, with its 18 holdings paying a rich average yield of 9.4%.

Plus, these funds offer stock-like upside, which makes them pretty much tailor-made for delivering financial freedom.

We’ll sketch out how two specific CEFs can help you find your way to an earlier, richer retirement in a bit.… Read more

I know, I know. This levitating stock market feels like a bubble that will burst any day.

So I get it if you’re nervous. And that’s actually a good thing. It pays to be wary when everyone else is throwing money at any asset—stocks included.

My take? Well, it might surprise you, but it’s this: We’re not in a bubble—AI-driven or otherwise.

But I get the fear—which is why we’re going to look at a two-step move that addresses it. This “best of both worlds” play gives us yields up to 8.2% and a hedge if, say, bullish analysts (like me!)… Read more

The AI data-center buildout is all over the news, and for good reason: It’s quite literally upending the economy.

That’s set up plenty of opportunities for us income investors to cash in. But in a moment, we’re going to talk about one specific fund we need to sell yesterday. It yields a sharp 9.9% now. The problem? It’s nearly 2X overvalued!

It’s easy to see what’s catching investors’ attention on the data center front: Investment in AI’s computing backbone is on track to contribute more to US economic growth than the American consumer.

To say that this is incredible is an understatement.… Read more

An intriguing article came across my desk recently, and it said something we income investors need to talk about.

It was a Q&A with Morningstar’s director of personal finance, Christine Benz—and it reinforced, to me, why now is the time to snap up one of the top (and 8.4%-yielding) picks from the portfolio of my CEF Insider service.

I encourage you to read this article. It’s mostly fine. But it contains one piece of advice I think will be widely misunderstood. At one point, Benz says:

“What we’ve seen from real estate equities is kind of a steady upward march in correlations with the broad US equity market over the past couple of decades, to the point where I really don’t see the diversification benefit.”

What if you could squeeze, say, a 70% dividend yield from a fast-growing AI stock like NVIDIA (NVDA) or Palantir (PLTR)?

Sounds great, right?

Instead of relying just on these stocks’ prices for your profits (since dividends are, frankly, the furthest thing from their CFOs’ minds), you get their returns as high-yielding dividends.

That’s something a new breed of ETFs is promising. These funds, which are gaining in popularity, hold just one stock—usually a Palantir, Tesla (TSLA) or NVIDIA—and trade options on that one stock to deliver stated yields often way above 50%.

Does it work?

First, let me say that, as someone who has covered 8%+ yielding closed-end funds (CEFs) for over a decade, I get the sentiment behind these funds.… Read more

Small caps are (finally!) back, but most people are in the dark about how to tap them for serious dividends. But there is a proven way to do that—one that puts a rich 7.1% payout squarely on the table for us.

Everyone has missed this one. We’re going to dive into it today.

The main reason I hate to see people ignore small caps—especially now—is that, well, their time has come.

Small Caps Have Lagged for Years—And They’re Due for a Bounce

As you can see, It’s been a solid decade of small-caps delivering, well, small profits to investors. But it’s time for the script to flip.… Read more