Author Archive: Michael Foster

As America celebrates its 250th, there’s something happening inside its economy that’s not getting enough attention.

A quiet boom.

It’s one more thing worth celebrating this month—and we’re going to do that. We’re also going to get set for the next leg of America’s low-key growth run with a closed-end fund (CEF) yielding north 11.6%.

The chart below, which The Economist published two years ago, nicely sums up the wealth-building power of the US economy over the long haul.

The key piece of info here is on the left side of this chart. Here, we can see that over the last century, each generation of Americans has started its working career earning more than previous ones.… Read more

Today we’re going to discuss a 6%-paying fund that’s quietly built a portfolio perfectly tuned for the rest of the 2020s.

Few investors realize it … yet. Which is why we can grab this 6% payer (whose payout looks set to grow from here) at a 10% discount to its “true” value.

The fund in question is the Sprott Focus Trust (FUND), a closed-end fund (CEF) managed by Whitney George. He’s a manager you may have heard of: George is known for the profits he’s earned over the decades by focusing on two key areas: energy stocks and small caps.… Read more

The wind is shifting around AI—and we’re getting set to ride the next wave with dividends up to 12.3%.

Today we’re going to discuss what I see as the “intersection” between AI’s growth and the 8%+ income streams we’re drawing from the portfolio of our CEF Insider service.

Then we’re going to spotlight three CEFs in the sweet spot: They’re profiting indirectly from AI’s growth, while giving us exposure to sectors beyond tech.

Here’s why I see that as a strong move now.

On the one hand, AI is helping companies find new efficiencies. And I know I don’t have to tell you that tech is driving big investments across the economy.… Read more

There are plenty of reasons to buy closed-end funds (CEFs), but the one that most investors love most is pretty obvious.

The income!

The average CEF yields 8.7% as I write this. And while most investors have been conditioned to believe that this level of payout is unsustainable, this is not the case with CEFs. Many of these funds sport yields of 8% or more and haven’t cut payouts in years, even decades.

In fact, several have grown their dividends in that time.

The reason why is simple: The stock market gains around 10.6% per year on average. So a CEF that invests in stocks and pays 10.6% per year can maintain payouts, theoretically, since the fund is just handing that profit to shareholders as a dividend.… Read more

Every now and then, something happens that shines a light on the value of our favorite income investments—our 8%+ paying closed-end funds (CEFs).

These stout income plays are so valuable, in fact, that some activists are willing to go all the way to the Supreme Court to gain more influence over them.

Let me explain.

A couple weeks ago, the nation’s top court released a decision that meant a lot for CEFs, including those in the portfolio of our CEF Insider service, which yields 8.7% on average as I write this.

Let me set the scene, starting with the activist in the spotlight.… Read more

ASA Gold & Precious Metals Limited (ASA) is a standout among closed-end funds (CEFs), but not for the reasons we’d like!

For one, this gold-focused CEF pays almost no dividend itself (its yield is a meager 0.14% as I write this). That’s unusual for a CEF, as investors mainly buy these funds for their high yields. As I write this, the portfolio of my CEF Insider service yields a stout 8.9% on average.

As the fund’s name says, its main function is to give investors access to physical gold (64.2% of the portfolio). Silver makes up another 5%, and shares of gold-mining companies account for most of the rest.… Read more

This Iran deal adds one more tailwind to our (already surging) 8%+ paying closed-end funds (CEFs).

It’s just one more “boost,” on top of many others, that point to more upside ahead for these proven income plays.

Why do I say that? Because if the agreement holds up (and that’s still uncertain at this point), oil will likely continue its retreat. That, in turn, sets the stage for lower inflation—and falling interest rates, too.

And the lower rates go, the better CEFs tend to perform.

That makes now, while rates remain elevated, the time to make our move. And the Neuberger Berman Next Generation Connectivity Fund (NBXG), a recent addition to the CEF Insider portfolio, is a solid option that’s clinging to an undeserved double-digit discount.… Read more

We love CEFs for a simple reason: Their big dividends are the best route to financial independence.

I say that from experience: Years ago, CEFs’ high income streams allowed me to leave a full-time job I disliked, travel, and live wherever I wished to. Later on, I launched my CEF Insider service to help other investors unlock these funds’ vast income potential.

Today we’re going to look at a high-quality (and high-yielding) equity-focused CEF to see how it delivers its outsized income stream (a 10.5% yield as I write this). Then we’re going to stack it up against another CEF you might think is a strong buy, but unfortunately this fund’s size and celebrity manager mask some significant flaws.… Read more

Last week’s selloff in AI stocks was painful for the mainstream crowd—and an opportunity for us contrarian income investors.

AI darling NVIDIA (NVDA) dropped 8.5% on the week. Others took bigger hits: Micron Technology (MU), for example, fell 16.6%.

The result? A chance for us to pick up our favorite AI-focused dividend funds on the dip—starting with one suddenly cheap “all-in-one” play from the portfolio of my CEF Insider service.

That would be the Columbia Seligman Premium Technology Growth Fund (STK), which holds key AI providers like Microsoft (MSFT), NVIDIA and Alphabet (GOOGL), as well as AI-infrastructure plays like Lam Research (LRCX) and Bloom Energy (BE).… Read more

The stunning thing about this year’s stock-market rally is that much of it has come in just the last couple of months.

That’s especially the case in tech: The NASDAQ has returned 33% just since March 30, as of this writing. The tech benchmark Vanguard Information Technology Index Fund (VGT) has done even better, spiking 48%.

That surge has, naturally, raised some concern. After all, isn’t the job market slowing? And aren’t inflation and interest rates staying relatively high?

Those worries are valid, of course, but the fact is that over time, stocks tend to track back to corporate earnings and sales growth, and both are surging.… Read more