Author Archive: Michael Foster

Suddenly, investors think AI is bad for software companies.

The truth? This whole story is a red herring. The real tale here is one of gains—and dividends—not losses. And we can nicely tap in with a fund sporting unique “downside insulation” and an 8% dividend, too.

Why the Software Selloff Is Overdone

Truth is, the premise of this whole argument is wrong, especially from an investment standpoint, and the reason why has a lot to do with timing: This bear market in software that’s shown up in less than a month and on news that’s, frankly, flimsy.

To wit, the selloff began because of a new product by Anthropic.… Read more

The recent plunge in software stocks is another reminder that AI is rattling through the economy, setting off rapid change and disruption wherever it goes.

Investors sold software stocks on fears that new AI tools will make it easier for individuals to create their own apps, potentially taking business from software developers.

This is a big change—and here’s some news that might surprise you: For income investors, it sets up another way to tap AI’s growth for dividends. We welcome that; in the early days of AI, the only real ways to get in were through low- (or no-) payers like NVIDIA (NVDA).… Read more

We need to talk about this bitcoin plunge.

I know. We’re income investors, so you may be wondering why we need to talk about crypto at all, right?

Two reasons.

First, there are bitcoin-driven income ETFs out there. And I’m concerned this latest drop might convince some people that these funds are a good value now. (Hint: They’re not.)

Second, I’m concerned the cryptocurrency’s latest drop might ward investors off of income-focused closed-end funds (CEFs) that focus on the technology sector as a whole. That would be a mistake. The truth is, bitcoin’s struggles have given us an opening on these high-yield funds.… Read more

Utility stocks have been on a roll as more people come to see them as a way to play AI’s bottomless power demand.

Let me say off the top that this does not mean the “AI-power trade” is played out. Far from it.

But it does mean we need to pick our spots when investing in the sector. To that end, I’m going to give you my two-part strategy on how to approach utility stocks now.

The first part: We go with 8%+ paying closed-end funds (CEFs) to play this sector. There’s a simple reason for that: Utility CEFs pay far higher yields than individual utilities or ETFs.… Read more

A multi-year disconnect in high-yielding REITs is about to turn on its head. When it does, these solid income plays are poised to shoot ahead of stocks.

I’m talking about a quick reversal of pretty well everything investors thought had REITs left for dead, interest rate trends and the work-from-home shift among them.

Now is the time to buy. And we contrarian income investors know the play:

At times like these, we look to 8%+ paying closed-end funds (CEFs) to reap the strongest dividends and potential upside.

I say this as REITs, long-time market outperformers, have been stuck in an unusually long slump.… Read more

If you’re wondering whether the rally in tech stocks is fading, well, it is. 

So if your portfolio is heavily weighted toward the sector (and it very well could be, given tech’s meteoric run), it’s time to shift.

We’re going to look at why the so-called Magnificent 7’s years-long run is set to ease in the months ahead. Then we’re going to go on offense and defense at the same time.

On offense, we’ll look to front-run the crowd into what I see as the next hot sector to benefit from the rise of AI. And for defense, we’re going to make a move to boost our dividend income substantially.… Read more

My prediction for 2026? Strange as it may sound, given the wild headlines we’re seeing pretty much daily, I’m calling for more of the same.

As I said a couple weeks ago, I expect around 12% returns from the S&P 500 this year.

That’s why we’ve been adding to the equity CEFs in the portfolio of our CEF Insider service. Today I want to talk about one of our holdings, in particular: a 9%-payer called the Liberty All-Star Growth Fund (ASG).

We’re zeroing in on this one because its discount to net asset value (NAV, or the value of its underlying portfolio) is the biggest it’s been in three years.… 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 8.6% 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

I’m a contrarian at heart—but sometimes even contrarians have to go along with the mainstream opinion.

This (as much as it pains me!) is one of those times. You see, like most of the pundits out there, I expect another strong year for stocks in 2026. I see a roughly 12% gain for the S&P 500 this year, to be exact.

That bothers me. A lot.

I know that four strong years in a row is rare, indeed. But that’s what the data is telling me, and I’m not going to argue with it.

Still Plenty of Cheap CEF Dividends Out There—Even in This “Pricey” Market

Now this doesn’t mean there’s a lack of bargains waiting for us in our favorite income plays: 8%+ closed-end funds (CEFs).… Read more

While tech is all over the news these days, there’s another corner of the market throwing investors cheap, and surging, dividends. These stocks quietly soared in 2025, but they’re still cheap enough for us to get in on now.

And we have plenty of ways to do so at a bargain.

Chief among them? A growing 7.2% dividend that’s suddenly on sale.

Let’s set the table on that strong fund with the 50,000-foot view: I’m talking about the financial sector, which returned 15% in 2025, going by the performance of the Financial Select Sector SPDR Fund (XLF).

That makes it the fourth-best performer of all sectors, behind tech, industrials and communication-services stocks—the latter of which actually includes tech names like Meta Platforms (META) and Alphabet (GOOGL).… Read more