Author Archive: Michael Foster

Corporate-bond funds are cheap now, and their yields have soared.

We can “thank” high interest rates for that. When rates rise, bond prices fall. That, as always with bonds, is a key part of our buying opportunity today.

What’s more, this opportunity is (finally!) starting to get on the mainstream crowd’s radar.

How do I know? Because even the financial press (which seems like it’s been able to talk about tech stocks and little else for years now) is catching on: CNBC recently published a story with a title that literally said, “This could be one of the best times in recent market history to buy corporate bonds.” … Read more

This tech-stock wobble is rattling the mainstream crowd.

Good. We welcome it.

It goes without saying that tech stocks have been sucking up all the oxygen in the markets for years now. That, of course, has pulled attention away from other corners of the market, particularly those that offer lower volatility and higher dividends.

We’re buying those unloved payers now. That not only sets us up for high, stable dividends—it gets us in right as tech-stock volatility picks up, and potentially drives investors toward these off-the-radar assets.

Our main target? Real estate investment trusts (REITs), which I see as prime candidates to shine in 2027.… Read more

The world’s biggest asset manager says now is the time for us to grab “generational high yields.”

I believe them. And today we’re going to follow their advice.

The setup is clear: Even though high bond yields have caused a lot of worry, especially around heavily indebted AI firms, these worries (as they often do) bring opportunity.

That opportunity is this: Yes, yields on corporate bonds have soared, especially in the more speculative corner of the market, where heavily indebted AI players like CoreWeave (CRWV) operate.

But in other corners of the bond market, something interesting is happening: Yields are hitting highs not seen in 18 years, while default risk remains low.… Read more

This market is in a weird place: rising but scared.

Disconnects like these are exactly what make our contrarian income strategy work.

Here’s the state of play: Stocks, of course, have risen this year, with the S&P 500 up around 12%. That’s because, even though investors are dour, enough of them see that corporate America is in a “profit boom”: According to the latest numbers from FactSet, S&P 500 companies are set to report profit growth of 33.1% for all of 2026, on 12.8% revenue gains.

These are huge numbers, and they fully justify this year’s gains.

But if you’ve been watching the movements of the overall market (and I’m guessing you probably have), you’ll have noted that it’s been mostly grinding sideways since around mid-summer, with occasional sharp moves—some of them major—up and down.… Read more

We’ve got a very nice buy setup in 7%-paying closed-end funds (CEFs) in front of us. Few people realize it.

It stems from the fact that, while stocks have taken a breather after booking strong gains so far this year, many CEFs are lagging more than they should be. The cause? Overdone investor fear around, you guessed it, AI.

That dour mood has set up a particularly interesting dynamic in CEFs holding US stocks:

The chart above, from my CEF Insider service, shows that these funds’ average return based on their market prices (in green) is up about 7.2% so far this year.… Read more

There are hundreds of closed-end funds (CEFs) out there, and almost all of them have an investor they’re perfect for.

I say “almost” because there are a few that are, in my view, not appropriate for any investor. These CEFs are highly speculative and, for the most part, don’t provide a dividend. That flies in the face of a key reason to own CEFs in the first place: high payouts! These funds typically yield around 8%.

We also generally want to be wary of new CEFs with little performance history. When you combine that with a lack of payout focus, you can find yourself taking on some very significant risk.… Read more

The market has served us up a tidy opportunity on a closed-end fund (CEF) yielding an eye-popping 13.1%.

What’s more, this fund is oversold, at a 12.1% discount to net asset value (NAV).

Before I name this CEF, let me explain why this opportunity is in front of us. And since the fund in question holds corporate bonds, we need to start with interest rates.

It’s not news that since the end of the pandemic, the Federal Reserve has focused on fighting inflation. Whether or not it’s brought enough firepower to that fight is something we can debate, but the end result is that borrowing costs have been going up.… Read more

Let’s break down this cloud of pessimism hanging over the economy. As far as I can tell, it’s mainly coming from two sources:

1. The bond market.
2. The labor market.

Concerns around both are overblown, and that’s been a plus for us at my CEF Insider service. It’s pushed out the discounts to net asset value (NAV) on these funds, setting up some nice buying opportunities over the last few months.

It’s increased the dividend yields on some of these funds, too. In some cases near double digits.

General American Investors (GAM), one of the more popular equity CEFs, tells the tale here.… Read more

Ten-year Treasuries yield 5.3%. We’re still not buying.

Because the truth is, that 5.3% yield is an illusion, for two reasons.

First, inflation is at 3.4%. Knock that off your 5.3% yield and you’re left with a real return of just 1.9%.

And second, if the government continues to print money to meet its obligations (likely!), it could fuel more inflation, and higher bond yields. That increases the likelihood that anyone buying a Treasury today will sell at a loss if they do so before maturity.

So where does an income investor turn?

Two words: US stocks.

Trouble is, the S&P 500 yields a mere 1%.… Read more

Joblessness rose last month. And stocks jumped on the news.

It’s weird. And it’s giving us a rare chance to pick up a well-funded 6.8% dividend for 12.3% off its “regular” price.

This deal exists because the fund behind that healthy payout—a tech-focused closed-end fund (CEF) called the BlackRock Technology and Private Equity Term Trust (BTX)—is smack in the middle of a very profitable setup.

That is, both its price on the stock market (in purple below) and the value of its underlying portfolio (its net asset value, or NAV, in orange) are soaring this year:

BTX Skyrockets in 2026 …

The fact that both the portfolio and market price can move independently of each other is a unique feature of CEFs.… Read more