Author Archive: Michael Foster

Closed-end funds (CEFs) yield around 8% today—and that’s on average. Plenty yield more—and deliver their payouts safely, predictably and often monthly, too.

Members of my CEF Insider service know this. As I write this, our portfolio yields a high 8.8% on average, even as many of our funds’ prices have risen with this year’s strong market. And 12 of our current 21 holdings pay us every month.

All that said, we also know the old adage that something that seems too good to be true usually is. That also applies to CEF yields, especially when we spot a vastly overinflated one (24.6%, say).… Read more

Stocks are up, and the media is finally coming around to what we’ve been saying at my CEF Insider service for months now.

Last week, The Economist wrote a breathless piece about how the US economy is firing on all cylinders—and fears that a recession will sideswipe stocks are just plain wrong.

We’re happy to see a leading publication like The Economist come around on this point, of course. Even better, we now we have the data to prove it:

Across the board, the S&P 500 saw a 27.7% earnings gain in the first quarter. That’s shocking when, historically, profits have risen in the 5% to 8% range.… Read more

If you ask the average investor what, say, an ETF is, you’ll likely get a good answer. A closed-end fund (CEF)? Likely a blank stare.

That’s because CEFs are a tiny corner of the market, with only about $300 billion in assets among them. ETFs? About $13.5 trillion. The scale is way out of whack here.

At CEF Insider, of course, we like it this way. It’s why “Insider” is in the service’s title.

Since CEFs are obscure, we can easily find overlooked ones trading at big discounts to net asset value (NAV, or the value of their underlying portfolios).… Read more

Investors are flipping back into buy mode, which has been a boon to the equity funds we hold at my CEF Insider service—especially on the tech side.

Our position in the BlackRock Technology and Private Equity Term Trust (BTX) is a good example. We bought this closed-end fund (CEF) in late February—the day before the Iran conflict started—and it’s already returned around 25% for us as of this writing.

BTX Pops On Our Latest Recommendation

This monthly payer has only issued one dividend in that time! When we bought, it yielded around 9.5%. That’s down to 7.7%, as current yields move down as prices rise.… Read more

There’s a big disconnect between the headlines and vanilla investors’ mood these days.

The headlines? Dark. Investors? Greedy.

Source: CNN

The CNN Fear & Greed Index has its flaws, but on the whole is a decent indicator of where investors’ heads are. As we can see here, despite the Iran conflict, they’re giddy.

At times like these, it pays for us contrarians to be cautious.

For us closed-end fund (CEF) investors, however, this isn’t a big concern. The funds in our CEF Insider portfolio (21 in all, with an average current yield of 7.9%) are run by pros we can count on to navigate overly exuberant times like this.… Read more

This has got to be the most “hidden” (maybe hated?) stock-market run I’ve ever seen.

The headlines are all doom and gloom (I think you’ll agree), but behind it all, the stock market is on a roll—returning 31% in just the last year. That’s more than triple the market’s long-term average yearly return of around 10%.

Where does that leave those of us who look to stocks for growth and income? Is there more runway ahead, or is it too late to buy in?

In my opinion, this 31% gain is setting the table for more, and we’ll get into exactly why in a moment.… Read more

The time has come to make a move on this software-stock selloff. And we’re going to use our favorite income plays—closed-end funds (CEFs)—to do it.

That’s because the story here—that AI is going to harm the sector, cost jobs and hurt the economy as a whole—is the opposite of what’s really happening on the ground. And we’ve finally got some reliable data to prove it.

A CEF that’s well-positioned to tap this disconnect is a 7.8%-payer called the BlackRock Science and Technology Term Trust (BSTZ).

It’s a name we’ve long held in our CEF Insider portfolio, and it’s in a “sweet spot” here.… Read more

Hands down, one of the biggest retirement risks I’ve come across is when investors try to play it safe.

That’s because, in hiding out from volatility, they stunt their returns and end up locked into the workforce for years longer than they need to be.

Worst thing is, many of these “safe” options sport high yields that never deliver in reality. Consider a savings account:

Source: Forbes Advisor

To be sure, the highest rates can look appealing, like the 5.8% here. But in reality, larger balances earn closer to 3.9%.

You can do a little better with a 30-year Treasury, which yields around 4.9% now.… Read more

The year isn’t even four months old, and we’ve already been hit with three events that would normally send markets tumbling:

• The Iran conflict.
• The hit to software stocks, after AI raised concerns about their business model.
• The private-credit collapse.

We’re going to zero in on that third point today, because while the Iran situation is an ongoing tragedy, it will be resolved at some point. When it does, the relief rally will likely be significant.

The software story is similar. Over time, I see these stocks as winners in the AI race, not victims.

But the private-credit tale is different, because what it’s actually telling us about the economy—that it’s stable and growing—is the exact opposite of what most people think it’s saying.… Read more

Wall Street and the press have it all wrong on the US economy. Here’s the truth:

It’s stable—and growing.

I know. Boring, right? Maybe to most people. But not to us!

The narrative put forth by the press and punditry—that inequality is rampant and getting worse—lends itself to much more compelling headlines (which is why we’re not hearing much about it).

Worries around this inequality—namely that it will cause more political instability and pile risk on to the economy as a whole—are part of what’s been weighing on stocks lately. That and concerns about the Iran War, the direction of interest rates, unpredictable trade policy and others (it’s a long list!).… Read more