Author Archive: Michael Foster

Stock market predictions, of course, are just that—predictions. All of them (including mine!) should be taken with a grain of salt.

I normally prefer to avoid making them. But every now and then I partake because, well, the prediction game is fun! And we do need some kind of forecast to work from when it comes to buying stocks—and our favorite income plays: 8%+ yielding closed-end funds (CEFs).

The key, of course, is knowing when to stick to your forecasts and when to change tack. So as we move past the August 5 correction and toward the final third of 2024, it’s a good time to check in on a couple predictions I made back in January and see how they’re playing out.… Read more

I never thought I’d see the day when “yen carry trade” was splashed across the financial news. But here we are.

We talked about this weird setup, and how it sparked the August 5 market crash, in Monday’s article. Today we’re going to get into what it all means for closed-end funds (CEFs), including the opportunities now available to us in these high yielders.

First up, while the press was quick to paint the correction as a “made in Japan” event, we do have some signs of a slowdown starting to appear in America.

Is This the Recession We’ve Been Waiting For?… Read more

What the heck happened last Monday? I know I don’t have to tell you that the market dropped off a cliff, only to float back higher as the week continued.

The media has been saying that it was all about the latest jobs report in the US, which came out on Friday and simply wasn’t that bad—certainly not the kind of result that deserves the response we saw from stocks.

To put it in perspective, the NASDAQ 100’s fall in a single day was worse than what we saw in the pandemic, when the global economy literally shut down.

Despite the rise in the unemployment rate, joblessness is still relatively low historically speaking, companies are defaulting less than a few months ago (and at historically low levels), and the US economy is set to grow well over 2% this year, after strong growth last year.… Read more

When legendary activist Bill Ackman makes a move, the investment world notices. So when he said he was going to jump into our favorite income plays—8%+ yielding closed-end funds (CEFs)—it certainly got our attention.

We broke it all down in a July 11 article, specifically how Ackman’s latest move—a plan to launch a new CEF with $25 billion in assets under management (making it by far the biggest CEF ever)—was likely to send these funds soaring.

Notice I used the word “was” a number of times just now. That’s because Ackman scrapped the plan just last week.

Ackman’s sudden about-face left many heads spinning in CEF-land.… Read more

In last Thursday’s article, we talked about one of my favorite “low-drama,” high-paying investments—I’m talking 7%+ payouts here.

Those would be covered-call funds, which we look to in times of higher market volatility, which we’ve seen recently and I see as more likely as we move toward year end. At times like these, covered-call funds are a good option, as their option strategy cuts their volatility and boosts their income. Check out that article for our full breakdown of how this works.

Today we’re going to go one step further and delve into how these funds fit into your portfolio. We’ll also talk tickers.… Read more

We’ve seen more choppiness in the markets in the last couple of weeks. That once again highlights why we should—dare I say need to—own one of the lowest-volatility, highest-paying investments I know of.

I’m talking about closed-end funds (CEFs) that sell call options on their portfolios. I know that sounds a bit out there (maybe even risky to some folks!) but it’s anything but. These terrific income plays give us exposure to stocks, like any ETF, but with less volatility and more income!

I mean, really, who doesn’t want that? Let’s dive into our options here.

Covered-Call Funds Give Us Stocks With Less Drama (and High Income)

Imagine a fund that holds all the S&P 500 stocks, but with a twist: This fund gets paid by investors who would love to buy its shares in the future.… Read more

We’re a little more than halfway through the year now, so it’s a great time to check the state of play on our favorite high-yield plays: 8%+ paying closed-end funds (CEFs).

And what a half-year it’s been: CEFs have posted returns far bigger than most people expected back in January! And I see more gains ahead.

Source: CEF Insider

Truth is, the hundreds of CEFs tracked by my CEF Insider service are turning up some fascinating data, especially if we zoom into the CEF Insider Equity Sub-Index (in brown above), which has returned 12% year to date, as of this writing.… Read more

Few people pay much attention to the management team of a closed-end fund (CEF). But it’s becoming a much more critical factor driving CEF upside (and downside!), as well as these funds’ 8%+ dividend payouts.

I was reminded of this recently by a story that’s unfolding in the UK, where two asset-management firms are struggling a bit to hire CEOs. One is Scotland-based abrdn plc (SLFPF), whose shares have risen just 2.6% annually in the US on average over the last decade.

Compare that to a roughly 10% average year-to-date return enjoyed by the other major asset managers abrdn is competing with, and you get a good idea of what’s happening here: abrdn isn’t doing well enough to attract the best talent.… Read more

What if I told you I’ve found a way to get $1,000 in dividends every single month—and you only need to invest $146,364 to get it?

There’s more, too, because this $1,000 monthly income stream comes from:

• Regular stocks: What I’m about to show you is based on stocks you likely hold now. I’m talking blue chips like NVIDIA (NVDA), Microsoft (MSFT) and Walmart (WMT). The key is to buy these stocks through a special vehicle called …

• A closed-end fund (CEF). These ridiculously overlooked funds hold the same assets as ultra-popular ETFs but yield a lot more—8.2% on average.

At my CEF Insider service, we’ve been bullish on corporate bonds (especially corporate bond–focused closed-end funds yielding 8%+) for a long time now.

We remain so, because we’ve got a nice “goldilocks” setup for these funds right now:

1. The US economy, while not booming at a rate that makes everyone happy, has steadily improved since the pandemic, prompting inflation to slow but remain elevated.
2. The Federal Reserve, seeing this, is getting set to lower interest rates in late 2024, or possibly at some point next year.

These are both bullish signs for corporate bonds—and the closed-end funds that hold them. I’m sure I don’t have to tell you they were hit hard in 2022, resulting in an array of bargains.… Read more