Author Archive: Michael Foster

I’ve been covering closed-end funds (CEFs) for more than a decade. Through that time (and still today!) I’ve been shocked at how many people sleepwalk right past these incredible income plays, and the big dividends (and upside) they offer.

CEFs are publicly traded and highly regulated, like mutual funds or ETFs. The key difference? Big dividends! The 500 or so CEFs out there yield 8.4% on average, and they’ve historically have yielded 7%+.

They work by investing in the kinds of assets most of us own already—stocks, bonds and real estate mostly. They then hand out the resulting profits as dividends.… Read more

At my CEF Insider service, we started 2024 expecting stocks to rise about 10% to 15% this year. Well, we’re well within that range now: the S&P 500 is up just under 14% in 2024, as of this writing.

And it’s only June! Which means that while stocks can keep going higher, we’ll likely see more dips as the market catches its breath.

We’ll use those dips to pick up our favorite 8%+ yielding closed-end funds (CEFs), of course. But we don’t have to wait around for our next dip-buying opportunity—I’ve got three bargain-priced bond funds for you to consider now, yielding up to 12.5%.… Read more

You probably remember the first time you heard about ChatGPT. The AI tool’s lifelike responses seemed like magic—so much so that people were debating whether generative AI tools like it were actually conscious.

Such a debate was honestly a bit silly, and it didn’t last long. But the idea that these large-language models were sentient proved how much AI can emotionally influence people.

Fast-forward to today and that response is much less starry-eyed. You’ve no doubt run across AI-created content and art on the Internet that is, frankly, terrible (not to mention glaringly obvious). That’s prompted outlets like The Wall Street Journal to tell us “The AI revolution is already losing steam” and compare the industry to the “biggest crashes of the first dot-com bubble.”… Read more

You may have noticed that since the pandemic, there’s been a somewhat perverse desire to make the economy look worse than it is.

Whether it’s concerns about a looming recession—the so-called “vibecession” we talked about last week—or worries that life is getting too expensive because of inflation, there’s a growing bias toward doom-and-gloom.

Plus, pessimistic people tend to sound serious—and for many pundits, parroting these arguments is easier than actually analyzing data.

At CEF Insider, we remain 100% data-driven, for the simple reason that it’s profitable. After all, the doom-and-gloom was at a fever pitch in late 2022, and we all know how stocks have done since.… Read more

I’ve been covering CEFs for about a decade, and I’ve never seen them get as much attention as they are right now.

And it’s only the beginning.

We talked about the much-brighter spotlight on our favorite income plays in the November issue of my CEF Insider service. Back then, we noted that big institutional investors (including the particularly aggressive folks at Saba Capital Management) were starting to pressure CEFs to change or shut down.

Shuttering a fund may sound dramatic, but the key thing to bear in mind here is that doing so can result in an immediate gain for investors.… Read more

The word “vibecession”—basically the idea that people are measuring the economy by feeling rather than by data—is back in the news. That’s because most Americans apparently think we’re in a recession, even though we aren’t.

It is, frankly, annoying to those of us who make our decisions on the data alone. But, as they say, it is what it is. So we’re going to go ahead and profit from it! Our tool of choice is a closed-end fund (CEF) that does something no ETF or regular stock could ever do: It “translates” our gains on US stocks into dividends.

The dangerous thing about a “vibecession” is that it’s easy to make mistakes as the media pushes a fear-based narrative.… Read more

If you’re like me, you read (or watch) a lot of personal-finance gurus. And nearly all of them make one critical error when giving advice to folks hoping to save for retirement (or stay retired, if they’re already there).

They put a lot of emphasis on cutting costs—we hear quite a bit about how we should limit small things like your streaming services, for example! Of course, most retirees (save for the very wealthy ones) will tell you that keeping costs reasonable is important.

But what I don’t hear enough from these “gurus” is how to find the high-quality income investments we need to get into retirement faster—and stay there once we arrive.… Read more

It’s finally happening: Management fees on our favorite 8%+ paying assets—closed-end funds (CEFs)—are falling. And some are sending their already soaring dividends even higher, too.

Those are key reasons to invest in these high-yield plays now. We’ll get into all the details below. But before we do, it’s important that we take a second to put CEF fees in perspective. That’s because many (most?) investors have a totally incorrect idea about them. And it’s caused them to miss out on the income (and growth) CEFs offer.

Ignore the Wall Street Line: CEF Fees Are Sometimes Worth Paying

When I ask investors if they’ve ever considered CEFs, those who say no often mention high fees as a reason.… Read more

Every now and then here at Contrarian Outlook, we have a “big-dividend shootout”—we pit two big payers against each other and see which one wins out.

It’s a great way for us to accomplish two things as investors: 1) Grab the safest high dividends with the most upside, and 2) Sharpen our portfolio-building skills.

My beat is closed-end funds (CEFs), which are known for huge (and often monthly paid) dividends. These actively managed funds are a bit of a unique challenge to analyze because they each hold a lot of assets—often numbering in the hundreds.

Luckily there are a few indicators we can use to single out the best ones.… Read more

A couple weeks ago, on May 3, BlackRock, the world’s largest investment firm, did something that will send a shockwave through our favorite high-yield investments: closed-end funds (CEFs).

The result is likely to be higher prices for CEF investors in the future—and even steadier dividends, too. Most folks missed this change, but it’s only a matter of time until it makes itself known. We’re already seeing it kick in with some of these high-paying funds.

Before we go further, let’s be clear on what we’re talking about: The $400-billion universe of CEFs currently yields an eye-popping 8.2% on average.

How is that possible?… Read more