Author Archive: Michael Foster

People often don’t believe me when I tell them there are great funds out there paying sustainable 8%+ dividends—it just sounds too good to be true.

But there are literally hundreds out there that pay that much and way more, including the 9.6%-yielding Liberty All-Star Equity Fund (USA). Beyond having the best ticker out there, this one just hiked its payout even higher (by 6.7%, to be precise). The move came as no surprise to anyone already in the know about this smartly run closed-end fund (CEF). 

USA (in purple below) has a terrific track record, too, soundly beating the S&P 500, shown below by the performance of the benchmark Vanguard S&P 500 ETF (VOO), in orange, over the last decade.… Read more

One of the most difficult things for me in 2022 was that, with all the doom and gloom in the air, I heard about a lot of people giving up on the dream of financial independence.

The worst part was that they were doing so at exactly the wrong time—right when the market decline had driven the yields on our favorite closed-end funds (CEFs) way up. Even now, after the S&P 500 has posted roughly 15% gains in 2023, as of this writing, plenty of CEFs yield 10%+, including nine in the portfolio of our CEF Insider service.

Worse, these folks were doing it because they’d bought into the media’s false narrative that a recession was looming, a trap I regularly warned about falling into here on Contrarian Outlook and in the pages of CEF Insider.… Read more

One of the most accurate indicators out there is telling us a recession is ahead. And—odd as it sounds—that warning is bringing us a chance to buy a 6.9%-paying fund with two key advantages:

1. This fund—a closed-end fund (CEF), to be precise, generates extra income when the bull takes a breather, making its 6.9% payout even safer, and …
2. It’s cheap, in relative terms, and will likely be in higher demand as a recession nears.

That fund, the Nuveen NASDAQ 100 Dynamic Overwrite Fund (QQQX) is at the center of our strategy today because of something that sounds obscure but should be on every investor’s radar: the yield spread between 3-month and 10-year Treasury notes is negative—meaning the yield on the 3-month is higher than that of the 10-year.… Read more

Here’s some great news as we head into the summer market doldrums: we’ve got a terrific setup to buy, with stocks rallying, economic data strong—and the S&P 500 (and many high-yielding closed end funds) still cheap.

These bargains exist because of the media’s constant bleating about a recession. But that, of course, has been completely wrong—and I expect it will continue to be.

The key takeaway is that our buying opportunity in CEFs is as strong as it’s been since this rally started in January—which is why five of the six CEFs in the equity section of our CEF Insider portfolio, which boasts an 8.8% average yield as I write this, are buys.… Read more

TV personality Suze Orman has bad news for anyone hoping to escape the rat race: they’ll probably have to wait until they’re over 70.

In a recent interview, the host of the Suze Orman Show splashed cold water on the idea that anyone can enjoy their golden years without clocking in at the office. “Stop this ‘Oh, I’m going to retire at 60. I’m going to start claiming Social Security at 62!’” she proclaimed to viewers.

The reason Orman is adamant most people don’t have enough money to retire, and won’t until they’ve hit 70? She says the 4% rule—a cornerstone of retirement planning for decades—is “dangerous,” and no one should “be using the 4% rule on any level.”… Read more

There’s a “secret” floating around no economist or pundit wants to admit: all the usual measures of predicting the economy’s direction are broken.

That’s ushered in a shift from the old ways of forecasting (which were never that great, to be honest) to the new—and set up a “one-time-only” sale on the best 8%+ yielding closed-end funds (CEFs) out there.

Buying CEFs—which are renowned for their huge (and often monthly) dividend payouts during this “window” is smart for anyone looking to set themselves up for 8%+ payouts for decades to come. We’ll look at one specific fund yielding 8.2% and trading for a bargain 14% below its “true” value in a moment.… Read more

Stop me if you’ve heard this one: “If you buy a high-yielding investment, your big yield won’t last because they’ll cut dividends.”

I hear it a lot, so let’s talk about two funds that haven’t cut distributions in the last decade. In fact, these closed-end funds (CEFs), yielding 9% and 10%, respectively, have done the opposite, growing payouts and dropping special dividends, too!

High-Yield CEF No. 1: A “One-Click” Way to Get a Growing 9% Payout From Tech

One of my favorite CEFs comes from the biggest fund manager on earth: BlackRock, with more than $10 trillion of assets under management.… Read more

We’re halfway through 2023, and many closed-end funds (CEFs) have ridden this year’s market updraft while delivering huge dividends to members of my CEF Insider service.

Yet we contrarian income seekers are still in a strong position, as traditionally slow-moving CEF buyers tiptoe back into the market, giving us extra time to pick up our favorite CEFs at deep discounts to net asset value (NAV).

In the June issue of CEF Insider, which will be released tomorrow, we’re going to discuss specific portfolio picks that are best positioned to profit from the trends I see unfolding over the rest of the year.… Read more

Forget the latest blather from the Fed: folks just trying to get a decent income stream are still getting a raw deal these days. Treasuries pay 3.7%. Stocks? Just 1.6%.

Too bad inflation is at 4%, so our real returns are negative on both!

Sure, stocks do give us price upside, but we have to sell to get a decent income stream, shriveling our portfolio and our dividends as we do.

We can do better with high-yielding closed-end funds (CEFs). These days, plenty of CEFs yield 10%+. The three we’ll cover below do even better, yielding 11.1% on average. That means these CEFs are beating the S&P 500’s historical return in dividends alone.… Read more

Bill Gross is one of the great characters in the investment world: flamboyant, bold—and generally disliked by those who worked for him.

But his PIMCO Total Return Fund saw over 9% annualized returns in its first decade, despite being a supposedly “boring” bond fund.

Those gains made Gross one of the most powerful people on Wall Street—so much so that during the subprime mortgage crisis of 2007 to 2009, the government called on PIMCO to help take care of the toxic assets that had sparked the worst recession in a century.

PIMCO’s Contrarian Subprime Play Paid Off Big

Gross, for his part, did help, thereby helping investors earn even more money.… Read more