Author Archive: Michael Foster

Plenty of investors miss out on the huge yields (often north of 8%) that closed-end funds (CEFs) offer. There’s one simple reason why: They get way too hung up on management fees.

We’re going to look at a few reasons why that is today—and one easy way you can make those fees disappear entirely.

But first, just how high are the fees we’re talking about? Well, the average fee for all CEFs tracked by my CEF Insider service is 2.95% of assets. In contrast, the largest ETF on the planet, the SPDR S&P 500 ETF Trust (SPY), has a fee of just 0.09%.… Read more

Let me start with a prediction: the S&P 500 will gain about 5% this year—not great, but not bad, either.

This isn’t really a Nostradamus-level call: I’m simply annualizing the gain the market has posted so far in 2025, as of this writing.

We can think of this year as the middle stage of the business cycle—where inflation is cooling, the labor market is softening, and consumer spending is starting to slow (emphasis on starting to).

In other words, it’s the perfect setup for us to make sure we’re well diversified by looking at assets beyond stocks. At the top of our list?… Read more

Can we still call ourselves contrarians if we buy into “mainstream” trends like the stunning growth of AI? Of course we can.

Today we’re going to do just that. But of course we’re not picking up obvious names like NVIDIA (NVDA). Instead we’re looking to an 8%-paying fund I see having even more upside than the “go-to” AI stocks everyone else is buying.

For Profitable Contrarian Investing, Think “Oblique,” Not “Direct”

The technique we’re going to use here is a very underappreciated concept called “oblique investing.”

Sounds a bit dry, I know, but it’s anything but. The idea here is, roughly speaking, to invest in big forces driving the market and shifting the economy over the foreseeable future.… Read more

About a month ago, Mike Bird, the Wall Street editor for The Economist, tweeted (or “X-ed,” I guess I should say) the following: “You have to concede that there would be a form of stupid, ridiculous beauty in the S&P 500 closing completely flat for April.”

And, well, after all the drama we saw in April, that’s pretty much where we landed.

A Wild—But in the End, Sideways—April for Stocks

I once met Mike for coffee, and he’s a friendly, intelligent person, so it’s easy for me to agree with him here: Yes, the market behaved stupidly in April, starting with the tariff selloff and ending with the first hints of a deal with China (with various back-and-forth moves on tariffs in between).… Read more

I get it: For many people, the rough start to 2025 conjures (painful!) memories of 2022.

It’s an easy comparison to make. But we must resist doing so. Because unlike in 2022, today’s volatility is caused by panic alone. That’s the kind of situation we contrarians love!

Nonetheless, I get it if you still want to be cautious. With that in mind, I’ve got a fund that gives us full market exposure with a key “hedge”—and a growing 8.1% dividend, too.

But I’m getting ahead of myself. Let’s first talk about what’s causing this “Chicken Littleism” in the first place.… Read more

Can you and I beat the legendary returns of Warren Buffett? Absolutely. What’s more, we can do it while “translating” a slice of our gains into a big income stream (with special dividends on the table, too).

I’ll show you how in a moment.

First, we need to talk about how the 94-year-old Oracle of Omaha, who is now stepping back from the position of president and CEO of Berkshire Hathaway (BRK.A), has changed the course of investing over the years.

Every year, as you likely know, Buffett releases a simple letter to investors showing what’s happened with Berkshire’s portfolio.… Read more

We just saw the first real signs that the “vibecession” is becoming something more—and this is our cue to pluck from our portfolios (or avoid adding!) three funds that are way into bubble territory. (Names and tickers below.)

Let’s start with that slowdown signal.

In this chart, from Apollo Global Management, we see that the total number of Americans who are only making the minimum payments on their credit cards is at its highest level in over a decade. This tells us that inflation and a slowdown in the job market are putting direct (and increasing) pressure on household budgets.

There are other signs, too.… Read more

Are US stocks set to lose out to the rest of the world forever? That’s what the press would have us believe. But we contrarian dividend investors are looking at this from a different angle.

Our strategy? Buy America when the rest of the world is selling.

It’s worked before, and we have every reason to believe it will work now, too. So let’s talk about it—and the best way to position ourselves for US stocks’ next leg up, with a healthy dividend payout on the side.

Press Panics, US Stocks Bounce

It’s funny, but not surprising, that the moment “sell America” became a headline earlier this year, US stocks started to recover.… Read more

At my CEF Insider service, we focus on the long term, picking up closed-end funds that give us the capital we need to grow our wealth, plus the high income (I’m talking 8%+ yields here) we need to gain—and keep!—our financial freedom.

That said, there’s no denying that one particular investment (that’s known for neither income nor long-term wealth building!) is getting a lot of attention these days: gold.

So let’s talk about the yellow metal and why we’ve avoided it at CEF Insider, despite its recent rise. We’ll also look at a closed-end fund (CEF) that looks like a good play on gold but is, in fact, far from it.… Read more

Sometimes there’s a dividend play out there that we love—but it’s just the wrong time to buy it.

That’s the story with an 11.6%-paying closed-end fund (CEF) that’s pretty well-known (for a CEF, that is!). It’s the Gabelli Equity Trust (GAB), run by Mario Gabelli, whom you may have seen on the cable news channels over the years.

To get at why we’re dodging this well-run fund now, we need to first talk about a phrase you may have heard a lot more from said business channels lately: “soft data.”

Ring a bell? Basically it refers to numbers that are more about feelings (or “vibes” as the kids call them these days) that people have about the economy: surveys of consumers and companies, expectations of economic conditions in the future, that sort of thing.… Read more