Author Archive: Michael Foster

Near the end of 2022, a reader wrote in to tell me that my bullish view of the economy at the time was off the mark. From his vantage point, people were struggling, prices were soaring, and wages weren’t keeping up.

This reader wasn’t alone—it was around that time that Bloomberg wrote that the chances of a recession in the next year were 100%. So there was zero chance of avoiding one, in other words.

We all know what happened next: The economy and stock market took off. That translated into real gains (and high income) for the portfolio of my CEF Insider service.… Read more

$20 trillion.

That’s how much value has been added to the US housing market in the last five years. It’s a number so big it’s near-impossible to get your head around. And it’s a double-edged sword.

On the one hand, if you own a house, that house is worth more, and you’re richer as a result. But if you don’t, buying is expensive and comes with a higher risk of a price drop. That’s because this $20-trillion gain is a 57% increase since 2020, or 9.5% per year.

That is, simply put, unsustainable.

Which is why, today, we’re going to look at a way to hedge against this risk and collect an 8.4% dividend as you do.… Read more

At CEF Insider, we live for those times when a bad news story turns up a great dividend opportunity. And the headlines just served one up, putting a 12%+ dividend (in a hated sector, no less) on the table.

This special situation is intriguing because no one in America is talking about it. That’s because it comes from across the pond, in the UK. Specifically, I’m talking about one of the UK’s biggest insurers, Phoenix Group, pulling £22 billion (US$30 billion) from asset manager Aberdeen Group plc (SLFPY), reportedly to manage these funds in-house.

Aberdeen’s name might ring a bell if you’re a CEF Insider member, as we’ve held the firm’s funds in the past.… Read more

We’ve got a frankly, bizarre dynamic setting up in stocks right now.

Global stocks are clobbering their American cousins this year. But here’s the disconnect: This is happening even though US stocks are hitting all-time highs seemingly every day.

On the surface, it sounds like both of these can’t be true. But as we’ll see below, this setup makes total sense. We’ll also look at how we can play it for both offense—price upside, in other words—and defense (in the form of 8%+ dividends), too.

USA, USA, US … Wait a Minute …

Here we’re looking at the S&P 500, as measured by the SPDR S&P 500 ETF (SPY), in purple, compared to the Vanguard FTSE All-World Ex-US Index Fund (VEU), a good benchmark for global stocks (minus the US, as the name says), in orange.… Read more

We all know that stocks can rise on nothing but hype for long periods. But at the end of the day, it all comes back to one thing: profits! If they don’t rise, the stock will tank. It’s just a matter of time.

Consider the case of Peloton Interactive (PTON).

Pandemic Ends, Peloton Crashes

When the pandemic had everyone exercising indoors, speculators piled into the stock, hoping that soaring earnings would ignite the company’s value.

Peloton’s net income was deep in the red then. Fast-forward to today, and it’s still negative. The stock has, of course, dropped to reflect that.… Read more

If anything taught me that buying real estate through stocks—or better yet high-yielding closed-end funds (CEFs)—is way better than brick-and-mortar, it was my experience renting my Manhattan apartment on Airbnb (ABNB).

If you’re reading this, you might feel the same way. Maybe you’ve had the same experience as the one I’m about to share.

It was about a decade ago, and it was, in short, a nightmare. It seemed like every time I turned around, there was a complaint that the place was too small, or someone had posted a bad review. Or I was staring down a pile of clean-up in the wake of careless renters.… Read more

A market on a precipice.

That’s the vibe around stocks right now, and I’m guessing you’ve felt it, too. On the one hand, the S&P 500 is up 14% in the past year, a very solid performance (and for the record, I see more gains ahead).

Yet volatility has returned, and it feels like we could be on the verge of another selloff. So what do we do right now?

We’re going to look at a closed-end fund (CEF) that profits from short-term volatility. In fact, this one harnesses the energy that choppy markets throw off and “converts” it to a hefty dividend stream.… Read more

Large cap stocks have been crushing small caps in the last few years. That’s, well, unusual, to say the least. And it’s set us up for cheap 7.2% dividends (with upside).

Small Caps Take a Detour

Small caps, of course, aren’t known for big dividends. The benchmark ETF for them, the iShares Russell 2000 ETF (IWM)—in orange above—only pays 1.1%. But stick with me for a moment and I’ll show you how we’re going to pull this off.

Mega-Caps Steal the Spotlight, Setting Up Small-Cap Bargains

Around the time of the pandemic, small caps started lagging the S&P 500 after years of tracking it.… Read more

I’m sure you’ve noticed that the media has been fretting about a selloff in the last few weeks. But the S&P 500 is still up a lot on the year.

Even so, there is cause for concern about overvaluation, as the market’s current gain is equal to a whole year’s worth of historical returns, on average. But the softness we’ve seen lately, combined with the deep April selloff, do suggest that while stock valuations are high, we’re not in a bubble—at least not yet.

Which brings me to our beat at my CEF Insider service—closed-end funds (CEFs), many of which yield 8%+.… Read more

Look, we all know US companies are raking in big profits—despite worries about a slowing economy.

The thing is, when it comes to sharing those huge profits with us as dividends, these firms are remarkably stingy: The typical S&P 500 stock yields just over 1% today! So we’re going to change that (at least for ourselves) by tapping into these firms’ earnings through high-yield closed-end funds (CEFs).

The two CEFs I’m about to show you yield 9.7% on average between them. So every $10,000 invested turns into $81 per month in income. A million dollars invested in these two funds gets you a whopping $97,000 annual income stream.… Read more