Author Archive: Michael Foster

Here’s a surprise from a die-hard closed-end fund (CEF) fan like me: Sometimes CEFs aren’t your best bet.

I’ll admit, that’s tough for me to say—especially when the average CEF yields a historically high 9.1%. (CEF yields are usually around 8.5%). That high yield partly reflects the fact that many CEFs are trading at steep discounts to their net asset value (NAV).

Translation: The fund is trading for less than what its underlying portfolio is worth. That, in turn, has resulted in lower prices among some CEFs, along with higher yields (as yields and prices move in opposite directions).

All of this simply means that CEFs are generally out of favor right now, which is an opportunity for us.… Read more

We’ve got a rare “delayed reaction” income play on our hands right now. Thanks to the April stock-market plunge, we can now pick up 12%+ dividends at attractive discounts. But I don’t expect this opportunity to last very long.

I know early April feels like a while ago, but it created our opportunity, and the chance to buy is still available today. It lies in closed-end funds (CEFs). (I’ll show you three that pay those outsized 12%+ yields in just a second.)

In a nutshell, these three funds trade at discounts to their portfolio values—known as “net asset value,” or NAV, in CEF-speak.… Read more

This latest US debt downgrade is a buying opportunity for us contrarians. I say that because we had the same (profitable) setup the last three times the ratings agencies took Uncle Sam’s credit rating down a peg.

You might find that last sentence surprising. Three times? Indeed, the US government has seen its debt downgraded on three different occasions: 2011, 2023 and most recently a couple of weeks ago.

You can be forgiven for not remembering all of these: In some cases (2023 comes to mind), they didn’t really make headlines. In others, they set up a small dip in stocks (and stock-focused closed-end funds yielding 8%+) that was well worth buying.… Read more

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