Author Archive: Michael Foster

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

It’s as predictable as night following day: Stock markets crash, and we almost immediately hear more about the so-called “60/40 rule” as a way for investors to protect themselves.

Don’t fall for this overdone “rule of thumb” (which, as the name says, recommends putting 60% of your portfolio into stocks and 40% into bonds).

Today we’re going to look at a much better way—one that pays you 9.7% dividends and delivers far better performance, too.

2025 Is 2022 Redux for the 60/40 Crowd

Today’s setup reminds me of what I heard near the end of 2022, when stocks were crashing. Back then, many advisors were dredging up this old idea to help ease worried investors’ fears.… Read more

On one front, this tariff pandemonium changes nothing for us: We still see our favorite high-yield investments—8%+ paying closed-end funds (CEFs)—as the best choice to anchor your retirement portfolio.

In fact, times like this add to their appeal even more.

That’s because, in a crash, we CEF investors don’t have to sell a single unit of our funds to get the cash we need to fund our lives. Our big dividends—many of which roll in monthly—take care of our needs for us.

Then there’s CEFs’ discounts to net asset value (NAV, or the value of their underlying portfolios). This unique-to-CEF measure tells us when a fund is cheap or pricey.… Read more

In the run-up to the reversal of many of President Trump’s tariffs, we saw some true panic selling that turned into what can only be called panic buying: Investors eager to get back in as they realized the selloff was a buying opportunity.

And to no one’s surprise, tariff-related market drama has continued since then.

Last Wednesday’s bounce happened so fast I couldn’t get my response to the selloff published in time. Earlier last week I wrote, “Fortunately, this situation will not last forever. Stocks will ultimately recover their losses from this last week.” Then stocks did recover before those words could get published!… Read more

The pullback we’ve seen in the last week calls to mind the last big selloff we saw—in 2022.

That’s what I want to draw your attention to today (but only for a moment!). Because the 2022 experience still has a lot to tell us about how markets really view the possibility of a recession. Along with that, a quick look back can also help us develop our strategy for investing in 8%+ yielding closed-end funds (CEFs) from here.

Back then, the fear was that a combination of inflation and recession would cause stocks to plunge. And plunge they did. In fact, the market gave up on everything.… Read more

I often talk about high-yielding closed-end funds (CEFs) that are great buys because, well, there are plenty of CEFs that are. Yes, even in unprecedented times like these!

That’s because the best CEFs offer three things we love:

• Big dividends, with an average yield of 7.8% across the asset class.

• Bargain valuations, with average discounts to net asset value (NAV, or the value of a CEF’s underlying portfolio) of 5%.
  
  And how’s this for a stat …

• Proven performance, with 94% of CEFs posting positive returns (with dividends reinvested) over the last decade. Ninety. Four. Percent.

Still, every once in a while, a CEF comes across my desk that’s an obvious one to sell (or avoid if you don’t already hold it).… Read more