Author Archive: Michael Foster

Don’t fall into the trap of thinking you can’t beat the market. It’s total nonsense—and that goes double if you look outside stocks, to other assets.

Consider preferred stocks for example—they’re “bond-stock” hybrids that trade on an exchange, like stocks. But like bonds, they trade around a par value.

The best part is the income. Our favorite way to buy preferreds—through actively managed (we’ll come back to that in a second) closed-end funds (CEFs)—gets us yields of 7%+.

And select preferred-stock CEFs trade below their net asset value (NAV, or the value of their portfolios) today—with some of those discounts reaching well into double-digits.… Read more

One of the worst investing mistakes you can make is blindly sticking to “rules of thumb” given out by so-called “experts.”

That goes double when you use these overly broad guidelines for the most important decision you can make: planning for your financial future.

Consider a recent article by Bankrate telling retirees to follow the “rule of 25,” which is as simple as it is deceptive. This piece tells us that you “should have 25 times the annual amount you plan to spend in retirement saved before you leave the workforce.”

That’s a lot of money! Take a look at the table below to match up how much you plan to spend in retirement (to make things easier, we’ll set inflation aside and use today’s dollars) with how much you’d need to save.… Read more

Remember a decade or so back, when we heard over and over again that the coming decades would be all about China?

If you ignored that prediction and stuck with well-established US investments (especially dividend-paying US stocks and funds), you made a smart move. (We’ve done the same since we launched our CEF Insider service back in 2017.)

Our conviction continues to be that the USA is the best place to find top dividend payers—including our favorite high-yielding closed-end funds (CEFs).

I’ll give you 16 such US-focused CEFs to consider in a moment—as well as specific looks at two 17%+ (!)… Read more

You probably know the Don Henley song “Dirty Laundry.” It was one of my favorite tunes in the 1980s. A criticism of media sensationalism, the repetitive chorus rang in my ears when I was much younger than I am today:

“Kick ’em when they’re up,
Kick ’em when they’re down.”

This aptly describes the nightly news of the 1980s and the financial press of the 2020s.

In early 2022, for example, Business Insider kicked tech stocks as they were going down: “Rising interest rates and expectations of strong economic growth and inflation are all key factors in the sell-off” the site wrote then, mixing up the good (“strong economic growth”) with the bad (“inflation”).… Read more

I first saw a spaghetti western last year and am still kicking myself for not watching one sooner—A Fistful of Dollars is a masterpiece.

I’m reminded of the movie’s title because a fistful of dollars is what a lot of investors got from the so-called “Magnificent Seven”—namely Alphabet (GOOGL), Amazon.com (AMZN), Apple (AAPL), Meta Platforms (META), Microsoft (MSFT), NVIDIA Corp. (NVDA) and Tesla (TSLA)—last year.

These tech wonderkids were, of course, on a tear in 2023, jumping 75% on average and providing the bulk of the market’s gain.

The reason for that is pretty clear: artificial intelligence, which burst onto the public consciousness with the release of ChatGPT in November 2022.… Read more

Worried stocks are going to crash after breaking fresh all-time highs?

Well, let me allay those concerns with not one, not two, but … six trillion reasons why that fate—pushed more and more in the media these days—is far from inevitable (or even likely).

That six trillion number is the hoard parked in money-market funds: those “as-good-as-cash” options for people who don’t really want to grow their money but want to keep it “safe” and have access to it.

The 2022 sell-off and rapid rise in interest rates in 2023 caused money-market balances to soar, doubling from where they were just five years ago—a far bigger increase than the historical trend.… Read more

These days, I’m seeing something I’ve frankly never seen before in the markets: a lot of people questioning so-called investment “truths” they thought were frankly unmovable.

Most people’s natural instinct is to withdraw in times like these, but that would be a mistake in this case, especially for closed-end fund (CEF) investors, as it may result in funds that seem to always trade at a discount suddenly seeing those “eternal” sales come to a swift end.

I know that’s quite a bit to unpack, so let’s start with the skepticism that seems to be rolling through the markets today, starting with the S&P 500’s new—and long-awaited—all-time high.… Read more

Today we’re going to dive into three funds that, put together, could hold nothing less than the key to financial freedom.

I know that sounds like a bold claim, but it’s tough to argue when you’ve got a three-fund “mini-portfolio” that does all of the following:

1. Pays a 12%+ yield that’s sustainable over the long term.
2. Pays dividends monthly, making it even easier (and more convenient) for these funds to completely replace your salary.
3. Offers a discount today, providing an opportunity for capital gains tomorrow.

Here’s how the numbers work out on this three-fund setup, consisting entirely of a special kind of fund called a closed-end fund (CEF): a 12% yield means you’re getting $100 per month for every $10,000 you invest.… Read more

Don’t buy into the fear around office real estate investment trusts (REITs). Truth is, this is our moment to buy strong REIT dividends. We’re going to do it with a well-diversified 11.4%-yielding closed-end fund (CEF) trading at a ridiculous bargain.

Our opportunity lies in the fact that the fear around office landlords (Will the work-from-home crowd ever return? Will lease rates plummet? Is any of that priced in?) completely misses the point for investors.

Negativity Around Office REITs Has Been Off the Charts

To get a sense of the scale of fear around office REITs, consider that Fortune magazine, despite its staid reputation, told us nine months ago that the “office real estate apocalypse” was here and “even worse than expected.”… Read more

Here’s the thing about high-yield closed-end funds (CEFs): sometimes a CEF will seem to have all the earmarks of a terrific investment: high (and monthly) dividends, reasonable fees and reputable management. But it’ll still come up short.

We, of course, love CEFs and see them as the critical pieces of our income portfolios. The portfolio of my CEF Insider service, for example, holds plenty of top-quality buys and yields 9% as I write this.

But when picking these funds, we need to make sure we don’t let a big name, high yield or so-called “low” fees dominate our thinking. We also need to look deeper, at factors like past performance and even management’s track record with its other funds.… Read more