Author Archive: Michael Foster

Inflation is up, stocks are soaring (Omicron be damned!) and bargains are thin on the ground.

Well, not all stocks are soaring—one sector has fallen behind, and it’s set us up for some nice “snap back” upside in 2022, with big dividends (yielding up to 7.6%!) on the side. We’ll talk tickers in a moment. First, let’s take a 50,000-foot view of the sector we’re going to dive into and work our way down from there.

That would be real estate, specifically publicly traded real estate investment trusts (REITs), which have been left in the dust in the pandemic- (and Federal Reserve–) powered market of 2020/2021.… Read more

The Omicron variant is here—what does it mean for us dividend investors?

Simple—we’ll simply do the same thing we did the last time COVID spooked markets: buy tech-focused closed-end funds (CEFs) with huge payouts!

Members of my CEF Insider service will remember that we did just that in March 2020, at the trough of the market’s initial pandemic plunge, buying the BlackRock Science & Technology Trust II (BSTZ) when it yielded 7.3% and traded at a 6.6% discount to NAV. We then rode it to a nice 21% total return in just two months!

BSTZ Gave Us a Nice Profit in the First COVID Panic

Our first hint that tech is the right thing to buy now is came in last Friday’s chaos, in which all countries saw their markets dip, but interestingly only the tech-focused NASDAQ 100 (QQQ) fell less than 2%

That’s telling, because if governments around the world institute new shutdowns, the last sector to suffer will be tech.… Read more

Today we’re going to dive into two closed-end funds (CEFs) that have what everyone is on the hunt for these days—massive yields! Both pay more than 8% on average and tempt us with big upside, too, as they’re far cheaper than most other CEFs.

Let’s stop there for a second and talk a bit about CEFs: they’re a small group of funds known for their high yields (averaging around 6.8% across the board currently). They’re like ETFs in that they’re diversified, with each CEF typically buying hundreds of assets within a specific investment strategy.

Unlike ETFs, though, CEFs often trade for less than the actual market value of the assets inside the fund.… Read more

Another day, another sign the first-level crowd is (wrongly!) losing its head over inflation—and yet another opportunity for us to tap those fears for big dividends!

Let’s start with the number the headline-focused crowd can’t move past: 6.2%, which is the jump consumer prices took in October 2021, compared to a year earlier.

Inflation Lurches Higher …

But something strange is going on here—the stock market doesn’t care. While we’ve been hearing about inflation pretty much all year, the S&P 500 still jumped 25% in 2021. That’s because, while the “dumb money” panicked and sold out at various points during the year, the big institutional players—or the “smart money”—stayed long, and indeed bought more.… Read more

I hate to see everyday folks grinding it out with “has-been” dividend payers like AT&T (T) when there are dozens of safe 7%+ yielders out there, many with incredible performance histories, too. 

Trouble is, most people don’t know where to look. But I’ll take you on a personal tour of this overlooked corner of the market (and reveal the ticker of one of the best of these investments, which is throwing off a 10.2% yield as I write this) today.

First, back to Ma Bell: sure, she yields a high 8.4%, but the stock is one of the biggest yield traps on the market!… Read more

I’m hearing from a lot of CEF Insider members who are worried about inflation these days, and there’s a good reason why: consumer prices raced up 6.2% in October from a year ago!

The good news is that we’ve got an easy setup that lets us work inflation fears to our advantage, grabbing ourselves bigger dividends, and bigger price upside, as we do. All we have to do is buy stock-focused closed-end funds (CEFs) on dips when inflation reports come out.

(Below we’ll discuss two CEFs you can target on these dips. They’re built to protect your portfolio—and your dividends!—if inflation proves more than transitory.… Read more

Thinking of joining the “Great Resignation” crowd and dumping your 9-to-5 gig? Let’s talk about how you can do it with outsized 7%+ dividends that easily keep the bills paid.

I’m going to show you the powerful secret some of these “quitters” are using today. It all turns on a unique kind of asset called a closed-end fund (CEF) that’ll be our source for those rock-steady 7%+ dividends (paid monthly, to boot!).

More Investors Discover the Income-Producing Power of CEFs

First off, a funny thing is happening as people dump their day jobs: they’re investing more, with the number of new investors jumping 15% in 2020, and scores of folks who already invest building out their portfolios further.… Read more

I’m guessing you heard about the plunge in Tesla (TSLA) stock spurred by founder Elon Musk’s recent tweet asking if he should sell 10% of his shares.

(The tweet—a poll of Twitter users—garnered a positive response, by the way; Musk says he’ll abide by it.)

I know—another bizarre Musk tweet doesn’t seem to mean much to us income investors. But this one is different, because as hard as it may be to believe, it’s telling us one thing: buy municipal bonds—an asset class many investors dismiss as “sleepy.” That’s not true: there’s a reason why “munis” are favored among billionaires, starting with their huge tax-free dividends.… Read more

There are three funds hiding in plain sight that do something everyone thinks is impossible: pay huge dividends—with yields up to 7.2%—and deliver outsized 24%+ total returns, too.

I know I don’t have to tell you what an inflation-fighting weapon a return like that would be these days.

These are no less than the world’s three best-performing closed-end funds (CEFs) over the long term, and today we’re going to rank them from third to first to see if any (or all!) of them have a place in our investment portfolios.

“World’s Best” CEF #3: 24% Annual Returns for Years and Years

The least impressive CEF on the list, the Columbia Seligman Premium Technology Growth Fund (STK), has “only” a 23.7% annualized return, based on its market price, over the last five years, with a dividend that’s held steady throughout that time (and yields 5.1% today).… Read more

Rising inflation? We closed-end fund (CEF) investors aren’t panicking—we know we can flip rising prices into 7% dividends and 37%+ gains!

Our strategy is simple—pick up CEFs focused on one specific corner of the economy. In fact, if you’re holding a selection of our CEF Insider service’s picks, you’re probably doing this already!

Our Contrarian Income Play Explained

Let’s start with the latest inflation numbers. As measured by the personal consumption expenditures (PCE) index, inflation clocked in at 4.4% on a yearly basis in September, up from 4.2% in August. The story many see behind this is that supply constraints have cut the number of products on store shelves, causing prices to soar.… Read more