Author Archive: Michael Foster

Stocks are pricey, but we closed-end fund (CEF) investors aren’t sweating it: we’ve got an edge that lets us buy at a discount, with dividends that are double—and sometimes triple—the typical S&P 500 payout!

That would be our ability to buy CEFs that trade at discounts to net asset value (NAV, or the value of their underlying portfolios). This simple move lets us “rewind the clock” and essentially buy the stocks our CEFs hold at levels we could a few months ago on the open market.

(And there are many bargain-priced CEFs to be had out there, including one trading at a 10% discount and paying more than double the average stock’s dividend—more on that below.)… Read more

Let’s work this market pullback to grab ourselves a sweet 21% “double discount” on our favorite stocks. We’ll also get a dividend from blue chip firms that don’t even pay one!

The key is an off-the-radar closed-end fund (CEF) holding some of the biggest names on the market and trading at a totally undeserved 17% below its true value. And this one pays a rock-steady 3.1% dividend, too—double what the typical S&P 500 stock yields!

Before we put a name and ticker to this fund, let’s talk about the first part of the 21% double discount we’re going to tap today.… Read more

Most investors are ignoring a clear shot at 7%+ dividends double-digit price gains—year in and year out—in a sector everyone should be talking about, but isn’t.

That would be healthcare, which is riding a rocket of rising spending: according to the latest numbers from the Centers for Medicare & Medicaid Services, US health expenditures will soar 5.4% annually, on average, every year until 2028. (We’ll dive into three funds paying huge dividends up to 8.3% and poised to cash in on this wave in a moment.)

The thing about that 5.4% yearly increase is that it’s much bigger than projected US GDP growth of 4%.… Read more

There’s an unusual shift unfolding in the labor market that we contrarians can tap for outsized dividends (I’m talking a near-10% yield here), plus price upside for years to come.

We’ll do it using a closed-end fund (CEF) that’s tethered itself to a trend everyone has missed—a trend that’s concealed behind a metric called the labor force participation rate, or LFPR.

It may have a boring name, but that doesn’t stop the media from reporting on the LFPR. You’ve likely heard it pop up in the mainstream press from time to time.

It simply refers to the percentage of the population that’s actively working or looking for work.… Read more

Tech stocks have taken a header, and we contrarians are going to take advantage and set ourselves up for some serious upside—and 5.6% dividends, too.

Why are we zeroing in on tech now?

Because investors have been (wrongly) fretting over a 1970s-style inflation flare-up, and they’ve been (wrongly) taking it out on tech stocks over the last few weeks.

In a way, the selloff makes sense, as higher inflation, and the rising interest rates that come with it, cut into tech stocks’ profit growth—and investors look to tech mainly for that exceptional profit growth, which drives their share prices.

(Our favorite income plays, closed-end funds, or CEFs, let us take a different path, getting a big slice of our tech profits as cash dividends that we control, instead of less predictable price gains.… Read more

I know you’ve heard the common Wall Street “wisdom” that, when it comes to investing for the long haul, you’re best to simply put your money in an index fund and call it a day.

Everyone parrots this “advice.” Even Warren Buffett himself!

Today we’re going to dive into why this advice is one of the most effective ways to lose money fast (not to mention a chance at big dividends, like the growing 5% payout we’ll discuss below).

In fact, if the average middle-class person had stuck with a market-based ETF over the last seven years instead of going just one step further and investing in an actively managed closed-end fund (CEF), they would have missed out on over a million dollars’ worth of gains (and dividends).… Read more

Let’s dive into a brand-new CEF many people are ignoring—and see how we can ride it to some fast gains (and a growing 6.4% dividend).

When a new CEF rolls down the skids, our antennae always go up, because getting into a new fund before anyone else picks up on it is one of the most exciting ways to build wealth (and a rich income stream) in CEFs.

That’s because most CEF investors are conservative by nature, and they tend to shun new funds (even those run by some of the best CEF managers in the business). That results in big discounts we can jump on—and ride to quick 10%, 20% or even 30% gains in short order.… Read more

It’s a tired piece of “wisdom” you hear from personal-finance gurus over and over: you need to invest in low-cost, passive index funds to get the highest return.

Too bad it’s completely false!

Today we’re going to look at how obsessing over fees can cost you tens of thousands of dollars. Then I’ll name a fund that could get you big gains and pays a dividend north of 6%.

What’s more, this unusual fund, a closed-end fund (CEF), to be specific, gives you that steady cash payout while holding some of the biggest stocks out there—I’m talking about household names like Apple (AAPL) and Amazon.com… Read more

There’s one word that strikes terror into the hearts of mainstream investors: leverage.

But it really shouldn’t—and today I’m going to show you how to make sure you’re using leverage the right way, while minimizing your risk and tapping into some of the biggest gains (and dividends!) available to us today.

As you probably know, closed-end funds (CEFs) commonly use leverage to amp up their investment returns (and their dividends, which yield 6.5%, on average, as I write this). That’s fed their strong gains this year, as the Federal Reserve has kept interest rates low:

CEFs on a Tear

Source: CEF Insider

The CEF Insider Index Tracker has shown double-digit gains everywhere except in municipal bonds (which is normal, as we buy munis for their stability and tax-free dividends).… Read more

Many folks see dividends as just a source of income. But they’re so much more! The two high-yield buys I’ll show you today, for example, are what I like to call “dividend Swiss Army knives.”

(One of these stealth funds pays an unheard-of 9.4% payout today, so you’d be pulling in a cool $9,400 in dividends for every $100K invested—enough to recoup your entire investment in dividends alone in a bit more than 10 years! It doesn’t get much safer than that.)

And yes, I know full well how corny “dividend Swiss Army knife” sounds. But the name works! Because apart from simply paying you a massive income stream, these two funds—closed-end funds (CEFs), to be specific—also:

• Fade your portfolio’s volatility (a key strength in the overbought market we’re facing today).