Author Archive: Michael Foster

Investment Strategist

2 So-Called “Safe” Dividends Circling the Drain (sell now!)

Michael Foster, Investment Strategist
Updated: November 4, 2019

It’s been a terrific year for one specific group of funds—and that means, if you’re one of many people who own them, you need to be very careful.

I’m talking about senior-loan (also known as floating-rate) funds, which have made big gains in 2019. That’s lulled many folks into a false sense of security, idly thinking these steady returns will roll in for the long term.

That’s a big mistake.

To see what I mean, look at the Invesco Senior Loan ETF (BKLN), which serves as something of an index for senior loans. It yields 5.2% and is up 7.3% in 2019.… Read more

Forget Index Funds: Buy This for 316% Gains, 7% Dividends

Michael Foster, Investment Strategist
Updated: October 31, 2019

It’s a line you’ve no doubt heard before. It goes like this: “The market is too efficient to beat, so you may as well just park your cash in a low-cost index fund and call it a day.”

Nonsense! The truly ridiculous thing is, this myth is proven wrong every day—but investors just can’t quit it. And it’s costing them triple-digit returns (and 7%+ dividends) that could leave them well short of what they need to retire.

For proof that this market is far from efficient, just look at the one-day 22% drop in shares of Beyond Meat (BYND). That came after the company beat revenue expectations and its profits were twice what the market expected.… Read more

A Secret Way to Buy Apple (with a 9.2% dividend)

Michael Foster, Investment Strategist
Updated: October 28, 2019

I run across “buy and hope” investors all the time. You know the type: they latch on to a big-name stock, like Visa (V) or Berkshire Hathaway (BRK) and “hope” for big price gains.

Truth is, that’s their only option. With most big-cap stocks paying less than 2%, they’re sure not getting much in dividends!

Sad thing is, most people think this is the only way to invest. But there’s a better, safer approach. That’s what I’ll show you today.

It’s a simple investment that lets you buy the big-cap stocks you know well, but with two key differences: you’ll get a 9.2% dividend, so you’re getting much of your return in steady cash payouts …

… and you’ll be able to buy them for less than folks who pick them up individually, or through an index fund.… Read more

Is This Another 2008? Here’s the Surprising Answer

Michael Foster, Investment Strategist
Updated: October 24, 2019

It’s a statement we hear from readers a lot: “I’m worried about another 2008.”

I get it. After all, we’re all 11 years older and have that much less time to recover from a crash. So today we’re going to cut through the noise and look at whether there really is something to worry about here.

We’ll do it by comparing, point for point, what’s happening now to the run-up to the 2008 crash. I think you’ll be surprised by the results.

Let’s dive in.

This Happened in 2006—and Again Last March

We started hearing about the inverted yield curve—when yields on short-term Treasuries move higher than those on longer-term ones—seven months ago.… Read more

The 8.6% Dividend Your Advisor Hides From You

Michael Foster, Investment Strategist
Updated: October 21, 2019

When I show people how closed-end funds (CEFs) can hand them safe 7% yields and let them retire on much less than a million bucks, they often say one thing:

“Why the heck hasn’t my financial advisor told me any of this?” 

The reasons are both simple and surprising: 1) Many financial advisors don’t fully understand how CEFs work, and 2) Some CEFs involve a bit of research, so for a lot of advisors it’s easier to recommend low-cost index funds and call it a day.

Both of these (unacceptable) reasons are costing folks millions in profits!

So today we’re going to demystify CEFs by zeroing in on a fund that’s crushed the market for nearly two decades.… Read more

This Surprising Fund Has Soared 59% (it’s just getting started)

Michael Foster, Investment Strategist
Updated: October 17, 2019

If you own closed-end funds (CEFs), I have great news: equity CEFs are doing exactly what we want them to: crushing the market while handing us 7%+ dividends.

(And if you’re not yet in CEFs, or want to bulk up your CEF holdings, sit tight: I’ll name a fund you can buy shortly. It has an extra kick in store, thanks to an over-torqued corporate failure: I’m looking at you, WeWork.)

First, here’s what stocks have done this year:

Stocks Soar …

And here’s what CEFs are up to (with the beige line at the top being the equity CEFs tracked by my CEF Insider service).… Read more

These 335 Funds Have Never Lost (and yield 7%)

Michael Foster, Investment Strategist
Updated: October 14, 2019

If you’re stuck with measly dividends from stocks or Treasuries, closed-end funds (CEFs) are the answer.

After all, these funds yield an amazing 7%, on average, and they let you buy in at a discount (most CEFs trade for less than their net asset value, or NAV).

The One CEF Question I Get a Lot (and the Surprising Answer)

A reader or subscriber to my CEF Insider service will sometimes ask me: can I lose money with CEFs?

The technical answer is, yes, of course—as with any investment, you can lose money. Even when you put your money in the bank, there’s a risk of losing it if the bank goes under and the FDIC collapses.… Read more

How to Play Tech for 6% Dividends and 300% Upside

Michael Foster, Investment Strategist
Updated: October 10, 2019

New funds are rare in the closed-end fund (CEF) world. But there’s a new kid on the block throwing off a monthly 6% dividend. Today we’re going to run through this new fund to see if it might have a place in your portfolio.

6% Dividends and Netflix-Like Growth—in 1 Fund

I’m talking about the BlackRock Science and Technology Trust II (BSTZ), launched in mid-May of this year.

The unique thing about BSTZ is right in its name: it’s no stodgy income play: its portfolio is packed with some of the fastest-growing tech plays out there.

I’m not talking about Apple (AAPL), Netflix (NFLX) or Facebook (FB).Read more

This “Billionaire’s Favorite” (Legally) Snubs the IRS and Yields 5.1%

Michael Foster, Investment Strategist
Updated: October 7, 2019

If you’re like many folks, you might be looking at your stock gains this year and dreading the tax bill headed your way in 2020.

That makes now a great time to consider the only (tax-) free lunch in investing: municipal bonds. I’ll name one play on these retirement-changing investments in a moment. This unusual fund yields an outsized 5.1% today and sets us up for a “steady as she goes” triple-digit gain, too.

First, let’s talk a little more about the tax side of “muni” bonds: these investments pay a 100% tax-free dividend (so their “real” yields could be much higher for you, depending on your tax bracket).… Read more

This Amazing Fund Spiked 338% (and Pays 8.6% Dividends Monthly)

Michael Foster, Investment Strategist
Updated: October 3, 2019

Buy funds with the lowest fees and you’ll retire earlier. That’s the so-called “wisdom” in investing, right?

Too bad it’s dead wrong.

Today I’m going to show you how. I’ll also name an incredible fund that racked up a monster 338% return in the last decade, crushing its “dumb” index-fund alternative by nearly 4 to 1!

Plus, this unsung income play pays a safe—and growing—8.6% dividend (paid monthly, no less). That’s enough to hand you $3,583 every month on a $500K nest egg.

Leaving $1,000,000 on the Table

Before we get to that, let’s look at how obsessing over fees can cause you to miss out on thousands of dollars—maybe even a million!… Read more