Author Archive: Michael Foster

A lot of closed-end fund (CEF) investors—particularly new ones—wonder how CEFs can sustain huge 8% dividends in a 2% (if we’re lucky!) world.

It’s actually pretty easy. Below we’ll look at three ways CEFs make these retirement-changing payouts happen. And, in response to a question I’m hearing a lot from CEF Insider subscribers these days, we’re going to zero in on one particularly sticky subject: return of capital (ROC).

Contrary to what many people think, ROC isn’t a fund simply handing your cash back to you—and charging a fee for doing so. It’s actually a dividend-investor’s dream! Let’s set up our deep dive into ROC with a snapshot of how easy it can be for CEFs to hand us those rich 8%+ dividends.… Read more

I’m going to show you a dividend portfolio that gets you an incredible 9.5% payout—and you won’t have to take on stomach-churning risk (which, let’s face it, no one’s keen on doing now) to get it.

Imagine what a 9.5% dividend could mean. Take a $300,000 portfolio and you’ve suddenly got $2,375 in passive monthly income. A million bucks? You’re talking about almost $8,000 a month—miles ahead of the $1,500 a month you’d get if you just put it in an S&P 500 index fund.

Here’s the kicker: the investments in this five-fund portfolio, all closed-end funds (CEFs), invest in the same companies that make up the S&P 500.… Read more

Stocks have (shockingly) broken into the green for 2020 … but few folks are celebrating. That’s understandable: coronavirus cases are surging and another wave of lockdowns is a real possibility.

But there is good news here.

First off, I’ve found a “heads-you-win, tails-you-win” fund that’s perfect for these times. It pays a 7.5% dividend and boasts a portfolio of stocks we know well: Microsoft (MSFT), Apple (AAPL), Amazon.com (AMZN) and MasterCard (MA) among them.

Before we get to this fund, we need to take a close look at this levitating market so we can see exactly what it means for our portfolios as we move into the unpredictable back half of 2020.… Read more

Preferred stocks are hands-down the most ignored investments in this crisis. That’s too bad, because they’re one of the best ways to get a high, safe income stream. And you can supercharge their dividends by purchasing these “dividend unicorns” through preferred-stock closed-end funds.

Before I go further, let me say that if the term “preferred shares” has your eyes glazing over, I get it: most people feel these investments are too obscure to bother with. But stick with me, because preferreds are actually perfectly suited to today’s contradictory economy, with its high numbers of bankruptcies and a rising stock market.… Read more

Here’s a critical mistake anyone can make while hunting for big dividends in a market like today’s: you can buy the right stocks at the right times—and still lose money!

2020 is a good example: even though the S&P 500 is back now positive on the year, you almost certainly suffered some degree of the following wipeout, no matter which stock you would have bought at the start of 2020:

The Headache of Going All in on Stocks

Ask anyone and they’ll likely say the market has been totally unhinged this year; bulls will say stocks shouldn’t have fallen as far as they did in March, and bears will say they shouldn’t have recovered so quickly.… Read more

This crisis has hit income-seekers—particularly retirees—hard. After the stomach-churning March selloff came the slashing of “sacred cow” dividends, like those of senior-care providers Ventas (VTR) and Welltower (WELL).

Look to Closed-End Funds for Retirement Income

It’s understandable (and healthy!) if the past few months have made you extra cautious when picking dividend stocks. The good news on the dividend front is that you can still find plenty of high, safe payouts in my favorite corner of the high-yield market: closed-end funds (CEFs).

CEFs are a great pick for retirement income today, for three reasons. First, they still give you access to large-cap stocks you know well: mainstays like Visa (V), Apple (AAPL) and Johnson & Johnson (JNJ) feature in many equity-CEF portfolios.… Read more

With the S&P 500 yielding just 1.8%, and 10-Year Treasuries paying a pathetic 0.7%, many folks are getting desperate for income—and they’re falling for dangerous dividends like exchange-traded notes (ETNs).

Note I said “ETN” here, and not “ETF.” It’s a critical distinction—and overlooking it could cost you a fortune in gains and dividends.

A Crippling 70% Loss

To see how dangerous ETNs can be, consider the (now defunct) UBS Etracs Monthly Pay 2x Leveraged Closed-End ETN (CEFL), which I first warned readers about in October 2017. CEFL went on to be crushed by the S&P 500 from that first warning until the start of 2020.… Read more

The way most folks invest, they’ll need way more than a million bucks to retire—in fact, they’ll need almost double that!

No wonder so many people throw up their hands and commit to working till they’re 100. Maybe you’re one of these frustrated souls. With the world in the state it’s in today, I can’t blame you.

But what if I told you that you could retire on a lot less? Like 75% less.

That’s right: a fully paid-for retirement on just a $437,500 nest egg. Save up that much and you can look forward to a steady $35,000 in dividends (which is right around the average personal income in the US) year in and year out.… Read more

It’s no secret why most people buy closed-end funds (CEFs): big dividends!

The 500 or so CEFs out there yield a game-changing 7%, on average. And with CEFs coming from all corners of the economy, you can easily build a nice, diversified CEF portfolio paying enough dividend cash to let you retire on $500,000 (or less!).

If you’re a reader of my CEF Insider service, none of this will surprise you. The service’s portfolio boasts funds yielding all the way up to 12.9%.

CEF Investors an Emotional Group

But there is one thing you should know about the CEF market: investors who buy CEFs are a bit twitchy, meaning they can sometimes oversell in a crisis.… Read more

What if I told you I could get you a steady 10% dividend right now with ease? And with a big slice of that income rolling your way every month, too?

The key is to invest in an often-overlooked investment called a closed-end fund (CEF). As I write this, there are about 500 CEFs in existence, and they yield around 8%, on average. Some pay more than that, such as the 5 CEFs I reveal in my free investor report, “Indestructible Income: 5 Bargain Funds With Steady 10% Dividends.”

With a 10% average payout, you’d be banking a nice $30,000 yearly income stream (or about $2,500 a month!)… Read more