Author Archive: Michael Foster

If this wobbly market has you parked on the sidelines, worrying the big 2019 rally might evaporate at any second, I have good news: this is still a great time to buy.

But you need to buy carefully if we want to maximize our upside (and protect ourselves from a 2008-style meltdown).

The solution?

Top-quality closed-end funds (CEFs) handing you dividend cash that more than doubles (and in many cases more than triples) what your typical S&P 500 stock pays. I’ll give you three solid CEF picks (selling at fire-sale prices up to 23% off) at the end of this article.… Read more

You’ve no doubt heard the “wisdom” that you’ll need a million bucks to have any hope of retiring.

If you’re like most folks, you’ve probably wondered how you’ll manage to save such a huge stash. Maybe you’ve given up and resigned yourself to working till you’re 100.

I can’t blame you. Because with the rising cost of everything these days, finding an extra seven figures during your working life seems like a massive mountain to climb.

This is why I’m writing you today. I’m going to show you two things:

1. A plan for saving a million bucks, if you want to, and …
2. Why you don’t need anywhere near a million dollars in the first place (thanks to three 6.8%-yielding funds that let you clock out on hundreds of thousands of dollars less, without selling a single stock in retirement, to boot!)

I’ve uncovered two high-yield closed-end funds (CEFs) that are perfect for this “earnings down, stocks up” market.

I’m going to show you both of these bargain-priced, cash-spinning plays—one of which yields an incredible 9.2%, five times more than the typical S&P 500 stock—shortly.

First, we need to talk about where stocks stand now. Because you’re probably wondering how the market can keep ticking up when first-quarter earnings are actually down from a year ago.

You’re right to be concerned, because it makes zero sense—on the surface. But dig deeper and you’ll see that this is a good news story, and a perfect opportunity for contrarians like us to grab big gains (and dividends).… Read more

When it comes to stocks, it takes a strong stomach to bet against the crowd. But the truth is, you can pull in big profits doing just that.

Today I’m going to show you how to push straight through the hype and peer pressure—and cash in.

It’s easy to see how shunning the crowd pays off. Look back at December, the darkest point of last fall’s meltdown. That’s when I recommended ignoring the crash completely and focusing on the gains at hand. This went double if you bought stocks through 7%+-yielding closed-end funds (CEFs).

What happened next? A fast 18% profit:

Savvy Contrarians Hit Paydirt

Fast-forward to today, and we contrarians are in a tough spot: the market’s floating higher, and the party appears to be back on.… Read more

Something very weird is happening with high-yield closed-end funds (CEFs): many of them are ridiculously cheap, despite soaring double-digits this year.

(And when I say these are “high-yield” funds, I mean it: nearly all of the five funds I’ll show you shortly yield 7% and up!)

I know that sounds impossible: a big run-up and a bargain in one buy?

It’s true—and it’s the beauty of CEFs: unlike with mutual funds and ETFs, CEFs’ market prices can swing massively from the net asset value (NAV) of their portfolios. That’s because investors often ignore CEFs and fail to bid them up to what they’d be worth if they were liquidated tomorrow.… Read more

It’s easy to see why investors love utilities:

1. Low volatility
2. High yields

But there’s a problem: recent scares like the inverted yield curve mean some utilities, and utility funds, have gotten ahead of themselves and are more prone to a pullback than most folks think. (The three 7%+-yielding closed-end funds (CEFs) I’ll show you shortly top this “overpriced” list.)

The worst part is, many people think utilities are underbought, because the benchmark Utilities Select Sector SPDR ETF (XLU) is up 8.3% year-to-date, half the 16% gain of the SPDR S&P 500 ETF (SPY).

But that’s recency bias. Stretch the timeline to 12 months and things look very different:

Utilities Get Pricey

Interest-Rate Pause Should Boost Utilities.… Read more

Still spinning from Tax Day?

You’re not alone: plenty of folks who bagged wins last year are feeling shell-shocked, now that Uncle Sam has walked off with his cut.

Let’s face it: it’s too late to recoup any of that cash. But you can still take steps to weaken Uncle Sam’s grip on from your income stream, before you find yourself in the same boat next year.

And there’s an easy way to do it—it actually comes, in a strange way, from the government itself!

“Keep 100% of Your Gains Forever”

I’m talking about municipal bonds, or bonds issued by states, cities and counties to finance roads, bridges and just about any other project you can imagine.… Read more

If you’re watching tech stocks grind higher every day, you’ve probably been just a little tempted to jump in.

… or should you wait? After all, the high-flying tech space—particularly fan faves like Facebook (FB), Apple (AAPL), Amazon (AMZN) and Google (GOOGL), a.k.a. Alphabet—has to pull back sometime, right?

The short answer is yes, there are plenty more gains ahead for tech—especially if you’re investing over the long haul—making now a great time to buy.

A 9% Dividend From Google (for real)

But we’re not going to “buy direct” and hope for more upside, like your S&P 500-focused friends are likely doing.… Read more

There’s a three-word phrase that’s terrifying just about everyone these days. If you take it at face value, it could trick you into making a dangerous mistake with your retirement.

It springs from the following chart:

The Yield-Curve Panic

This chart tracks the spread between yields on the 10-year Treasury and the 2-year Treasury. In normal times, the shorter-term bond pays a smaller yield than the longer-term bond. But the difference between the two has gotten smaller and is now close to going negative.

That’s where our dangerous phrase comes from: this situation is known as an inverted yield curve.

The upshot?… Read more

In February, I wrote this about the PIMCO Global Stocks+ and Income Fund (PGP):

“If you have PGP in your portfolio, this is the time to ditch it.”

Then in early April, this happened:

Warning Becomes Reality

What was behind this nosedive? A whopping 23% dividend cut! Worse, PGP owners who didn’t heed my sell call are now sitting on 11% price losses from the day the cuts were announced.

How did I know this calamity was coming?

When it comes to high-yielding CEFs, there are three warning signs that tell you a big crash is just around the corner, and each one was blaring before PGP’s drop.… Read more