Author Archive: Michael Foster

I’m about to show you three potent investing trends that are being drowned out by the media noise. Then we’ll uncover three snubbed funds set to ride these surging trends to big gains (hint: one of these buys pays an amazing 8.4% dividend!).

Let’s get started.

Trend No. 1: A Still-Roaring US Economy

Take a close look at the chart below. See how every quarter in 2018 has been ahead of every quarter since 2015 by a mile?

Here’s the funny thing: despite that, 2018 gave us the first bear market in stocks since 2008.

It makes zero sense … and it’s why I’ve been pounding the table on stocks since they started falling last year.… Read more

Every so often, a CEF Insider subscriber asks if I see oil-related closed-end funds (CEFs) as solid income plays. You might be wondering the same, given the surge in oil prices—and oil stocks—since the start of 2019.

Today we’re going to answer that question. Along the way, we’ll uncover an energy CEF you need to steer clear of, no matter how you feel about oil.

Let’s start by making a quick run through history: what would have happened if you invested in energy CEFs over the last few years?

Source: CEF Insider

While the last three years have seen a decent average annualized return, and a negative return if you got in five years ago.… Read more

If you want to diversify, get a strong—and growing—dividend and dodge risky speculation, the SPDR S&P Dividend ETF (SDY) may seem like a no-brainer.

But buying this fund would be a huge mistake!

Today I’m going to show you why, and help you avoid a couple other seemingly obvious moves that could steer you into big trouble. Further on, I’ll reveal a terrific fund paying an outsized monthly dividend (yielding 7.9%) to buy now and tuck away for two decades or more.

First, back to SDY, which has beaten the S&P 500 over the past decade:

SDY Throws Us the Bait …

At the same time, the fund has shown solid dividend growth, as well as some massive special dividends that have helped its payouts grow substantially over the years:

… and Sets the Hook

So why not just buy this fund and call it a day?… Read more

Today I’ll show you how I helped investors sidestep a “silent” payout cut in a popular closed-end fund (CEF). We’ll also look at how to approach this fan fave today—and how this tale can help us keep our nest eggs (and income!) safe.

Calling Out the Cool Kid

I’m talking about the PIMCO Dynamic Income Fund (PDI), which I flagged nearly two years ago, when it was at the height of its fame thanks to its outsized 9% dividend yield.

Even though first-level investors couldn’t get enough of PDI, I fired off a warning flare, writing that its massive 8.4% premium to net asset value (NAV, or the value of the corporate and government bonds and mortgage-backed securities it held) was under threat.… Read more

It’s a question that’s absolutely critical when judging a closed-end fund: how safe is the dividend?

This is particularly crucial when you consider the huge yields the average CEF offers compared to their ETF cousins. For the 2,918 ETFs available to US investors, the average payout is 1.9%, partly because 735 of these funds pay nothing at all. But even without those, the average ETF yield is still a pathetic 2.5%.

CEFs? For the over 450 covered by my CEF Insider service, the average yield is 7.3%, and only nine yield less than 1%. In fact, over 85% of CEFs yield more than 4%, while just 9% of ETFs do!… Read more

Tune out the nervous Nellies panicking over last week’s job numbers: they missed the real news—and their panic has handed us a straight shot at a cheap 7.6% dividend today.

More on that opportunity shortly.

First, the real story here is that wages jumped 3.4% in February, which is the fastest rate in half a century. And the unemployment rate sits at 3.8%, far lower than just two years ago, when it levitated north of 4.8%.

A Direct Line From Paychecks to Profits

I’m sure I don’t have to tell you that consumers drive the economy, and more workers, making more cash, are great news for stocks.… Read more

The headlines say it all: the economy is slowing down, right?

And with stocks soaring—up 11% year to date—we must be headed for a correction.

Both statements would be off the mark.

Because the economic numbers the government is putting out (and the press is repeating without question) are flawed. I’ll show you how in a moment.

First, let’s cut straight to the upshot: you’ve still got a great shot at buying high-yield closed-end funds (CEFs) now, particularly those that hold America’s best stocks. I’ll name two choices yielding 7.3%+ at the end of this article.

First, let’s zero in on the many economic tailwinds (some in disguise), that are driving this still-solid opportunity.… Read more

Today I’m going to peer into my crystal ball and give you the scoop on where high-yield closed-end funds (CEFs) might be headed in 2019.

Then I’ll give you a proven way to zero in on the ones that are the best bargains for your portfolio now.

CEFs Come Out Flying

First, if you own stocks through CEFs (and if you don’t, click here to discover why these 7%+ payers are a retirement “must-have”), you’re already outrunning the market: my CEF Insider Equity Sub-Index—a great proxy for stock-owning CEFs—is up 13.7% since January 1, a nice lead on the S&P 500’s 12.3% gain.… Read more

Here’s something that might surprise you about gold: closed-end fund (CEF) managers—at least those I speak to—pay little attention to it.

We’ll dive into why right now. Then I’ll show you three gold CEFs you need to keep away from your portfolio. Because gold’s future looks nothing like the rosy past gold bugs love to use to justify their lust for the yellow metal.

So why do most CEF chiefs (not to mention celebrated investors like Warren Buffett) shun gold?

The short answer is that gold doesn’t produce anything. So when you buy it, you’re speculating that someone will buy it from you for a higher price in the future.… Read more

Today I’m going to show you a closed-end fund (CEF) yielding 13.7% that sounds—and is—too good to be true.

If you hold it, now is the time to sell.

The fund I’m talking about is Eagle Point Credit Company (ECC). Today we’re going to dive into all the reasons why ECC is a CEF to avoid. I’ll also give you five takeaway tips you can use to steer clear of funds like it in the future.

Let’s get started.

CEF Danger Sign No. 1: NAV and Market Price Go Haywire

As you can see below, ECC recently saw its net asset value, or NAV, plummet 26%, erasing three years of gains overnight:

ECC’s Underlying Portfolio Collapses …

In a normal situation, you’d expect investors to sell fast.… Read more