Author Archive: Michael Foster

There’s a storm brewing for closed-end funds, but it’ll be over by Christmas. And with a quick hand, you and I can profit from it.

More on that—and 5 CEFs that should be on your post-selloff buy list—in a moment.

First, I should tell you that the storm front I see coming stems from nothing more than the calendar on your wall (or more likely on your phone): the looming year-end, which often trips up CEFs (and other funds, as well as stocks). That’s because many investors sell at the end of the year to try to secure a lower tax burden when filing their taxes next year.… Read more

Imagine you’re sitting in a bar and a guy sits down next to you and says, “I just took out a $6-million loan.”

How would you feel? Would you pity him for having so much debt? Would you wonder how he’d ever pay it back? Would you calculate how much those monthly payments would be?

If your instinct is to feel bad for someone with a multi-million-dollar loan, you should change your mind. Because our fictional bar patron could be Mark Zuckerberg, one of the richest people on earth.

That’s right—Zuck took out a $6-million loan in 2012 because he could get said loan at a mere 1% interest rate.… Read more

Of all the things investors ask me about closed-end funds, the main one is leverage. (A close No. 2 is CEF return of capital, which I discussed in a recent article here.)

Yes, CEFs often borrow money and invest it in stocks or bonds. That scares some people, who then ask me if a leveraged CEF is safe.

The answer is: sometimes. (Below I’ll show you 2 CEFs with 6.5%+ dividend yields that are using leverage perfectly to slingshot their shareholders to double-digit gains.)

You see, leverage can boost your return in a bull market and magnify your loss in a bear market.… Read more

If you’re like most folks, you probably think it’s tough for any fund to beat the S&P 500, especially in a year when the index jumped some 15%.

But you’d be wrong.

Truth is a lot of funds are doing better, with over 660 beating the S&P 500. And the top-performers share 3 common themes that could tell us a lot about which sectors are poised to take off next year.

Let’s dig in. Along the way, we’ll hone in on the 33 funds that are cashing in as these breakthrough trends head higher.

Trend No. 1: Skyrocketing Faith in Technology (11 Funds)

Markets have always believed that technology will improve the global economy.… Read more

With over 500 closed-end funds (CEFs) on the market, how do you choose the best one?

It’s not an easy question to answer, because there are literally dozens of metrics any CEF investor should look at before buying.

Luckily, I’ve found a way to boil those down for you. In a moment, I’ll reveal the 5-point system I’ve carefully designed to pick winning CEFs for our CEF Insider service.

(If you joined me for my exclusive CEF Insider live webcast on October 25, you know about this proven system and you got 2 of my latest CEF investment ideas for 7.1% dividends and double-digit upside in 2018.… Read more

At CEF Insider, we regularly pound the table on top-notch US closed-end funds (CEFs).

And we still see America as our “go to” for huge yields, income and big gains. But if you take a pass on other parts of the world, you’ll miss a proven way to cut your risk (thanks to the tremendous variety in the global economy) and big upside too.

That’s why we constantly keep our eyes trained on the horizon. And today, one particular place has caught our attention: Asia.

For a long time, Asian stocks were a sucker’s bet, for a couple reasons.

The biggest?… Read more

Remember when I said there were more than 2,400 closed-end funds, mutual funds and ETFs beating the S&P 500?

Well, today we’re going to dive into three of those funds. Unlike many of their cousins, these aren’t one-hit wonders.

All three boast outsized dividend payouts far larger than those of any S&P 500 stock: all the way up to 8.3%!

They also give you instant diversification and world-class management. You can see that in each fund’s stock-picking prowess, which is translating into gains that crush the S&P 500 SPDR ETF (SPY):

Leading the Index by a Mile

So let’s dig deeper to see how these funds tick and what place they might have in your portfolio.… Read more

Back in February 2016, I wrote an article titled “4 Reasons to Buy This 9.2% Yielding Equity Fund”. That fund was the AGIC Equity and Convertible Income Fund (NIE).

Since then, NIE has done this:

Almost 50% Gains in a Year and a Half

Oh, and did I mention that NIE pays a 7.4% dividend? That’s right: $100,000 in this fund gives you $616 per month in cash.

Despite the conventional wisdom about dividend yields, that high yield doesn’t come with high risks. Not only has NIE been growing its dividend since 2009, but that income stream is well covered by the fund’s investments—again, thanks to its big returns, as we see in the chart above.… Read more

One thing investors ask me about all the time is return of capital, or ROC.

In a nutshell, these folks are mainly worried that ROC is simply a fund taking your money and paying you a dividend from your money without actually making a positive return on it.

Worse, they’re doing this after taking out their fees, which are much higher than the fees you’d pay on an index fund!

Before you get your pitchfork out, know that this perception of ROC is wrong. In reality, return of capital is often very good for investors.

For starters, ROC isn’t simply a fund taking your money and giving it back to you.… Read more

Any way you slice it, it was a big bet.

I’m talking about the legendary wager Warren Buffett made with hedge fund manager Ted Siedes a decade ago.

You may recall this $500,000 gamble. It went like this: if hedge funds could beat the S&P 500 over a decade, Siedes would win. If not, Buffett would win.

The result: the index crushed the funds Siedes chose, prompting him to concede defeat last May.

He went down fighting, though, writing that it was the hedge funds’ global focus that caused them to underperform, not the prevailing “wisdom” that stock picking is little more than gambling.… Read more