Author Archive: Michael Foster

Worried that a bursting bitcoin bubble will sideswipe stocks in 2018?

Don’t be. Because as I’ll explain in a moment, the hysteria over the so-called “cryptocurrency” is actually good for stocks this year, no matter if bitcoin explodes for a 10,000% gain … or flames out and crashes back to earth.

I’ll also show you the one surprising group of stocks poised to benefit from bitcoin in 2018, no matter what happens.

First, if you’re like most people and find bitcoin a complete mystery, stick with me for a minute and I’ll show you how it works—and what’s pumping up the bulging bitcoin bubble.… Read more

Today I’m going to show you the 3 best closed-end funds of 2017—and reveal a surprising prediction for each of these powerhouse CEFs in 2018.

The prediction? That after soaring up to 58.8% in 2017, these 3 rock-solid CEFs aren’t done yet. In fact, I see all 3 posting double-digit gains in the next 12 months, too!

More on these 3 winning funds in a moment. (And if you’re unfamiliar with CEFs, click here for a full primer on them.)

First, let’s take a very fast look at…

The Year That Was in CEFs

In CEFs, the biggest winners of 2017 had a lot in common, and that made it easy to separate the losers from the winners, because the whole market seemed to agree on 3 things:

1. Tech is where to put your money.

If there’s one thing I love, it’s picking up on a “sleeper” income opportunity that first-level investors have walked right past.

And today I’m going to show you not one but three. And one of these stealth buys yields a safe, stable 9.5%.

So a $100,000 investment in this unloved fund would hand you a nice $9,500 in 2018, or a steady $2,375 when its dividends drop into your account every quarter.

I’ll have more to say about these 3 funds—all of which are managed by a real, live human—shortly, including why they’re a better way to go than a “dumb” index fund.… Read more

I usually don’t recommend shorting a closed-end fund (CEF), but if I were to do so, the 3 I’m about to show you would top my list.

I don’t like shorting CEFs for two simple reasons: first, you’re responsible for paying out the dividends on a shorted stock. So if a CEF pays a 10% yield, you have to pay out 10% while shorting it. No thanks!

Second, the CEF market is extremely irrational. For this reason, CEFs can remain overvalued for a long time, meaning you’ll need to short for far too long before you get your payouts.

Still, there are some CEFs that are so absurdly overbought that shorting becomes really tempting.… Read more

Today I’m going to give you my full investment forecast for 2018—and name 2 high-yielding closed-end funds (CEFs) poised to soar after the new year rolls in.

But before we get to that, we need to cast a quick eye back over 2017, because 2 things that happened this year are setting us up for big gains next year.

And 2017 was a terrific year for stocks—something that came as a surprise to many folks (but not me).

When we started the year, a slew of fears were encouraging bears to warn of an impending stock-market crash. Then the SPDR S&P 500 ETF (SPY) did this:

A Great Year

I’ve been beating the drum for stocks throughout 2017.… Read more

It’s one of the biggest worries I hear from investors who hold bonds: what’s going to happen to my portfolio when the Federal Reserve raises interest rates?

My short answer is always the same: don’t worry—it’s not as big of a deal as you think.

That’s true for many bond funds out there—but there are some that are still ticking time bombs because they’re poorly managed. The worst offenders are the ones that aren’t managed at all—the “dumb” funds that blindly track the index and keep a ton of bonds from near-bankrupt companies alongside much better issues.

Funds like the iShares iBoxx High Yield Corporate Bond ETF (JNK) and the SPDR Bloomberg Barclays High Yield Bond ETF (HYG) are the worst offenders here.… Read more

I’ve been getting a lot of emails from readers worried about how closed-end funds (CEFs)—especially bond-oriented closed-end funds—will perform next year, when the Federal Reserve raises interest rates.

And that’s definitely a when and not an if—there is too much good economic data to suggest the Fed will back off its rate-hike plans, which both it and most US legislators desperately want to happen.

(A couple weeks ago, I gave you my outlook for the US economy in 2018 and named 5 non-bond CEFs to buy before the New Year arrives. Click here to read that article.)… Read more

The tax reform debate in Washington is roiling the municipal bond market—and that’s setting up a screaming buying opportunity for contrarians on the hunt for income.

I’ll tell you why, and show you exactly how to cash in, in a moment.

First, if you’ve been watching “munis” for any length of time, I probably don’t have to tell you that muni-bond investors detest uncertainty.

That’s because they’re risk-averse folks who just want a high, tax-free yield on their money.

After all, that’s what municipal bonds are for; they offer higher yields than US Treasuries; they’re untaxed for most Americans, unlike federal bonds and stock dividends; and their prices don’t fluctuate much.… Read more

I’ve spoken to a lot of investors who are still scared of real estate after the housing bubble burst in 2008. These folks have a lot of cash on the sidelines, and they’re desperate for income, but they’re too scared to jump into real estate.

Usually when investors express these fears, I show them this chart:

Real Estate Beat Stocks in the Real Estate Crash

This is a chart of the SPDR S&P 500 ETF (SPY) and the SPDR Dow Jones REIT ETF (RWR). The latter only holds real estate investment trusts (REITs), which are companies that rent out real estate and pass most of the rental income to shareholders as dividends.… Read more

I usually write about the beauty of closed-end funds (CEFs) and how we can tap them for yields of 7% or more while also beating the S&P 500 index.

Today I want to talk about the dogs of the CEF world.

And there are plenty of dogs to talk about—they’ll kill your returns while promising big income streams that aren’t what they seem.

It’s a shame, because a lot of these rotten CEFs attract first-level investors who don’t look beyond the dividend yield. As a result, these folks often get buyer’s remorse when they discover those big dividends were actually hiding a grim—and riskier—reality.… Read more