Author Archive: Michael Foster

Another day, another bearish article. It’s impossible nowadays to read the news without someone telling us that a crash is coming and we need to sell our stocks now!

If you’re seeing these same people urging you to liquidate your retirement accounts, you’re not alone. In fact, these stories seem to be everywhere in the mainstream financial press.

It’s all nonsense, written to grab your attention with fear-based headlines.

And if you don’t take a critical look at these stories (and here I mean going by raw numbers, not emotional appeals), you risk missing a terrific wealth-building opportunity—or worse.

Here’s the truth: behind the alarming headlines, there’s another, far more boring story: American companies are absolutely crushing it.… Read more

It’s a complaint I hear about closed-end funds all the time: they charge high fees but still underperform the market.

To be honest, this is true of some funds—but not all of them. In fact, some CEFs have racked up breathtaking returns far bigger than those of the market as a whole.

I’ve written about funds that have beaten the benchmark index before, such as the 14 funds that crush Vanguard’s passive funds while also offering superior dividend yields.

Then there are the actively managed Vanguard funds that beat Vanguard’s own passive funds and have done so for years. And of course, CEF Insider subscribers know of several closed-end funds that have beaten the S&P 500 for a decade or longer and are still outperforming.… Read more

So far, 2017 is shaping up to be a great year for US stocks, but there are plenty of funds that are doing much better than your typical passive index fund.

In fact, some funds are so hot that they’ve already shot up over 30% in 2017 and show little sign of slowing down.

Two big trends are at work here, and each has far-reaching implications, not only for these funds but for the economy and stock market as a whole. Both are also extremely important trends that few investors truly understand.

What am I talking about? The US dollar’s weakness and the future of rising interest rates.… Read more

Mortgage rates reached a new milestone last week, and it’s one of the most important—and underreported—events in economic history.

For the first time ever, 30-year mortgage rates fell below 3.99%, on average. This is stunning for several reasons, but the most important is that the Federal Reserve is actively working to get mortgage rates higher. By increasing its Federal funds interest rate target, the Fed is hoping to make borrowing more expensive for everyone—companies, students and, yes, homebuyers.

But it’s not working.

And perhaps the biggest reason why it’s not working is that bond investors don’t think economic growth is going to strengthen, so they’re effectively daring the Fed to keep raising rates.… Read more

A couple days ago, we showed you how to get $4,000 in monthly income from just 4 stocks.

A bonus? Each of these buys pays dividends every single month—precisely when your bills roll in.

That $4,000 number was no accident; it’s the average amount a 65- to 74-year-old couple in the United States spends every month, according to the Bureau of Labor Statistics. That makes this a great number to shoot for when you’re building your own retirement nest egg.

And today we’re going to go further, with 4 funds that give you an extra margin of safety while you’re pocketing the same amount of income—a nice $4k a month—in your golden years.… Read more

Stocks are going gangbusters, but some closed-end funds—including three I’m going to tell you about below—have gotten way ahead of the market.

That means it’s time to sell. Yesterday.

But don’t let that turn you off the whole CEF space. Truth is, there’s still a treasure trove of hidden gems here, including some that crush the S&P 500 while paying incredible 7%+ dividends. It’s just that investors sometimes go overboard and bid certain CEFs above their actual value.

How is this possible?

Because unlike ETFs and mutual funds, which always trade at or near their net asset value (NAV, or what a fund’s underlying assets are worth), CEFs often trade at big premiums or discounts to NAV.… Read more

If you feel good because your S&P 500 index fund has taken off like a rocket in 2017, you may not want to read this article.

Because the S&P 500 is, in fact, not doing well this year—at least not compared to its peers.

Don’t believe me?

Take a look at the SPDR S&P 500 ETF’s (SPY) performance relative to a global stock fund like the Vanguard Total World Stock ETF (VT):

The World Races Ahead

Not only is a global stock portfolio crushing the S&P 500, but US equities are actually dragging the world’s returns down.

Notice how, in the chart above, the Vanguard FTSE All-World ex-US ETF (VEU) is up 14.6%, versus VT’s 11.1% return for 2017?… Read more

Index investing is popular among investors for one reason: most people don’t want to put the time and effort into finding investments selling at deep discounts.

The most popular way to get into index investing is through exchange-traded funds, which have replaced mutual funds as the hot investment vehicle of the day.

There’s just one problem: even the highest-yielding ETFs are only paying 4% dividends. This doesn’t mean you can’t get bigger yields from index investing, however; it just means you have to look further afield. Today I’m going to show you a way to jump into index investing and get a 7.4% income stream at the same time.… Read more

Closed-end funds are absolutely crushing the S&P 500.

So far in 2017, the SPDR S&P 500 ETF (SPY) is up 7.8%, including dividends. That’s impressive considering the geopolitical calamities, unpredictable moves from the White House, economic uncertainty and rising interest rates the market is facing.

But what’s even more impressive is that over 200 closed-end funds (CEFs) are up even more than that.

Let’s take a look at our new CEF Insider research service’s proprietary Total CEF Index.

Of the 500 funds it covers, almost half (229) are beating the S&P 500 so far in 2017. And it’s hard to nail down a common thread that ties them all together.… Read more

Energy is one sector where the experts just can’t seem to get it right.

That’s a trend my colleague Brett Owens has been watching for a long time. In a March article, he warned that too many investors were bullish on oil, and the hedge fund “experts” betting on an imminent price breakthrough were wrong.

Since then, oil prices, oil stocks and energy funds have fallen sharply, leading energy to post year-to-date losses while every other asset class is up:

Energy Takes a Dive

It doesn’t matter how you played energy; the Alerian MLP ETF (AMLP) was the best performer, but even that was negative, while the more oil-exposed Energy Select Sector SPDR ETF (XLE) and Vanguard Energy ETF (VDE) were down about 9%, on average.… Read more