Author Archive: Michael Foster

Stop me if you’ve heard this one before: “There’s a recession every seven years.”

It’s the kind of financial folk wisdom that sounds right but is, in fact, all wrong. But that doesn’t stop influential people from touting it as truth.

Morgan Stanley, for example, was warning investors that the seven-year cycle was a serious risk back in 2015. And they were wrong.

The world’s GDP rose 3.2% in 2015 and 3.1% in 2016, according to the International Monetary Fund. The US didn’t do too badly, either, growing 2.6% and 1.6% in those years. So far, 2% looks like an easy target for 2017.… Read more

Something strange happened recently, and it’s set up a terrific—and almost totally overlooked—profit opportunity for you.

What is it?

The European Union is going to ensure that people who held bonds in two recently failed banks (Veneto Banca and Popolare di Vicenza) will get a 100% bailout.

Now unless you’re holding these specific bonds, you’re probably wondering what this could possibly have to do with you.

Stick with me—I’ll get to that in a second. First, back to the bailout.

The EU’s move isn’t actually all that surprising. We’ve seen governments bail out bondholders many times since 2007 (and the EU has been doing even more bond bailouts in the last couple years).… Read more

At the start of June, I warned investors to avoid a certain fund like the plague.

It’s down almost 10% since then.

Of course, anyone long the fund was turning a blind eye to the very real dangers lurking behind it. Today I want to talk about the mistake they made and how we can avoid repeating this blunder in the future.

First, let me tell you what fund I’m talking about. It’s run by one of the greatest investment companies in the world, with one of the best track records out there; in fact, it’s one of the few companies that has consistently beaten the market for over a decade across most of its investments.… Read more

Everyone’s obsessing over FAAMG stocks, and for good reason. Facebook (FB), Apple (AAPL), Amazon (AMZN), Microsoft (MSFT) and Google, now known as Alphabet (GOOG), are on a tear for 2017, rising nearly 30%, on average.

And today I’m going to show you two funds that invest in these companies while offering higher dividends than any of these stocks pay individually.

Of course, everyone has heard of Facebook, Apple and Google. (And in case you missed it, my colleague Brett Owens revealed five individual tech stocks he likes now on June 19.)

But hardly anyone has heard of either of these high-yielding tech funds.… Read more

Today I’m going to show you why some funds are killing the S&P 500—and how you can dramatically boost your odds of doing exactly the same thing.

One way not to do it is by investing in a dying asset class: traditional mutual funds. Since most mutual funds have underperformed the market, the number of funds out there has flat-lined, while the number of exchange-traded funds (ETFs), mutual funds’ low-cost cousins, keeps exploding. There are now about 2,000 ETFs on US exchanges, and they account for about a third of all US trading.

But as I wrote on February 21 (and have said many times since), I don’t recommend you join the ever-growing crowd of ETF fans, either.… Read more

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