The suits on Wall Street will say that $460K isn’t enough to retire on.

Well, that “modest” nest egg will earn $64,860 in dividends alone when invested in this simple 7-CEF portfolio.

CEFs are the code name for closed-end funds. They are a lesser-known cousin to exchange-traded funds (ETFs) and mutual funds. CEFs tend to have modest assets under management. Which is their superpower. Fewer assets mean greater yields!

Consider the 7-CEF portfolio we are about to discuss versus the standard high-yield stock benchmark ETF:

There is no comparison! But before we buy blindly, let’s do our homework and make sure these CEFs are not paper payout tigers.… Read more

As I write this, the S&P 500 is sitting on a 28% total return for 2024. And of course, that could shoot even higher if we get the traditional Santa Claus rally.

Obviously, that’s been great for the equity funds we hold in CEF Insider, which give us price gains from their stock holdings, of course—but they also give us a huge slice of our gains in cash, thanks to their outsized yields.

But at times like this, we do need to take a step back and consider what’s going on behind a historic gain like this. While corporate earnings are rising, they’re doing so more slowly than stock prices, which is why the S&P 500’s price-to-earnings (P/E) ratio is 28, as of this writing, nearly double its long-term average of 16.1.… Read more

I’d like to share my simple “Made for 2025” Dividend Plan with you. It’s a simple, safe strategy that identifies dividend stocks with payouts set to surge higher.

As these divvies pop, so do their associated stock prices.

The truth is, this proven system works no matter what the economy, or the Fed (or even the executive branch of the federal government!) is doing. It’s the path to peppy price gains from protected payers.

Let’s talk about a timely example—a dividend dip to enjoy! On the campaign trail, President-Elect Trump presented us with a pullback in perennial dividend grower Deere & Co (DE) thanks to these comments:

“They’ve announced a few days ago that they are going to move a lot of their manufacturing business to Mexico.

At times like these, I’m reminded of a quote from Howard Marks, the most successful value investor you’ve likely never heard of. (Warren Buffett is a fan.)

Marks’s monthly “Oaktree Memos” are well worth a read. And in his insightful book, The Most Important Thing: Uncommon Sense for the Thoughtful Investor, he wrote:

“What’s clear to the broad consensus of investors is almost always wrong.”

This quote has been on my mind lately because everyone is convinced that Trump 2.0 will lead to higher inflation.

I’m sure you can see where I’m going: Higher inflation begets higher interest rates.… Read more

It looks like 2024 will end with a big gain for investors in US stocks, with the S&P 500 up 28% year-to-date, even better than my (admittedly optimistic) expectations: I saw a roughly 15% gain for the S&P 500 going into the year.

If this gain holds, 2024 will go down as one of the best years in the last 20, with only 2013 and 2019 doing (just slightly) better.

However, unlike those years, the momentum isn’t coming mainly from tech, with the benchmark Technology Select Sector SPDR ETF (XLK) actually trailing the market, with a 24.5% return year-to-date, as of this writing.… Read more

Trump 2.0 will feature Wall Street-approved suit Scott Bessent as Treasury secretary. Bessent will advocate for financial deregulation and increased lending. Easier and faster money. Which will be a boon for private equity (PE) firms and business development companies (BDCs).

Today we’ll discuss seven BDCs yielding between 11.1% and 14.2%. They operate like PE shops—both will benefit from a friendly deal-making environment.

For our income investing purposes, we pick BDCs because it is easier to buy them.

We can buy BDCs individually as we would any stock. And BDCs can avoid taxes at the federal level by paying out at least 90% of their taxable earnings to shareholders in the form of dividends.… Read more

We income investors don’t talk about international stocks nearly enough. That’s too bad, because there are ways we can use them to build a massive income stream and make our investments safer, too.

In fact, there’s one way, using high-yield closed-end funds (CEFs), we can “time” US and international stocks to get a 9.2% yield we can build over time by making simple moves to “rebalance” between US and overseas CEFs from time to time.

It all starts with China, because there’s a spark there that sets the stage for our 9.2%+ overseas payout strategy.

Chinese Stocks: 13% Yearly Gains Ahead?… Read more

Are higher interest rates and lower bond prices a sure thing for 2025? Mainstream financial pundits say yes.

Which gives us thoughtful contrarians pause. Their narrative against bonds is assumed. When this happens, markets tend to move in the opposite direction of conventional wisdom.

Which means we should bet with bonds. At least in the near term to start the new year. Let’s watch bonds rally and surprise everyone except for us. The “Trump is bad for bonds” trade may eventually be correct, but my hunch again is that this “surefire” call is early.

For all the recent commotion, the 10-year Treasury yield bounces between 3.3% and 5%, with an even narrower 3.6% to 4.7% range recently.… Read more

We’re now well on our way to Trump 2.0, and I’m getting a lot of questions from readers about where things head from here.

I see the new administration as overall bullish for stocks. But the truth is, fortunes will be made in the next four years and, sadly, retirements will be lost.

My job is to keep you on the right side of the financial markets. One thing I can say is that the next four years will be challenging for two kinds of investors:

1. Buy-and-hold (or as I like to call them, “buy-and-hope”) types, and …
2. Those who sit in index funds like the SPDR S&P 500 ETF Trust (SPY).

This has been a great year for stocks—and a great year for our 8%+ yielding closed-end funds (CEFs), too.

That makes sense: Many CEFs invest in stocks, and many more hold bonds issued by publicly traded firms, so what’s good for stocks tends to be good for CEFs.

CEFs March Higher in ’24

Source: CEF Insider

When we look at the proprietary indexes we use to track CEFs at my CEF Insider service, we see that the equity sub-index has done the best, with a 21% year-to-date total return. Corporate bonds are second at 14.3%. Municipal bonds, known for lower volatility and risk, have gained a bit less, as you’d expect, at 6.6%.… Read more