Closed-end funds (CEFs) really are the “Swiss army knife” of investments: with one click, they let us grab big income (the average CEF yields 7.9%), diversify (within and beyond asset classes) and buy their holdings for cheap!

But let’s be honest, when it comes to CEFs, it’s all about the dividends.

On that front, there’s a lot to say. For one, many CEFs pay monthly, making managing our income easy: CEFs’ high yields mean we could potentially replace a $6,500 monthly paycheck with less than $1 million invested and live on dividends alone.

And check out these discount and dividend stats from across the CEF space:

• A third of all CEFs yield over 10%.

It’s September, and stocks are shaky. We’re right on schedule.

The weeks ahead on the calendar have provided us calculated contrarians with some of our best dividend buys in recent years. In fact, two out of the last three years, we took advantage of seasonally weak Septembers to buy low.

In October 2020, with the world reportedly about to end, we locked in yields up to 10.8%. A sharp pullback presented us with values, while an accommodative Federal Reserve provided follow-up fuel. Price gains followed.

And last year, in November 2022, we bought bonds. It wasn’t a popular pick—everyone hated them!… Read more

Let’s dive into this Johnson & Johnson (JNJ) spinoff—because it shows exactly how we can tap “splits” like these to grab not one but TWO income streams growing 200%+.

Because if there’s one thing we need to know about spinoffs, it’s this: they’re about the closest thing to a free lunch you’ll find in investing. Just ask Peter Lynch, who guided his Magellan Fund to an astounding 29.2% annualized return from 1977 to 1990. His take on spinoffs, in his 1989 investing masterclass One Up on Wall Street, was simple:

“Spinoffs of divisions or parts of companies into separate, freestanding entities … often result in astoundingly lucrative investments.”… Read more

In my CEF Insider service, we focus exclusively on buying strong, 8%+ yielding closed-end funds (CEFs). It’s our MO! And there are a lot of CEF bargains now, as cautious income investors remain skittish following the 2022 correction.

But today I want to talk about when it’s time to sell a CEF. You might recall the old Warren Buffett quote that his favorite holding period is “forever.” Of course, Buffett was talking about blue-chip stocks, which are his forte.

With CEFs, our play is a bit different. Sure, we want to hold these high yielders (the average CEF tracked by CEF Insider yields 7.9% today) for as long as we can, to make the most of their high—and often monthly—dividends.… Read more

Vanilla investors buy stocks that Wall Street approves of.

Why?

If a stock is showered with Buy ratings, then who is left to bid the price even higher? Nobody!

This lame “strategy” feels good but ends up with latecomers top ticking the market. Which is why we contrarians aim differently—for the bottom of the barrel.

Give us stocks with Sell ratings. Which often means there’s nobody left to sell!

Today we’ll discuss a pack of discarded dividend stocks paying up to 12.6%. Not only are these yields real, and spectacular, they have price upside potential to boot.

After all, a stock slathered with Sell labels has nothing but upgrades in its future.… Read more

If there’s one thing that stands out about the market for our favorite high-yield investments—closed-end funds (CEFs)—in 2023, it’s this: individual investors are still too skittish to jump in.

That’s our chance, because this “lag” means CEFs’ prices haven’t taken off, and these funds are throwing off dividend yields in the same neighborhood they were at the start of 2022—around 7.5%, on average, today. And by being just a little picky (as we will be with the fund talk about a bit further on), we can amp those payouts up to 10%+.

Combine that with the discounts to net asset value (NAV, or the value of CEFs’ portfolios) available across the space, and we’ve got a shot at real upside, especially when you consider how far behind the S&P 500 that CEFs have lagged this year.… Read more

Years ago, we had a 15-month fling with a promising fund. It traded at a generous discount to its net asset value (NAV) and paid a double-digit dividend.

Plus, its price was rallying!

Brookfield Real Assets Income Fund (RA) checked all the boxes. Unfortunately, it failed the all-important “cash-flow smell test.”

RA’s NAV was declining. Not a good sign given the nebulous nature of its holdings.

The “realness” of RA ends with its name. More than half the portfolio is  securitized real estate credit.

And actual infrastructure? The “real assets” headline buyers think they are investing in? Just 30%!… Read more

Dividend deals are lining up for us across the board—and they’re likely to get better as September unfolds. It’s time to make our shopping lists!

We’ll start with three unloved corners of the market sporting the very best bargains. Then we’ll dive into three specific names and tickers.

• “Growth utilities,” which are primed for upside as rates top out and roll over, cutting their borrowing costs—and “rate competition” from Treasuries and other fixed-income plays.
• Cell-Tower Landlords, which run one of the most recession-resistant businesses out there.
• Industrial real estate investment trusts (REITs), which can’t build and buy warehouses and factories fast enough to meet surging demand.

Last Monday, we talked about the two biggest mistakes many investors make when buying high-yielding closed-end funds (CEFs). Today we’re taking the opposite tack and delving into three things to look for to pick the very best of these 7.5%+ payers for your portfolio.

The upshot? If all three of these strengths are present, you likely have yourself a winner. But first things first—let’s talk a bit about what sets CEFs apart. These funds are different from ETFs and mutual funds in two key ways.

1. CEFs have fixed share counts and generally can’t issue new shares to new investors (hence the “closed” in the name).

Worried about a pullback? I don’t blame you.

Today we’ll discuss five of the steadiest dividend stocks on the planet. And let’s not confuse stability with penny pinching—these cash cows yield up to 11%!

How do we capture payouts without wild price swings? Two words: low beta.

Beta measures how much (or how little) a stock or fund moves compared to a benchmark—usually the S&P 500, but it depends. The benchmark is set at 1. Lower than 1 means an investment moves less; higher than 1 means it moves more.

Thus, beta is a de facto measure of an investment’s volatility.… Read more