We love CEFs for a simple reason: Their big dividends are the best route to financial independence.

I say that from experience: Years ago, CEFs’ high income streams allowed me to leave a full-time job I disliked, travel, and live wherever I wished to. Later on, I launched my CEF Insider service to help other investors unlock these funds’ vast income potential.

Today we’re going to look at a top pick from the service’s portfolio to see how it delivers its outsized income stream (a 10.5% yield as I write this). Then we’re going to stack it up against another CEF you might think is a strong buy, but unfortunately this fund’s size and celebrity manager mask some significant flaws.… Read more

Stocks are sky-high, but us contrarians are looking for dividend deals. And we found them in one forgotten corner of the Wall Street world. Here, we’re going to bank yields between 11% and 13%.

That’s right—up to 13%, for as little as 68 cents on the dollar.

What does that mean? Well, these funds are trading at discounts as large as 32% off their book values.

Where are we looking? We’re talking about business development companies, or BDCs. These are publicly traded firms that lend to mostly privately held companies—small and medium-sized businesses.

The BDC business itself can be a bit of a cardiac kid.… Read more

Last week’s selloff in AI stocks was painful for the mainstream crowd—and an opportunity for us contrarian income investors.

AI darling NVIDIA (NVDA) dropped 8.5% on the week. Others took bigger hits: Micron Technology (MU), for example, fell 16.6%.

The result? A chance for us to pick up our favorite AI-focused dividend funds on the dip—starting with one suddenly cheap “all-in-one” play from the portfolio of my CEF Insider service.

That would be the Columbia Seligman Premium Technology Growth Fund (STK), which holds key AI providers like Microsoft (MSFT), NVIDIA and Alphabet (GOOGL), as well as AI-infrastructure plays like Lam Research (LRCX) and Bloom Energy (BE).… Read more

Remember Bill Gross? The financial media still quotes him here and there. Otherwise, he’s kicking around on X, tweeting a bit, looking (and flailing) to stay relevant.

A far cry from his previous life! Bill Gross was the man who built PIMCO into the biggest bond shop on planet Earth. He’s kind of a quirky guy—hung out near the beach in Southern California, practiced yoga in his office. A little prickly to work with, but definitely a great mind in the fixed-income space. He built PIMCO by himself, and he got all the best bond deals.

But as the years went by and the company grew, Bill started to weigh on the people he worked with.… Read more

If this manic market is making you queasy, I get it. So let’s talk about the perfect dividend payers for this volatility.

Those would be two funds throwing off 8%+ payouts we can collect in peace. And because both are cheap (for now), they have a higher “floor” on pullbacks than the S&P 500 does.

They’re both covered-call funds, and they’re built for market “tantrums” because:

• They offer 8%+ dividends that get us through a pullback without having to sell shares to get the cash we need.
• They hold well-known stocks: These funds hold familiar big caps with a twist: They “overlay” a portion of their portfolios with an option strategy that does best when uncertainty is high (more on that below).

The stunning thing about this year’s stock-market rally is that much of it has come in just the last couple of months.

That’s especially the case in tech: The NASDAQ has returned 33% just since March 30, as of this writing. The tech benchmark Vanguard Information Technology Index Fund (VGT) has done even better, spiking 48%.

That surge has, naturally, raised some concern. After all, isn’t the job market slowing? And aren’t inflation and interest rates staying relatively high?

Those worries are valid, of course, but the fact is that over time, stocks tend to track back to corporate earnings and sales growth, and both are surging.… Read more

Small-cap stocks are the cardiac kids of the market. They can bring high risk, and with that high risk can come high reward. For the first half of the 2020s, the reward hasn’t been there—but that’s beginning to change this year. And today, we’re going to discuss five small caps paying between 6.5% and 15.3% in dividends.

Small caps have lagged over the last 10-year period. Large caps outperformed them handily from 2016 to 2020, and then again from 2020 to 2025. But you can see in the chart below that we now have a turn—small caps have outperformed large caps year-to-date by a margin of 16% to 11%.… Read more

One of the best things about high-yielding closed-end funds (CEFs) is that they can post big gains and be strong bargains at the same time.

That’s a tougher circle to square with stocks: It’s hard to argue, for example, that NVIDIA (NVDA) and Apple (AAPL) are “cheap” now, given the strong runs they’ve been on.

But a single CEF can (and regularly does) offer both growth and value. In fact, it’s something we love to see, because it shows a fund is already rising, thanks to the momentum of its underlying portfolio (referred to as its “net asset value,” or NAV, in CEF-speak).… Read more

“Dad?”

The question came from two seats to my left. I leaned over and looked into my oldest daughter’s inquisitive eyes.

“Bolte is better than Judge?”

She asked it with a look of pure disbelief. A kid who’d just made a discovery but couldn’t believe her conclusion.

Last Friday night, my daughter had spent the first couple of innings parsing the center-field scoreboard, which lists each team’s batting averages. Henry Bolte, the Athletics’ 22-year-old rookie, had just pushed his average over .300. The shiny number jumped off the big screen at her, especially after I’d mentioned an inning earlier that hitting .300 is good.… Read more

Inflation forever?

The fear has taken root seemingly everywhere: the media, the bond market, the futures market. They’ve all bought into the idea that scorching price hikes (and high interest rates) are here to stay.

If you’re like me, my fellow contrarian, you’re paying attention—but you also know something else about times like these: When everyone expects something to happen, something else usually does.

That’s what I want to talk to you about today. Because all the data I’m watching tells me the crowd is wrong: It’s deflation, not inflation they should be focused on.

Falling rates, not rising rates.… Read more